The "Most Hated CEO" in America SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The "Most Hated CEO" in America
In the fall of 2015, Turing Pharmaceuticals increased the price of its recently acquired drug, Daraprim, by several thousand percent. While the short-term effect on profits would be substantial, the long-term effects were less clear. The CEO, Martin Shkreli, was constantly in the media flaunting his pricing strategy as a way to maximize Turing's profits. The subsequent attention from media and government officials was forcing the CEO to defend his positions. After announcing to the media on September 23, 2015, that the price of Daraprim would be lowered, Martin Shkreli needed to decide if he would follow through on lowering the price of Daraprim.
Authors :: Michael D. Jones
Topics :: Finance & Accounting
Tags :: Pricing, Public relations, Regulation, Social responsibility, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis
Swot Analysis of "The "Most Hated CEO" in America" written by Michael D. Jones includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Daraprim Shkreli facing as an external strategic factors. Some of the topics covered in The "Most Hated CEO" in America case study are - Strategic Management Strategies, Pricing, Public relations, Regulation, Social responsibility and Finance & Accounting.
Some of the macro environment factors that can be used to understand the The "Most Hated CEO" in America casestudy better are - – digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, wage bills are increasing, supply chains are disrupted by pandemic , geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies,
increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of The "Most Hated CEO" in America
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The "Most Hated CEO" in America case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Daraprim Shkreli, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Daraprim Shkreli 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 The "Most Hated CEO" in America can be done for the following purposes –
1. Strategic planning using facts provided in The "Most Hated CEO" in America case study
2. Improving business portfolio management of Daraprim Shkreli
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Daraprim Shkreli
Strengths The "Most Hated CEO" in America | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Daraprim Shkreli in The "Most Hated CEO" in America Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Daraprim Shkreli 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.
Operational resilience
– The operational resilience strategy in the The "Most Hated CEO" in America 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.
Low bargaining power of suppliers
– Suppliers of Daraprim Shkreli in the sector have low bargaining power. The "Most Hated CEO" in America has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Daraprim Shkreli to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Daraprim Shkreli 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 Daraprim Shkreli is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The "Most Hated CEO" in America Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Daraprim Shkreli is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Daraprim Shkreli is one of the most innovative firm in sector. Manager in The "Most Hated CEO" in America Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Daraprim Shkreli has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Daraprim Shkreli 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.
Training and development
– Daraprim Shkreli has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The "Most Hated CEO" in America 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 recruit top talent
– Daraprim Shkreli is one of the leading recruiters in the industry. Managers in the The "Most Hated CEO" in America are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Daraprim Shkreli has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Daraprim Shkreli to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Finance & Accounting industry
– The "Most Hated CEO" in America firm has clearly differentiated products in the market place. This has enabled Daraprim Shkreli to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Daraprim Shkreli to invest into research and development (R&D) and innovation.
Analytics focus
– Daraprim Shkreli 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 Michael D. Jones 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.
Weaknesses The "Most Hated CEO" in America | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The "Most Hated CEO" in America are -
Slow decision making process
– As mentioned earlier in the report, Daraprim Shkreli has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Daraprim Shkreli even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Low market penetration in new markets
– Outside its home market of Daraprim Shkreli, firm in the HBR case study The "Most Hated CEO" in America needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The "Most Hated CEO" in America, it seems that the employees of Daraprim Shkreli 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.
Increasing silos among functional specialists
– The organizational structure of Daraprim Shkreli is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Daraprim Shkreli needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Daraprim Shkreli to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Michael D. Jones suggests that, Daraprim Shkreli 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Daraprim Shkreli 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Daraprim Shkreli is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The "Most Hated CEO" in America can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Daraprim Shkreli 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 - The "Most Hated CEO" in America should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Daraprim Shkreli 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 strategic competitive environment developments
– As The "Most Hated CEO" in America HBR case study mentions - Daraprim Shkreli 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 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 Daraprim Shkreli supply chain. Even after few cautionary changes mentioned in the HBR case study - The "Most Hated CEO" in America, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Daraprim Shkreli vulnerable to further global disruptions in South East Asia.
Opportunities The "Most Hated CEO" in America | 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 The "Most Hated CEO" in America are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Daraprim Shkreli is facing challenges because of the dominance of functional experts in the organization. The "Most Hated CEO" in America 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Daraprim Shkreli 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, The "Most Hated CEO" in America, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Daraprim Shkreli in the consumer business. Now Daraprim Shkreli can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Daraprim Shkreli has opened avenues for new revenue streams for the organization in the industry. This can help Daraprim Shkreli to build a more holistic ecosystem as suggested in the The "Most Hated CEO" in America case study. Daraprim Shkreli can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Daraprim Shkreli can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The "Most Hated CEO" in America 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 Daraprim Shkreli 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.
Leveraging digital technologies
– Daraprim Shkreli can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Loyalty marketing
– Daraprim Shkreli 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.
Using analytics as competitive advantage
– Daraprim Shkreli 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 The "Most Hated CEO" in America - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Daraprim Shkreli to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Daraprim Shkreli 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 Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Daraprim Shkreli 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. Daraprim Shkreli 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.
Better consumer reach
– The expansion of the 5G network will help Daraprim Shkreli to increase its market reach. Daraprim Shkreli 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Daraprim Shkreli in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Threats The "Most Hated CEO" in America External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The "Most Hated CEO" in America are -
Consumer confidence and its impact on Daraprim Shkreli 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.
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 Daraprim Shkreli in the Finance & Accounting 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 Daraprim Shkreli business can come under increasing regulations regarding data privacy, data security, 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. Daraprim Shkreli 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 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Daraprim Shkreli with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Daraprim Shkreli 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.
Increasing wage structure of Daraprim Shkreli
– 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 Daraprim Shkreli.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Daraprim Shkreli in the Finance & Accounting industry. The Finance & Accounting 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.
Shortening product life cycle
– it is one of the major threat that Daraprim Shkreli is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Daraprim Shkreli 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. Daraprim Shkreli can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Daraprim Shkreli 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, Daraprim Shkreli 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 The "Most Hated CEO" in America .
Weighted SWOT Analysis of The "Most Hated CEO" in America 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 The "Most Hated CEO" in America 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 The "Most Hated CEO" in America 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 The "Most Hated CEO" in America 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 The "Most Hated CEO" in America 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 Daraprim Shkreli needs to make to build a sustainable competitive advantage.
