MorphoSys AG: The Evolution of a Biotechnology Business Model SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of MorphoSys AG: The Evolution of a Biotechnology Business Model
In the biotech world, the 18-year-old Munich-based company MorphoSys was a rarity: it was profitable. The company achieved this profitability not by developing and selling its own drugs, but by licensing access to its proprietary library of human antibodies. Recently, the company decided to deviate from this model, and attempt to develop its own proprietary products. The case allows analysis of "license vs. vertically integrate" business model decisions, and can be used to teach principles of business model design and the functioning of markets for know-how.
Authors :: Gary P. Pisano, Ryan Johnson, Carin-Isabel Knoop
Swot Analysis of "MorphoSys AG: The Evolution of a Biotechnology Business Model" written by Gary P. Pisano, Ryan Johnson, Carin-Isabel Knoop includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Morphosys Proprietary facing as an external strategic factors. Some of the topics covered in MorphoSys AG: The Evolution of a Biotechnology Business Model case study are - Strategic Management Strategies, Joint ventures, Research & development, Risk management, Strategic planning, Strategy execution and Technology & Operations.
Some of the macro environment factors that can be used to understand the MorphoSys AG: The Evolution of a Biotechnology Business Model casestudy better are - – geopolitical disruptions, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies,
increasing energy prices, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of MorphoSys AG: The Evolution of a Biotechnology Business Model
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in MorphoSys AG: The Evolution of a Biotechnology Business Model case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Morphosys Proprietary, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Morphosys Proprietary 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 MorphoSys AG: The Evolution of a Biotechnology Business Model can be done for the following purposes –
1. Strategic planning using facts provided in MorphoSys AG: The Evolution of a Biotechnology Business Model case study
2. Improving business portfolio management of Morphosys Proprietary
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 Morphosys Proprietary
Strengths MorphoSys AG: The Evolution of a Biotechnology Business Model | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Morphosys Proprietary in MorphoSys AG: The Evolution of a Biotechnology Business Model Harvard Business Review case study are -
Diverse revenue streams
– Morphosys Proprietary is present in almost all the verticals within the industry. This has provided firm in MorphoSys AG: The Evolution of a Biotechnology Business Model 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.
Learning organization
- Morphosys Proprietary is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Morphosys Proprietary is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in MorphoSys AG: The Evolution of a Biotechnology Business Model Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Morphosys Proprietary 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 MorphoSys AG: The Evolution of a Biotechnology Business Model HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Technology & Operations field
– Morphosys Proprietary 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 Morphosys Proprietary in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Morphosys Proprietary
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Morphosys Proprietary does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Morphosys Proprietary has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Sustainable margins compare to other players in Technology & Operations industry
– MorphoSys AG: The Evolution of a Biotechnology Business Model firm has clearly differentiated products in the market place. This has enabled Morphosys Proprietary to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Morphosys Proprietary to invest into research and development (R&D) and innovation.
Analytics focus
– Morphosys Proprietary is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Gary P. Pisano, Ryan Johnson, Carin-Isabel Knoop can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Ability to recruit top talent
– Morphosys Proprietary is one of the leading recruiters in the industry. Managers in the MorphoSys AG: The Evolution of a Biotechnology Business Model are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Morphosys Proprietary in the sector have low bargaining power. MorphoSys AG: The Evolution of a Biotechnology Business Model has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Morphosys Proprietary to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Morphosys Proprietary 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.
Innovation driven organization
– Morphosys Proprietary is one of the most innovative firm in sector. Manager in MorphoSys AG: The Evolution of a Biotechnology Business Model Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses MorphoSys AG: The Evolution of a Biotechnology Business Model | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of MorphoSys AG: The Evolution of a Biotechnology Business Model are -
High bargaining power of channel partners
– Because of the regulatory requirements, Gary P. Pisano, Ryan Johnson, Carin-Isabel Knoop suggests that, Morphosys Proprietary is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Low market penetration in new markets
– Outside its home market of Morphosys Proprietary, firm in the HBR case study MorphoSys AG: The Evolution of a Biotechnology Business Model needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, firm in the HBR case study MorphoSys AG: The Evolution of a Biotechnology Business Model has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Morphosys Proprietary 's lucrative customers.
High cash cycle compare to competitors
Morphosys Proprietary has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Skills based hiring
– The stress on hiring functional specialists at Morphosys Proprietary has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Morphosys Proprietary supply chain. Even after few cautionary changes mentioned in the HBR case study - MorphoSys AG: The Evolution of a Biotechnology Business Model, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Morphosys Proprietary vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Morphosys Proprietary 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study MorphoSys AG: The Evolution of a Biotechnology Business Model, it seems that the employees of Morphosys Proprietary 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Morphosys Proprietary 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study MorphoSys AG: The Evolution of a Biotechnology Business Model, is just above the industry average. Morphosys Proprietary 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study MorphoSys AG: The Evolution of a Biotechnology Business Model, in the dynamic environment Morphosys Proprietary has struggled to respond to the nimble upstart competition. Morphosys Proprietary has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities MorphoSys AG: The Evolution of a Biotechnology Business Model | 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 MorphoSys AG: The Evolution of a Biotechnology Business Model are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Morphosys Proprietary can use these opportunities to build new business models that can help the communities that Morphosys Proprietary operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Morphosys Proprietary can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Morphosys Proprietary can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Building a culture of innovation
– managers at Morphosys Proprietary 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.
Creating value in data economy
– The success of analytics program of Morphosys Proprietary has opened avenues for new revenue streams for the organization in the industry. This can help Morphosys Proprietary to build a more holistic ecosystem as suggested in the MorphoSys AG: The Evolution of a Biotechnology Business Model case study. Morphosys Proprietary can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Morphosys Proprietary 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 MorphoSys AG: The Evolution of a Biotechnology Business Model - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Morphosys Proprietary to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Morphosys Proprietary 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.
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. Morphosys Proprietary can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Morphosys Proprietary is facing challenges because of the dominance of functional experts in the organization. MorphoSys AG: The Evolution of a Biotechnology Business Model 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Morphosys Proprietary 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 Morphosys Proprietary to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Morphosys Proprietary 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, MorphoSys AG: The Evolution of a Biotechnology Business Model, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Morphosys Proprietary can develop new processes and procedures in Technology & Operations industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Loyalty marketing
– Morphosys Proprietary 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.
Threats MorphoSys AG: The Evolution of a Biotechnology Business Model External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study MorphoSys AG: The Evolution of a Biotechnology Business Model are -
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Morphosys Proprietary needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Morphosys Proprietary has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Morphosys Proprietary 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.
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 Morphosys Proprietary business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Morphosys Proprietary needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Morphosys Proprietary can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Morphosys Proprietary.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Morphosys Proprietary 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 MorphoSys AG: The Evolution of a Biotechnology Business Model .
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Morphosys Proprietary can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Morphosys Proprietary 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 MorphoSys AG: The Evolution of a Biotechnology Business Model, Morphosys Proprietary 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 .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Morphosys Proprietary with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Morphosys Proprietary in the Technology & Operations sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Morphosys Proprietary is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Morphosys Proprietary demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Weighted SWOT Analysis of MorphoSys AG: The Evolution of a Biotechnology Business Model 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 MorphoSys AG: The Evolution of a Biotechnology Business Model 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 MorphoSys AG: The Evolution of a Biotechnology Business Model 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 MorphoSys AG: The Evolution of a Biotechnology Business Model 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 MorphoSys AG: The Evolution of a Biotechnology Business Model 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 Morphosys Proprietary needs to make to build a sustainable competitive advantage.