Shanghai Pharmaceuticals: Seeking A Prescription For Digital Transformation SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Shanghai Pharmaceuticals: Seeking A Prescription For Digital Transformation
By 2015, China had one of the world's largest and most complex healthcare industries. This industry had been undergoing unprecedented change in diverse areas, from policies to technologies. Shanghai Pharmaceuticals, China's second-largest pharmaceutical company, spanned the entire pharmaceutical value chain, from product research and development to sales. The company's core competency was in drug distribution, which generated 70 per cent of the firm's revenue. The company's leadership in distribution was enabled by its information technology infrastructure and data. However, with the Internet and digital technologies becoming key drivers of China's healthcare sector, the company needed to rethink its business and develop a future strategy to sustain its success in the age of digital disruption.
Swot Analysis of "Shanghai Pharmaceuticals: Seeking A Prescription For Digital Transformation" written by Ming Dong, Ning Su includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Shanghai Pharmaceuticals facing as an external strategic factors. Some of the topics covered in Shanghai Pharmaceuticals: Seeking A Prescription For Digital Transformation case study are - Strategic Management Strategies, Strategy, Supply chain and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Shanghai Pharmaceuticals: Seeking A Prescription For Digital Transformation casestudy better are - – cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, increasing household debt because of falling income levels,
geopolitical disruptions, technology disruption, etc
Introduction to SWOT Analysis of Shanghai Pharmaceuticals: Seeking A Prescription For Digital Transformation
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Shanghai Pharmaceuticals: Seeking A Prescription For Digital Transformation case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shanghai Pharmaceuticals, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shanghai Pharmaceuticals 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 Shanghai Pharmaceuticals: Seeking A Prescription For Digital Transformation can be done for the following purposes –
1. Strategic planning using facts provided in Shanghai Pharmaceuticals: Seeking A Prescription For Digital Transformation case study
2. Improving business portfolio management of Shanghai Pharmaceuticals
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Shanghai Pharmaceuticals
Strengths Shanghai Pharmaceuticals: Seeking A Prescription For Digital Transformation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shanghai Pharmaceuticals in Shanghai Pharmaceuticals: Seeking A Prescription For Digital Transformation Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Shanghai Pharmaceuticals in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Shanghai Pharmaceuticals is one of the leading recruiters in the industry. Managers in the Shanghai Pharmaceuticals: Seeking A Prescription For Digital Transformation are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Shanghai Pharmaceuticals has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Shanghai Pharmaceuticals 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Shanghai Pharmaceuticals digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Shanghai Pharmaceuticals 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.
High switching costs
– The high switching costs that Shanghai Pharmaceuticals 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 Shanghai Pharmaceuticals in the sector have low bargaining power. Shanghai Pharmaceuticals: Seeking A Prescription For Digital Transformation has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Shanghai Pharmaceuticals to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Shanghai Pharmaceuticals is present in almost all the verticals within the industry. This has provided firm in Shanghai Pharmaceuticals: Seeking A Prescription For Digital Transformation 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.
Strong track record of project management
– Shanghai Pharmaceuticals is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Shanghai Pharmaceuticals 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 Shanghai Pharmaceuticals: Seeking A Prescription For Digital Transformation HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Shanghai Pharmaceuticals 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 Ming Dong, Ning Su 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.
Effective Research and Development (R&D)
– Shanghai Pharmaceuticals 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 Shanghai Pharmaceuticals: Seeking A Prescription For Digital Transformation - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Shanghai Pharmaceuticals 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 Shanghai Pharmaceuticals is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Shanghai Pharmaceuticals: Seeking A Prescription For Digital Transformation Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Shanghai Pharmaceuticals: Seeking A Prescription For Digital Transformation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shanghai Pharmaceuticals: Seeking A Prescription For Digital Transformation are -
High bargaining power of channel partners
– Because of the regulatory requirements, Ming Dong, Ning Su suggests that, Shanghai Pharmaceuticals 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 decision making process
– As mentioned earlier in the report, Shanghai Pharmaceuticals 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. Shanghai Pharmaceuticals 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.
