Case Study Description of Precia Pharma: Promoting Ethical Sales Practices
Precia Pharma Private Limited was considered one of the fastest growing companies in the highly competitive Indian pharmaceutical industry. An email from the company's star performing executive in March 2017, highlighting sales pressures and unethical practices in the industry, forced the managing director to face the reality of how the ills plaguing the pharmaceutical sector might affect his company. He wondered what he must do to maintain the company's ethical code of conduct while striving for a healthy balance between ambitious targets and good selling practices. The case explores the strategies of the company for managing the different ethical issues in a pharmaceutical setting. Sandeep Puri is affiliated with Institute of Management Technology, Ghaziabad. Ajay Kohli is affiliated with Georgia Institute of Technology.
Swot Analysis of "Precia Pharma: Promoting Ethical Sales Practices" written by Sandeep Puri, Ajay K. Kohli includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Precia Ethical facing as an external strategic factors. Some of the topics covered in Precia Pharma: Promoting Ethical Sales Practices case study are - Strategic Management Strategies, and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Precia Pharma: Promoting Ethical Sales Practices casestudy better are - – talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Precia Pharma: Promoting Ethical Sales Practices
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Precia Pharma: Promoting Ethical Sales Practices case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Precia Ethical, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Precia Ethical 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 Precia Pharma: Promoting Ethical Sales Practices can be done for the following purposes –
1. Strategic planning using facts provided in Precia Pharma: Promoting Ethical Sales Practices case study
2. Improving business portfolio management of Precia Ethical
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Precia Ethical
Strengths Precia Pharma: Promoting Ethical Sales Practices | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Precia Ethical in Precia Pharma: Promoting Ethical Sales Practices Harvard Business Review case study are -
Sustainable margins compare to other players in Sales & Marketing industry
– Precia Pharma: Promoting Ethical Sales Practices firm has clearly differentiated products in the market place. This has enabled Precia Ethical to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Precia Ethical to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Precia Ethical in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Precia Ethical is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Precia Ethical digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Precia Ethical 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
– Precia Ethical is one of the leading recruiters in the industry. Managers in the Precia Pharma: Promoting Ethical Sales Practices are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– Precia Ethical 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 Sandeep Puri, Ajay K. Kohli 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.
Low bargaining power of suppliers
– Suppliers of Precia Ethical in the sector have low bargaining power. Precia Pharma: Promoting Ethical Sales Practices has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Precia Ethical to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Precia Ethical is one of the most innovative firm in sector. Manager in Precia Pharma: Promoting Ethical Sales Practices Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Precia Ethical 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.
Operational resilience
– The operational resilience strategy in the Precia Pharma: Promoting Ethical Sales Practices 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
– Precia Ethical has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Precia Pharma: Promoting Ethical Sales Practices 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.
Ability to lead change in Sales & Marketing field
– Precia Ethical 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 Precia Ethical in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Precia Pharma: Promoting Ethical Sales Practices | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Precia Pharma: Promoting Ethical Sales Practices are -
Capital Spending Reduction
– Even during the low interest decade, Precia Ethical 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 bargaining power of channel partners
– Because of the regulatory requirements, Sandeep Puri, Ajay K. Kohli suggests that, Precia Ethical 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.
Slow to strategic competitive environment developments
– As Precia Pharma: Promoting Ethical Sales Practices HBR case study mentions - Precia Ethical 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.
Aligning sales with marketing
– It come across in the case study Precia Pharma: Promoting Ethical Sales Practices that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Precia Pharma: Promoting Ethical Sales Practices can leverage the sales team experience to cultivate customer relationships as Precia Ethical is planning to shift buying processes online.
Products dominated business model
– Even though Precia Ethical 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 - Precia Pharma: Promoting Ethical Sales Practices should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Precia Ethical 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 Precia Pharma: Promoting Ethical Sales Practices, is just above the industry average. Precia Ethical 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.
High cash cycle compare to competitors
Precia Ethical 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Precia Ethical is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Precia Pharma: Promoting Ethical Sales Practices can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Precia Pharma: Promoting Ethical Sales Practices, it seems that the employees of Precia Ethical 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.
No frontier risks strategy
– After analyzing the HBR case study Precia Pharma: Promoting Ethical Sales Practices, it seems that company is thinking about the frontier risks that can impact Sales & Marketing 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.
Opportunities Precia Pharma: Promoting Ethical Sales Practices | 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 Precia Pharma: Promoting Ethical Sales Practices are -
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 Precia Ethical in the consumer business. Now Precia Ethical can target international markets with far fewer capital restrictions requirements than the existing system.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Precia Ethical 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. Precia Ethical 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Precia Ethical 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, Precia Pharma: Promoting Ethical Sales Practices, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Precia Ethical can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Precia Pharma: Promoting Ethical Sales Practices 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 Precia Ethical 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, Precia Ethical is facing challenges because of the dominance of functional experts in the organization. Precia Pharma: Promoting Ethical Sales Practices 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.
Manufacturing automation
– Precia Ethical can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Developing new processes and practices
– Precia Ethical can develop new processes and procedures in Sales & Marketing 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Precia Ethical in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Precia Ethical can use these opportunities to build new business models that can help the communities that Precia Ethical operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Using analytics as competitive advantage
– Precia Ethical 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 Precia Pharma: Promoting Ethical Sales Practices - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Precia Ethical to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Precia Ethical can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Precia Ethical has opened avenues for new revenue streams for the organization in the industry. This can help Precia Ethical to build a more holistic ecosystem as suggested in the Precia Pharma: Promoting Ethical Sales Practices case study. Precia Ethical can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Precia Pharma: Promoting Ethical Sales Practices External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Precia Pharma: Promoting Ethical Sales Practices are -
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Precia Ethical can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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 Precia Ethical in the Sales & Marketing sector and impact the bottomline of the organization.
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 Precia Ethical business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Precia Pharma: Promoting Ethical Sales Practices, Precia Ethical may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
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. Precia Ethical 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.
Shortening product life cycle
– it is one of the major threat that Precia Ethical is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Precia Ethical 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.
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. Precia Ethical needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
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.
Increasing wage structure of Precia Ethical
– 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 Precia Ethical.
Technology acceleration in Forth Industrial Revolution
– Precia Ethical has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Precia Ethical needs to keep up with the evolution of technology in the Sales & Marketing 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, Precia Ethical 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 Precia Pharma: Promoting Ethical Sales Practices .
Weighted SWOT Analysis of Precia Pharma: Promoting Ethical Sales Practices 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 Precia Pharma: Promoting Ethical Sales Practices 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 Precia Pharma: Promoting Ethical Sales Practices 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 Precia Pharma: Promoting Ethical Sales Practices 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 Precia Pharma: Promoting Ethical Sales Practices 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 Precia Ethical needs to make to build a sustainable competitive advantage.