Kleiner-Perkins and Genentech: When Venture Capital Met Science SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Kleiner-Perkins and Genentech: When Venture Capital Met Science
Genentech is a rare success story in the biotechnology industry. Hundreds of billions of dollars of venture capital have been invested without the expected transformational effects. Established in 1976, Genentech was to develop the new science of recombinant DNA into viable therapeutic products with mass market appeal, something that most scientists agreed was at least a decade away. The founders, Herbert Boyer and Robert Swanson had limited financial resources, so they turned to Tom Perkins, the co-founder of Kleiner-Perkins, for venture funding. Genentech developed through an effective union between scientific and venture investment mindsets. In 1980 an IPO valued Genentech at $300 million. In 2009 it was fully acquired by the Swiss-based healthcare company, Roche, for $47 billion. Roche had held a majority stake in the company since 1990.
Swot Analysis of "Kleiner-Perkins and Genentech: When Venture Capital Met Science" written by G. Felda Hardymon, Tom Nicholas includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Genentech Perkins facing as an external strategic factors. Some of the topics covered in Kleiner-Perkins and Genentech: When Venture Capital Met Science case study are - Strategic Management Strategies, Innovation, Technology, Venture capital and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Kleiner-Perkins and Genentech: When Venture Capital Met Science casestudy better are - – technology disruption, central banks are concerned over increasing inflation, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs,
competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, etc
Introduction to SWOT Analysis of Kleiner-Perkins and Genentech: When Venture Capital Met Science
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Kleiner-Perkins and Genentech: When Venture Capital Met Science case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Genentech Perkins, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Genentech Perkins 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 Kleiner-Perkins and Genentech: When Venture Capital Met Science can be done for the following purposes –
1. Strategic planning using facts provided in Kleiner-Perkins and Genentech: When Venture Capital Met Science case study
2. Improving business portfolio management of Genentech Perkins
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 Genentech Perkins
Strengths Kleiner-Perkins and Genentech: When Venture Capital Met Science | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Genentech Perkins in Kleiner-Perkins and Genentech: When Venture Capital Met Science Harvard Business Review case study are -
Organizational Resilience of Genentech Perkins
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Genentech Perkins does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Genentech Perkins has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Genentech Perkins 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
– Genentech Perkins has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Kleiner-Perkins and Genentech: When Venture Capital Met Science 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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Genentech Perkins digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Genentech Perkins 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.
Analytics focus
– Genentech Perkins 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 G. Felda Hardymon, Tom Nicholas 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.
Ability to lead change in Finance & Accounting field
– Genentech Perkins 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 Genentech Perkins in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Genentech Perkins 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
– Genentech Perkins is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Genentech Perkins 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 Genentech Perkins is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Kleiner-Perkins and Genentech: When Venture Capital Met Science Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Genentech Perkins 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 Kleiner-Perkins and Genentech: When Venture Capital Met Science 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.
Ability to recruit top talent
– Genentech Perkins is one of the leading recruiters in the industry. Managers in the Kleiner-Perkins and Genentech: When Venture Capital Met Science are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Kleiner-Perkins and Genentech: When Venture Capital Met Science | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kleiner-Perkins and Genentech: When Venture Capital Met Science are -
Increasing silos among functional specialists
– The organizational structure of Genentech Perkins is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Genentech Perkins needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Genentech Perkins to focus more on services rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Kleiner-Perkins and Genentech: When Venture Capital Met Science, is just above the industry average. Genentech Perkins 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.
Low market penetration in new markets
– Outside its home market of Genentech Perkins, firm in the HBR case study Kleiner-Perkins and Genentech: When Venture Capital Met Science needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Kleiner-Perkins and Genentech: When Venture Capital Met Science 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 Genentech Perkins has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study Kleiner-Perkins and Genentech: When Venture Capital Met Science 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 Genentech Perkins 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Genentech Perkins 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 bargaining power of channel partners
– Because of the regulatory requirements, G. Felda Hardymon, Tom Nicholas suggests that, Genentech Perkins 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 harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Genentech Perkins is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Kleiner-Perkins and Genentech: When Venture Capital Met Science can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As Kleiner-Perkins and Genentech: When Venture Capital Met Science HBR case study mentions - Genentech Perkins 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 Kleiner-Perkins and Genentech: When Venture Capital Met Science 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 Kleiner-Perkins and Genentech: When Venture Capital Met Science can leverage the sales team experience to cultivate customer relationships as Genentech Perkins is planning to shift buying processes online.
No frontier risks strategy
– After analyzing the HBR case study Kleiner-Perkins and Genentech: When Venture Capital Met Science, it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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 Kleiner-Perkins and Genentech: When Venture Capital Met Science | 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 Kleiner-Perkins and Genentech: When Venture Capital Met Science are -
Learning at scale
– Online learning technologies has now opened space for Genentech Perkins 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.
Better consumer reach
– The expansion of the 5G network will help Genentech Perkins to increase its market reach. Genentech Perkins 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.
Developing new processes and practices
– Genentech Perkins can develop new processes and procedures in Finance & Accounting 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 Genentech Perkins 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.
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 Genentech Perkins 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Genentech Perkins 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 Genentech Perkins to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Genentech Perkins can use these opportunities to build new business models that can help the communities that Genentech Perkins operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Leveraging digital technologies
– Genentech Perkins 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Genentech Perkins 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, Kleiner-Perkins and Genentech: When Venture Capital Met Science, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Genentech Perkins can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Genentech Perkins 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.
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 Genentech Perkins in the consumer business. Now Genentech Perkins can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Genentech Perkins is facing challenges because of the dominance of functional experts in the organization. Kleiner-Perkins and Genentech: When Venture Capital Met Science 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.
Threats Kleiner-Perkins and Genentech: When Venture Capital Met Science External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Kleiner-Perkins and Genentech: When Venture Capital Met Science are -
Environmental challenges
– Genentech Perkins 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. Genentech Perkins can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Regulatory challenges
– Genentech Perkins 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 Finance & Accounting industry regulations.
Stagnating economy with rate increase
– Genentech Perkins 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.
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. Genentech Perkins can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Genentech Perkins in the Finance & Accounting sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Genentech Perkins has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Genentech Perkins needs to keep up with the evolution of technology in the Finance & Accounting 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.
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 Genentech Perkins business can come under increasing regulations regarding data privacy, data security, etc.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Genentech Perkins needs to understand the core reasons impacting the Finance & Accounting 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.
High dependence on third party suppliers
– Genentech Perkins 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.
Increasing wage structure of Genentech Perkins
– 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 Genentech Perkins.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Genentech Perkins 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 Genentech Perkins is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Kleiner-Perkins and Genentech: When Venture Capital Met Science 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 Kleiner-Perkins and Genentech: When Venture Capital Met Science 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 Kleiner-Perkins and Genentech: When Venture Capital Met Science 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 Kleiner-Perkins and Genentech: When Venture Capital Met Science 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 Kleiner-Perkins and Genentech: When Venture Capital Met Science 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 Genentech Perkins needs to make to build a sustainable competitive advantage.