Case Study Description of ALPES S.A.: A Joint Venture Proposal (A)
The senior vice-president for corporate development for Charles River Laboratories must prepare a presentation to the company's board of directors requesting up to a $2 million investment in a Mexican joint venture with a family-owned animal health company. However, the CEO views the proposed joint venture as a potential distraction while his company continues to expand rapidly in the United States. He is also worried about the risks of investing in a country like Mexico and the plan to partner with a small, family-owned company. Moreover, the Mexican partner is unable to invest any cash in the joint venture, which would need to be fully funded by Charles River Laboratories.
Authors :: Henry W. Lane, Dennis Shaughnessy, David T.A. Wesley
Swot Analysis of "ALPES S.A.: A Joint Venture Proposal (A)" written by Henry W. Lane, Dennis Shaughnessy, David T.A. Wesley includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Joint Laboratories facing as an external strategic factors. Some of the topics covered in ALPES S.A.: A Joint Venture Proposal (A) case study are - Strategic Management Strategies, Financial management, Joint ventures, Risk management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the ALPES S.A.: A Joint Venture Proposal (A) casestudy better are - – supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, wage bills are increasing, talent flight as more people leaving formal jobs, increasing commodity prices, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google,
there is increasing trade war between United States & China, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of ALPES S.A.: A Joint Venture Proposal (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in ALPES S.A.: A Joint Venture Proposal (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Joint Laboratories, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Joint Laboratories 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 ALPES S.A.: A Joint Venture Proposal (A) can be done for the following purposes –
1. Strategic planning using facts provided in ALPES S.A.: A Joint Venture Proposal (A) case study
2. Improving business portfolio management of Joint Laboratories
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 Joint Laboratories
Strengths ALPES S.A.: A Joint Venture Proposal (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Joint Laboratories in ALPES S.A.: A Joint Venture Proposal (A) Harvard Business Review case study are -
Innovation driven organization
– Joint Laboratories is one of the most innovative firm in sector. Manager in ALPES S.A.: A Joint Venture Proposal (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of Joint Laboratories
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Joint Laboratories does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Joint Laboratories 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 ALPES S.A.: A Joint Venture Proposal (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Joint Laboratories is one of the leading recruiters in the industry. Managers in the ALPES S.A.: A Joint Venture Proposal (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Joint Laboratories is present in almost all the verticals within the industry. This has provided firm in ALPES S.A.: A Joint Venture Proposal (A) 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.
Cross disciplinary teams
– Horizontal connected teams at the Joint Laboratories 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.
Learning organization
- Joint Laboratories 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 Joint Laboratories is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in ALPES S.A.: A Joint Venture Proposal (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Joint Laboratories has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Joint Laboratories 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.
Superior customer experience
– The customer experience strategy of Joint Laboratories in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Joint Laboratories digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Joint Laboratories 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
– Joint Laboratories 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 Henry W. Lane, Dennis Shaughnessy, David T.A. Wesley 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.
Highly skilled collaborators
– Joint Laboratories 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 ALPES S.A.: A Joint Venture Proposal (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses ALPES S.A.: A Joint Venture Proposal (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ALPES S.A.: A Joint Venture Proposal (A) are -
High bargaining power of channel partners
– Because of the regulatory requirements, Henry W. Lane, Dennis Shaughnessy, David T.A. Wesley suggests that, Joint Laboratories 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.
Products dominated business model
– Even though Joint Laboratories 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 - ALPES S.A.: A Joint Venture Proposal (A) should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Joint Laboratories 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.
High operating costs
– Compare to the competitors, firm in the HBR case study ALPES S.A.: A Joint Venture Proposal (A) 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 Joint Laboratories 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Joint Laboratories is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study ALPES S.A.: A Joint Venture Proposal (A) 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 ALPES S.A.: A Joint Venture Proposal (A) HBR case study mentions - Joint Laboratories 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.
Need for greater diversity
– Joint Laboratories 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 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 Joint Laboratories supply chain. Even after few cautionary changes mentioned in the HBR case study - ALPES S.A.: A Joint Venture Proposal (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Joint Laboratories vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study ALPES S.A.: A Joint Venture Proposal (A) 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 ALPES S.A.: A Joint Venture Proposal (A) can leverage the sales team experience to cultivate customer relationships as Joint Laboratories is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Joint Laboratories 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.
Interest costs
– Compare to the competition, Joint Laboratories 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.
Opportunities ALPES S.A.: A Joint Venture Proposal (A) | 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 ALPES S.A.: A Joint Venture Proposal (A) are -
Leveraging digital technologies
– Joint Laboratories 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Joint Laboratories 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 Joint Laboratories 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, Joint Laboratories can use these opportunities to build new business models that can help the communities that Joint Laboratories operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
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 Joint Laboratories 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Joint Laboratories 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, ALPES S.A.: A Joint Venture Proposal (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Joint Laboratories 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Joint Laboratories 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.
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 Joint Laboratories in the consumer business. Now Joint Laboratories 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 Joint Laboratories has opened avenues for new revenue streams for the organization in the industry. This can help Joint Laboratories to build a more holistic ecosystem as suggested in the ALPES S.A.: A Joint Venture Proposal (A) case study. Joint Laboratories can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Joint Laboratories can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Joint Laboratories to increase its market reach. Joint Laboratories 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.
Loyalty marketing
– Joint Laboratories 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.
Buying journey improvements
– Joint Laboratories can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. ALPES S.A.: A Joint Venture Proposal (A) 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.
Threats ALPES S.A.: A Joint Venture Proposal (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study ALPES S.A.: A Joint Venture Proposal (A) are -
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 Joint Laboratories 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
– Joint Laboratories 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Joint Laboratories 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 ALPES S.A.: A Joint Venture Proposal (A) .
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.
Technology acceleration in Forth Industrial Revolution
– Joint Laboratories has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Joint Laboratories 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.
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. Joint Laboratories 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 Joint Laboratories
– 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 Joint Laboratories.
Shortening product life cycle
– it is one of the major threat that Joint Laboratories is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Joint Laboratories business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Joint Laboratories 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. Joint Laboratories can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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 Joint Laboratories.
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. Joint Laboratories needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Weighted SWOT Analysis of ALPES S.A.: A Joint Venture Proposal (A) 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 ALPES S.A.: A Joint Venture Proposal (A) 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 ALPES S.A.: A Joint Venture Proposal (A) 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 ALPES S.A.: A Joint Venture Proposal (A) 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 ALPES S.A.: A Joint Venture Proposal (A) 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 Joint Laboratories needs to make to build a sustainable competitive advantage.
