The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (A)

This is a Darden case study.In 1998, Klaus Leisinger and Karin Schmitt of the Novartis Foundation for Sustainable Development in Basel, Switzerland, were approached by a sociologist who wanted help in launching a pilot program in Tanzania to deal with the crisis of the more than 8 million HIV/AIDS-orphaned children in sub-Saharan Africa. The proposed program was unusual in that it addressed the psychological and social traumas these children experienced. The other unusual aspect of this request was that Novartis, at that time the second-largest pharmaceutical company in the world, did not make, sell, or distribute any products related to HIV/AIDS. Novartis, and its philanthropic foundation, was committed to helping the neediest in developing countries, however. Leisinger and Schmitt did not believe that "throwing money" at problems resulted in solutions; rather, they looked for innovative ways to address problems and crises. But given the unusual nature of the request, Leisinger and Schmitt had to decide whether the foundation should help launch this program.

Authors :: Pat Werhane, Jenny Mead

Topics :: Global Business

Tags :: Ethics, Generational issues, Health, Innovation, Leadership, Social enterprise, Social responsibility, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (A)" written by Pat Werhane, Jenny Mead includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Leisinger Schmitt facing as an external strategic factors. Some of the topics covered in The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (A) case study are - Strategic Management Strategies, Ethics, Generational issues, Health, Innovation, Leadership, Social enterprise, Social responsibility and Global Business.

Some of the macro environment factors that can be used to understand the The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (A) casestudy better are - – supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, etc

---

---

---

---

Introduction to SWOT Analysis of The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (A)

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Leisinger Schmitt, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Leisinger Schmitt 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 The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (A) can be done for the following purposes –
1. Strategic planning using facts provided in The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (A) case study
2. Improving business portfolio management of Leisinger Schmitt
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 Leisinger Schmitt

---

Strengths The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Leisinger Schmitt in The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (A) Harvard Business Review case study are -

Training and development

– Leisinger Schmitt has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (A) 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.

Effective Research and Development (R&D)

– Leisinger Schmitt 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 The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (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 lead change in Global Business field

– Leisinger Schmitt 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 Leisinger Schmitt in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Successful track record of launching new products

– Leisinger Schmitt has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Leisinger Schmitt 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.

Analytics focus

– Leisinger Schmitt 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 Pat Werhane, Jenny Mead 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.

Learning organization

- Leisinger Schmitt 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 Leisinger Schmitt is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

Low bargaining power of suppliers

– Suppliers of Leisinger Schmitt in the sector have low bargaining power. The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Leisinger Schmitt to manage not only supply disruptions but also source products at highly competitive prices.

Superior customer experience

– The customer experience strategy of Leisinger Schmitt in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Organizational Resilience of Leisinger Schmitt

– The covid-19 pandemic has put organizational resilience at the centre of everthing that Leisinger Schmitt does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Digital Transformation in Global Business segment

- digital transformation varies from industry to industry. For Leisinger Schmitt digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Leisinger Schmitt has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.

High switching costs

– The high switching costs that Leisinger Schmitt 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.

Cross disciplinary teams

– Horizontal connected teams at the Leisinger Schmitt 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 The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (A) are -

Slow to strategic competitive environment developments

– As The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (A) HBR case study mentions - Leisinger Schmitt 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 dependence on star products

– The top 2 products and services of the firm as mentioned in the The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (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 Leisinger Schmitt has relatively successful track record of launching new products.

Compensation and incentives

– The revenue per employee as mentioned in the HBR case study The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (A), is just above the industry average. Leisinger Schmitt 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.

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 Leisinger Schmitt supply chain. Even after few cautionary changes mentioned in the HBR case study - The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Leisinger Schmitt vulnerable to further global disruptions in South East Asia.

Ability to respond to the competition

– As the decision making is very deliberative, highlighted in the case study The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (A), in the dynamic environment Leisinger Schmitt has struggled to respond to the nimble upstart competition. Leisinger Schmitt has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Increasing silos among functional specialists

– The organizational structure of Leisinger Schmitt is dominated by functional specialists. It is not different from other players in the Global Business segment. Leisinger Schmitt needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Leisinger Schmitt to focus more on services rather than just following the product oriented approach.

Capital Spending Reduction

– Even during the low interest decade, Leisinger Schmitt has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.

Need for greater diversity

– Leisinger Schmitt has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.

High operating costs

– Compare to the competitors, firm in the HBR case study The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (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 Leisinger Schmitt 's lucrative customers.

High bargaining power of channel partners

– Because of the regulatory requirements, Pat Werhane, Jenny Mead suggests that, Leisinger Schmitt 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.

Skills based hiring

– The stress on hiring functional specialists at Leisinger Schmitt 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.

---

Opportunities The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (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 The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (A) are -

Manufacturing automation

– Leisinger Schmitt can use the latest technology developments to improve its manufacturing and designing process in Global Business segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.

Developing new processes and practices

– Leisinger Schmitt can develop new processes and procedures in Global Business 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.

Using analytics as competitive advantage

– Leisinger Schmitt 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 The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Leisinger Schmitt to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Leisinger Schmitt 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 Leisinger Schmitt to hire the very best people irrespective of their geographical location.

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. Leisinger Schmitt can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

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 Leisinger Schmitt in the consumer business. Now Leisinger Schmitt can target international markets with far fewer capital restrictions requirements than the existing system.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Leisinger Schmitt 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.

Buying journey improvements

– Leisinger Schmitt can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (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.

Better consumer reach

– The expansion of the 5G network will help Leisinger Schmitt to increase its market reach. Leisinger Schmitt 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Leisinger Schmitt 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, The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (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.

Leveraging digital technologies

– Leisinger Schmitt 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.

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 Leisinger Schmitt 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, Leisinger Schmitt 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.

---

Threats The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats mentioned in the HBR case study The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (A) are -

Increasing wage structure of Leisinger Schmitt

– 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 Leisinger Schmitt.

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. Leisinger Schmitt can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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. Leisinger Schmitt needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.

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 Leisinger Schmitt business can come under increasing regulations regarding data privacy, data security, etc.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Leisinger Schmitt with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.

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. Leisinger Schmitt 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.

Technology acceleration in Forth Industrial Revolution

– Leisinger Schmitt has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Leisinger Schmitt 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.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Leisinger Schmitt 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 The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (A) .

Regulatory challenges

– Leisinger Schmitt 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.

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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Leisinger Schmitt 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.

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 Leisinger Schmitt.

Consumer confidence and its impact on Leisinger Schmitt demand

– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.

---

Weighted SWOT Analysis of The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (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 The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (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 The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (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 The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (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 The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (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 Leisinger Schmitt needs to make to build a sustainable competitive advantage.

--- ---