Burroughs Wellcome and the Pricing of AZT (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Burroughs Wellcome and the Pricing of AZT (A)
This case focuses on the development of AZT, the first drug approved for the treatment of AIDS, and the issues faced by its U.K. producer, Wellcome PLC, as it decides how to set the drug's price. The case includes brief overviews of the disease itself, drugs in development to treat it, the pharmaceutical industry and its practices, and the history of Wellcome PLC and its U.S. subsidiary, Burroughs Wellcome. The A case concludes with analysts' predictions for the soon-to-be-announced price of AZT. See also the B case and the C case.
Swot Analysis of "Burroughs Wellcome and the Pricing of AZT (A)" written by Jeanne M. Liedtka includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Wellcome Azt facing as an external strategic factors. Some of the topics covered in Burroughs Wellcome and the Pricing of AZT (A) case study are - Strategic Management Strategies, Ethics, Pricing, Social responsibility and Global Business.
Some of the macro environment factors that can be used to understand the Burroughs Wellcome and the Pricing of AZT (A) casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, central banks are concerned over increasing inflation, increasing household debt because of falling income levels, increasing transportation and logistics costs, increasing commodity prices,
challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Burroughs Wellcome and the Pricing of AZT (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Burroughs Wellcome and the Pricing of AZT (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Wellcome Azt, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Wellcome Azt 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 Burroughs Wellcome and the Pricing of AZT (A) can be done for the following purposes –
1. Strategic planning using facts provided in Burroughs Wellcome and the Pricing of AZT (A) case study
2. Improving business portfolio management of Wellcome Azt
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Wellcome Azt
Strengths Burroughs Wellcome and the Pricing of AZT (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Wellcome Azt in Burroughs Wellcome and the Pricing of AZT (A) Harvard Business Review case study are -
Effective Research and Development (R&D)
– Wellcome Azt 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 Burroughs Wellcome and the Pricing of AZT (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.
Diverse revenue streams
– Wellcome Azt is present in almost all the verticals within the industry. This has provided firm in Burroughs Wellcome and the Pricing of AZT (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.
Superior customer experience
– The customer experience strategy of Wellcome Azt 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
– Wellcome Azt is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy in the Burroughs Wellcome and the Pricing of AZT (A) 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.
Innovation driven organization
– Wellcome Azt is one of the most innovative firm in sector. Manager in Burroughs Wellcome and the Pricing of AZT (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Wellcome Azt 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.
High brand equity
– Wellcome Azt has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Wellcome Azt to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Wellcome Azt 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 Burroughs Wellcome and the Pricing of AZT (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Global Business industry
– Burroughs Wellcome and the Pricing of AZT (A) firm has clearly differentiated products in the market place. This has enabled Wellcome Azt to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Wellcome Azt to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Wellcome Azt in the sector have low bargaining power. Burroughs Wellcome and the Pricing of AZT (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Wellcome Azt to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Wellcome Azt has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Wellcome Azt 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.
Weaknesses Burroughs Wellcome and the Pricing of AZT (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Burroughs Wellcome and the Pricing of AZT (A) are -
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 Wellcome Azt supply chain. Even after few cautionary changes mentioned in the HBR case study - Burroughs Wellcome and the Pricing of AZT (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Wellcome Azt vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the segment, Wellcome Azt 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.
Skills based hiring
– The stress on hiring functional specialists at Wellcome Azt has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Burroughs Wellcome and the Pricing of AZT (A), in the dynamic environment Wellcome Azt has struggled to respond to the nimble upstart competition. Wellcome Azt has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As Burroughs Wellcome and the Pricing of AZT (A) HBR case study mentions - Wellcome Azt 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.
Low market penetration in new markets
– Outside its home market of Wellcome Azt, firm in the HBR case study Burroughs Wellcome and the Pricing of AZT (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Wellcome Azt 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. Wellcome Azt 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Burroughs Wellcome and the Pricing of AZT (A) 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 Wellcome Azt has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study Burroughs Wellcome and the Pricing of AZT (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 Burroughs Wellcome and the Pricing of AZT (A) can leverage the sales team experience to cultivate customer relationships as Wellcome Azt is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Burroughs Wellcome and the Pricing of AZT (A), is just above the industry average. Wellcome Azt 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.
Increasing silos among functional specialists
– The organizational structure of Wellcome Azt is dominated by functional specialists. It is not different from other players in the Global Business segment. Wellcome Azt needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Wellcome Azt to focus more on services rather than just following the product oriented approach.
Opportunities Burroughs Wellcome and the Pricing of AZT (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 Burroughs Wellcome and the Pricing of AZT (A) are -
Building a culture of innovation
– managers at Wellcome Azt 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 Global Business segment.
Loyalty marketing
– Wellcome Azt 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Wellcome Azt can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Wellcome Azt 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 Burroughs Wellcome and the Pricing of AZT (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Wellcome Azt to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Wellcome Azt is facing challenges because of the dominance of functional experts in the organization. Burroughs Wellcome and the Pricing of AZT (A) 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.
Creating value in data economy
– The success of analytics program of Wellcome Azt has opened avenues for new revenue streams for the organization in the industry. This can help Wellcome Azt to build a more holistic ecosystem as suggested in the Burroughs Wellcome and the Pricing of AZT (A) case study. Wellcome Azt can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Wellcome Azt to increase its market reach. Wellcome Azt will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Wellcome Azt in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Leveraging digital technologies
– Wellcome Azt 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.
Learning at scale
– Online learning technologies has now opened space for Wellcome Azt 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Wellcome Azt 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, Burroughs Wellcome and the Pricing of AZT (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.
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 Wellcome Azt in the consumer business. Now Wellcome Azt can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Wellcome Azt can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Burroughs Wellcome and the Pricing of AZT (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Burroughs Wellcome and the Pricing of AZT (A) are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Wellcome Azt 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 Burroughs Wellcome and the Pricing of AZT (A) .
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 Wellcome Azt in the Global Business sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Wellcome Azt 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.
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. Wellcome Azt needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Environmental challenges
– Wellcome Azt 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. Wellcome Azt can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Wellcome Azt with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Wellcome Azt has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Wellcome Azt needs to keep up with the evolution of technology in the Global Business 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.
Stagnating economy with rate increase
– Wellcome Azt 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Wellcome Azt in the Global Business industry. The Global Business 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.
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 Wellcome Azt business can come under increasing regulations regarding data privacy, data security, etc.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Wellcome Azt can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Wellcome Azt 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 Global Business industry regulations.
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. Wellcome Azt 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.
Weighted SWOT Analysis of Burroughs Wellcome and the Pricing of AZT (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 Burroughs Wellcome and the Pricing of AZT (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 Burroughs Wellcome and the Pricing of AZT (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 Burroughs Wellcome and the Pricing of AZT (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 Burroughs Wellcome and the Pricing of AZT (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 Wellcome Azt needs to make to build a sustainable competitive advantage.