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 - – 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, competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, increasing commodity prices, there is increasing trade war between United States & China,
increasing transportation and logistics costs, technology disruption, 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 -
Low bargaining power of suppliers
– Suppliers of Genentech Perkins in the sector have low bargaining power. Kleiner-Perkins and Genentech: When Venture Capital Met Science has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Genentech Perkins to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Genentech Perkins 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 Kleiner-Perkins and Genentech: When Venture Capital Met Science HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
Innovation driven organization
– Genentech Perkins is one of the most innovative firm in sector. Manager in Kleiner-Perkins and Genentech: When Venture Capital Met Science Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Genentech Perkins is present in almost all the verticals within the industry. This has provided firm in Kleiner-Perkins and Genentech: When Venture Capital Met Science 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.
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.
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Genentech Perkins 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.
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 -
Lack of clear differentiation of Genentech Perkins products
– To increase the profitability and margins on the products, Genentech Perkins needs to provide more differentiated products than what it is currently offering in the marketplace.
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 cash cycle compare to competitors
Genentech Perkins 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.
Need for greater diversity
– Genentech Perkins 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.
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.
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.
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.
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.
Slow decision making process
– As mentioned earlier in the report, Genentech Perkins 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. Genentech Perkins 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.
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.
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.
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 -
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. Genentech Perkins 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. Genentech Perkins 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.
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.
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. Genentech Perkins can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
Building a culture of innovation
– managers at Genentech Perkins 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 Finance & Accounting segment.
Creating value in data economy
– The success of analytics program of Genentech Perkins has opened avenues for new revenue streams for the organization in the industry. This can help Genentech Perkins to build a more holistic ecosystem as suggested in the Kleiner-Perkins and Genentech: When Venture Capital Met Science case study. Genentech Perkins can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Genentech Perkins can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Kleiner-Perkins and Genentech: When Venture Capital Met Science 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.
Using analytics as competitive advantage
– Genentech Perkins 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 Kleiner-Perkins and Genentech: When Venture Capital Met Science - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Genentech Perkins to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
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.
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.
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.
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.
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 -
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Genentech Perkins with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Genentech Perkins.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Kleiner-Perkins and Genentech: When Venture Capital Met Science, Genentech Perkins may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
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. Genentech Perkins 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.
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.
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.
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.
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.
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.
