3M Canada: The Health Care Supply Chain SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of 3M Canada: The Health Care Supply Chain
A global science and technology company's Canadian national manager of channel markets is evaluating a potential change to the company's distribution strategy for its innovative health care products to hospitals. The company currently relies on value-added resellers to distribute its products to Canadian hospitals. Recently, however, customers have been pressuring the company to ship products directly to hospitals, expecting that major cost savings could be achieved through a "direct distribution" model. The channel markets manager needs to assess the quantitative and qualitative issues related to direct distribution versus maintaining its current supply chain structure.
Swot Analysis of "3M Canada: The Health Care Supply Chain" written by P. Fraser Johnson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hospitals Distribution facing as an external strategic factors. Some of the topics covered in 3M Canada: The Health Care Supply Chain case study are - Strategic Management Strategies, Supply chain and Technology & Operations.
Some of the macro environment factors that can be used to understand the 3M Canada: The Health Care Supply Chain casestudy better are - – increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, increasing energy prices,
increasing commodity prices, technology disruption, etc
Introduction to SWOT Analysis of 3M Canada: The Health Care Supply Chain
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in 3M Canada: The Health Care Supply Chain case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hospitals Distribution, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hospitals Distribution 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 3M Canada: The Health Care Supply Chain can be done for the following purposes –
1. Strategic planning using facts provided in 3M Canada: The Health Care Supply Chain case study
2. Improving business portfolio management of Hospitals Distribution
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 Hospitals Distribution
Strengths 3M Canada: The Health Care Supply Chain | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hospitals Distribution in 3M Canada: The Health Care Supply Chain Harvard Business Review case study are -
Highly skilled collaborators
– Hospitals Distribution 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 3M Canada: The Health Care Supply Chain HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Hospitals Distribution 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 3M Canada: The Health Care Supply Chain - 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 3M Canada: The Health Care Supply Chain 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.
Training and development
– Hospitals Distribution has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in 3M Canada: The Health Care Supply Chain 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.
Superior customer experience
– The customer experience strategy of Hospitals Distribution in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Hospitals Distribution has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hospitals Distribution 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.
Analytics focus
– Hospitals Distribution 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 P. Fraser Johnson 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.
High switching costs
– The high switching costs that Hospitals Distribution 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.
Learning organization
- Hospitals Distribution 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 Hospitals Distribution is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in 3M Canada: The Health Care Supply Chain Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Hospitals Distribution is present in almost all the verticals within the industry. This has provided firm in 3M Canada: The Health Care Supply Chain 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.
Innovation driven organization
– Hospitals Distribution is one of the most innovative firm in sector. Manager in 3M Canada: The Health Care Supply Chain Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Hospitals Distribution in the sector have low bargaining power. 3M Canada: The Health Care Supply Chain has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hospitals Distribution to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses 3M Canada: The Health Care Supply Chain | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of 3M Canada: The Health Care Supply Chain are -
Skills based hiring
– The stress on hiring functional specialists at Hospitals Distribution 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.
Increasing silos among functional specialists
– The organizational structure of Hospitals Distribution is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Hospitals Distribution needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hospitals Distribution to focus more on services rather than just following the product oriented approach.
Products dominated business model
– Even though Hospitals Distribution 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 - 3M Canada: The Health Care Supply Chain should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As 3M Canada: The Health Care Supply Chain HBR case study mentions - Hospitals Distribution 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study 3M Canada: The Health Care Supply Chain, in the dynamic environment Hospitals Distribution has struggled to respond to the nimble upstart competition. Hospitals Distribution has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Hospitals Distribution is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study 3M Canada: The Health Care Supply Chain can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study 3M Canada: The Health Care Supply Chain, is just above the industry average. Hospitals Distribution 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 3M Canada: The Health Care Supply Chain, it seems that the employees of Hospitals Distribution 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the 3M Canada: The Health Care Supply Chain 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 Hospitals Distribution has relatively successful track record of launching new products.
No frontier risks strategy
– After analyzing the HBR case study 3M Canada: The Health Care Supply Chain, 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.
Lack of clear differentiation of Hospitals Distribution products
– To increase the profitability and margins on the products, Hospitals Distribution needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities 3M Canada: The Health Care Supply Chain | 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 3M Canada: The Health Care Supply Chain are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hospitals Distribution 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.
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. Hospitals Distribution 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. Hospitals Distribution 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hospitals Distribution can use these opportunities to build new business models that can help the communities that Hospitals Distribution operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Hospitals Distribution in the consumer business. Now Hospitals Distribution can target international markets with far fewer capital restrictions requirements than the existing system.
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 Hospitals Distribution 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.
Developing new processes and practices
– Hospitals Distribution 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.
Creating value in data economy
– The success of analytics program of Hospitals Distribution has opened avenues for new revenue streams for the organization in the industry. This can help Hospitals Distribution to build a more holistic ecosystem as suggested in the 3M Canada: The Health Care Supply Chain case study. Hospitals Distribution can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Hospitals Distribution to increase its market reach. Hospitals Distribution 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hospitals Distribution 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 Hospitals Distribution to hire the very best people irrespective of their geographical location.
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. Hospitals Distribution can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Hospitals Distribution to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Buying journey improvements
– Hospitals Distribution can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. 3M Canada: The Health Care Supply Chain 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hospitals Distribution can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats 3M Canada: The Health Care Supply Chain External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study 3M Canada: The Health Care Supply Chain are -
Technology acceleration in Forth Industrial Revolution
– Hospitals Distribution has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Hospitals Distribution 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hospitals Distribution 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 3M Canada: The Health Care Supply Chain .
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. Hospitals Distribution can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Hospitals Distribution with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Hospitals Distribution 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.
Consumer confidence and its impact on Hospitals Distribution 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 Hospitals Distribution
– 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 Hospitals Distribution.
Shortening product life cycle
– it is one of the major threat that Hospitals Distribution is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Hospitals Distribution 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.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
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. Hospitals Distribution 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study 3M Canada: The Health Care Supply Chain, Hospitals Distribution 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 .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hospitals Distribution 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.
Weighted SWOT Analysis of 3M Canada: The Health Care Supply Chain 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 3M Canada: The Health Care Supply Chain 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 3M Canada: The Health Care Supply Chain 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 3M Canada: The Health Care Supply Chain 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 3M Canada: The Health Care Supply Chain 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 Hospitals Distribution needs to make to build a sustainable competitive advantage.
