Swot Analysis of "Eli Lilly and Co.: Drug Development Strategy (B)" written by Stefan Thomke, Ashok Nimgade includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Eli Lilly facing as an external strategic factors. Some of the topics covered in Eli Lilly and Co.: Drug Development Strategy (B) case study are - Strategic Management Strategies, Operations management, Product development, Technology and Technology & Operations.
Some of the macro environment factors that can be used to understand the Eli Lilly and Co.: Drug Development Strategy (B) casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation,
supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Eli Lilly and Co.: Drug Development Strategy (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Eli Lilly and Co.: Drug Development Strategy (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Eli Lilly, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Eli Lilly operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Eli Lilly and Co.: Drug Development Strategy (B) can be done for the following purposes –
1. Strategic planning using facts provided in Eli Lilly and Co.: Drug Development Strategy (B) case study
2. Improving business portfolio management of Eli Lilly
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Eli Lilly
Strengths Eli Lilly and Co.: Drug Development Strategy (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Eli Lilly in Eli Lilly and Co.: Drug Development Strategy (B) Harvard Business Review case study are -
Sustainable margins compare to other players in Technology & Operations industry
– Eli Lilly and Co.: Drug Development Strategy (B) firm has clearly differentiated products in the market place. This has enabled Eli Lilly to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Eli Lilly to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Eli Lilly is present in almost all the verticals within the industry. This has provided firm in Eli Lilly and Co.: Drug Development Strategy (B) case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Highly skilled collaborators
– Eli Lilly has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Eli Lilly and Co.: Drug Development Strategy (B) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Eli Lilly has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Eli Lilly and Co.: Drug Development Strategy (B) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Organizational Resilience of Eli Lilly
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Eli Lilly does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Eli Lilly has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Eli Lilly and Co.: Drug Development Strategy (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy in the Eli Lilly and Co.: Drug Development Strategy (B) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Ability to lead change in Technology & Operations field
– Eli Lilly is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Eli Lilly in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Eli Lilly has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Eli Lilly has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Low bargaining power of suppliers
– Suppliers of Eli Lilly in the sector have low bargaining power. Eli Lilly and Co.: Drug Development Strategy (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Eli Lilly to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Eli Lilly is one of the most innovative firm in sector. Manager in Eli Lilly and Co.: Drug Development Strategy (B) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Eli Lilly are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Weaknesses Eli Lilly and Co.: Drug Development Strategy (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Eli Lilly and Co.: Drug Development Strategy (B) are -
Need for greater diversity
– Eli Lilly has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Workers concerns about automation
– As automation is fast increasing in the segment, Eli Lilly needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
No frontier risks strategy
– After analyzing the HBR case study Eli Lilly and Co.: Drug Development Strategy (B), it seems that company is thinking about the frontier risks that can impact Technology & Operations strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Products dominated business model
– Even though Eli Lilly has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Eli Lilly and Co.: Drug Development Strategy (B) should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Eli Lilly is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Eli Lilly and Co.: Drug Development Strategy (B) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Eli Lilly products
– To increase the profitability and margins on the products, Eli Lilly needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Eli Lilly has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Eli Lilly and Co.: Drug Development Strategy (B) HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Eli Lilly has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Eli Lilly has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Eli Lilly and Co.: Drug Development Strategy (B), is just above the industry average. Eli Lilly needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Eli Lilly and Co.: Drug Development Strategy (B), it seems that the employees of Eli Lilly don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Opportunities Eli Lilly and Co.: Drug Development Strategy (B) | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Eli Lilly and Co.: Drug Development Strategy (B) are -
Creating value in data economy
– The success of analytics program of Eli Lilly has opened avenues for new revenue streams for the organization in the industry. This can help Eli Lilly to build a more holistic ecosystem as suggested in the Eli Lilly and Co.: Drug Development Strategy (B) case study. Eli Lilly can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Eli Lilly can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Eli Lilly has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Eli Lilly can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Eli Lilly and Co.: Drug Development Strategy (B), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Eli Lilly to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Eli Lilly is facing challenges because of the dominance of functional experts in the organization. Eli Lilly and Co.: Drug Development Strategy (B) case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Building a culture of innovation
– managers at Eli Lilly can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Technology & Operations segment.
Better consumer reach
– The expansion of the 5G network will help Eli Lilly to increase its market reach. Eli Lilly will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Eli Lilly can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Eli Lilly has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Eli Lilly and Co.: Drug Development Strategy (B) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Eli Lilly to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Eli Lilly in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Eli Lilly can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Eli Lilly to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Eli Lilly to hire the very best people irrespective of their geographical location.
Threats Eli Lilly and Co.: Drug Development Strategy (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Eli Lilly and Co.: Drug Development Strategy (B) are -
Stagnating economy with rate increase
– Eli Lilly can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Eli Lilly in the Technology & Operations sector and impact the bottomline of the organization.
Increasing wage structure of Eli Lilly
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Eli Lilly.
High dependence on third party suppliers
– Eli Lilly high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Technology acceleration in Forth Industrial Revolution
– Eli Lilly has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Eli Lilly needs to keep up with the evolution of technology in the Technology & Operations sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Eli Lilly will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Eli Lilly with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Eli Lilly needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Technology & Operations industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Eli Lilly can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Eli Lilly and Co.: Drug Development Strategy (B) .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Eli Lilly in the Technology & Operations industry. The Technology & Operations industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Eli Lilly and Co.: Drug Development Strategy (B), Eli Lilly may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Eli Lilly business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Eli Lilly and Co.: Drug Development Strategy (B) Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Eli Lilly and Co.: Drug Development Strategy (B) needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Eli Lilly and Co.: Drug Development Strategy (B) is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Eli Lilly and Co.: Drug Development Strategy (B) is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Eli Lilly and Co.: Drug Development Strategy (B) is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Eli Lilly needs to make to build a sustainable competitive advantage.