Need for greater diversity
– Shanghai Pharmaceuticals has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High operating costs
– Compare to the competitors, firm in the HBR case study Shanghai Pharmaceuticals: Seeking A Prescription For Digital Transformation has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Shanghai Pharmaceuticals 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Shanghai Pharmaceuticals 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.
High cash cycle compare to competitors
Shanghai Pharmaceuticals 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.
No frontier risks strategy
– After analyzing the HBR case study Shanghai Pharmaceuticals: Seeking A Prescription For Digital Transformation, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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.
Interest costs
– Compare to the competition, Shanghai Pharmaceuticals 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Shanghai Pharmaceuticals is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Shanghai Pharmaceuticals: Seeking A Prescription For Digital Transformation can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Shanghai Pharmaceuticals products
– To increase the profitability and margins on the products, Shanghai Pharmaceuticals needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Shanghai Pharmaceuticals 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 - Shanghai Pharmaceuticals: Seeking A Prescription For Digital Transformation should strive to include more intangible value offerings along with its core products and services.
Opportunities Shanghai Pharmaceuticals: Seeking A Prescription For Digital Transformation | 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 Shanghai Pharmaceuticals: Seeking A Prescription For Digital Transformation 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 Shanghai Pharmaceuticals in the consumer business. Now Shanghai Pharmaceuticals can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Shanghai Pharmaceuticals can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Shanghai Pharmaceuticals: Seeking A Prescription For Digital Transformation 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Shanghai Pharmaceuticals 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. Shanghai Pharmaceuticals 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.
Loyalty marketing
– Shanghai Pharmaceuticals 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.
Building a culture of innovation
– managers at Shanghai Pharmaceuticals 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 Leadership & Managing People segment.
Low interest rates
– Even though inflation is raising its head in most developed economies, Shanghai Pharmaceuticals can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Using analytics as competitive advantage
– Shanghai Pharmaceuticals 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 Shanghai Pharmaceuticals: Seeking A Prescription For Digital Transformation - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shanghai Pharmaceuticals to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Shanghai Pharmaceuticals 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.
Manufacturing automation
– Shanghai Pharmaceuticals can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Shanghai Pharmaceuticals 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 Leadership & Managing People industry, but it has also influenced the consumer preferences. Shanghai Pharmaceuticals can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Shanghai Pharmaceuticals to increase its market reach. Shanghai Pharmaceuticals 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.
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 Shanghai Pharmaceuticals 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.
Threats Shanghai Pharmaceuticals: Seeking A Prescription For Digital Transformation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Shanghai Pharmaceuticals: Seeking A Prescription For Digital Transformation are -
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Shanghai Pharmaceuticals needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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. Shanghai Pharmaceuticals 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 Shanghai Pharmaceuticals is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Shanghai Pharmaceuticals.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Shanghai Pharmaceuticals 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Shanghai Pharmaceuticals: Seeking A Prescription For Digital Transformation, Shanghai Pharmaceuticals may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Technology acceleration in Forth Industrial Revolution
– Shanghai Pharmaceuticals has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Shanghai Pharmaceuticals needs to keep up with the evolution of technology in the Leadership & Managing People 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Shanghai Pharmaceuticals in the Leadership & Managing People industry. The Leadership & Managing People 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Shanghai Pharmaceuticals 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 Shanghai Pharmaceuticals: Seeking A Prescription For Digital Transformation .
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.
Stagnating economy with rate increase
– Shanghai Pharmaceuticals 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.
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 Shanghai Pharmaceuticals business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Shanghai Pharmaceuticals: Seeking A Prescription For Digital Transformation 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 Shanghai Pharmaceuticals: Seeking A Prescription For Digital Transformation 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 Shanghai Pharmaceuticals: Seeking A Prescription For Digital Transformation 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 Shanghai Pharmaceuticals: Seeking A Prescription For Digital Transformation 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 Shanghai Pharmaceuticals: Seeking A Prescription For Digital Transformation 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 Shanghai Pharmaceuticals needs to make to build a sustainable competitive advantage.