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 - – customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies,
increasing energy prices, increasing household debt because of falling income levels, 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 -
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.
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.
High brand equity
– Morphosys Proprietary has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Morphosys Proprietary to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Morphosys Proprietary has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Morphosys Proprietary 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.
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.
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.
Effective Research and Development (R&D)
– Morphosys Proprietary 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 MorphoSys AG: The Evolution of a Biotechnology Business Model - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Morphosys Proprietary digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Morphosys Proprietary has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
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.
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.
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.
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.
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 dependence on star products
– The top 2 products and services of the firm as mentioned in the MorphoSys AG: The Evolution of a Biotechnology Business Model 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 Morphosys Proprietary has relatively successful track record of launching new products.
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.
Slow to strategic competitive environment developments
– As MorphoSys AG: The Evolution of a Biotechnology Business Model HBR case study mentions - Morphosys Proprietary takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
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.
Interest costs
– Compare to the competition, Morphosys Proprietary 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.
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.
Increasing silos among functional specialists
– The organizational structure of Morphosys Proprietary is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Morphosys Proprietary needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Morphosys Proprietary to focus more on services rather than just following the product oriented approach.
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.
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.
Lack of clear differentiation of Morphosys Proprietary products
– To increase the profitability and margins on the products, Morphosys Proprietary needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Morphosys Proprietary is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study MorphoSys AG: The Evolution of a Biotechnology Business Model can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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 -
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.
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Morphosys Proprietary 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.
Buying journey improvements
– Morphosys Proprietary can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. MorphoSys AG: The Evolution of a Biotechnology Business Model suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
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.
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.
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. Morphosys Proprietary can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Morphosys Proprietary can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Morphosys Proprietary can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
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.
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.
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.
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 -
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.
Regulatory challenges
– Morphosys Proprietary 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.
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.
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 .
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.
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.
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.
Stagnating economy with rate increase
– Morphosys Proprietary 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.
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.
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. Morphosys Proprietary 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.
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.
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.
Increasing wage structure of Morphosys Proprietary
– 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 Morphosys Proprietary.
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.