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 - – increasing commodity prices, increasing household debt because of falling income levels, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs, etc

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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.

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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

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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 -

Innovation driven organization

– Leisinger Schmitt is one of the most innovative firm in sector. Manager in The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (A) 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

– Leisinger Schmitt is present in almost all the verticals within the industry. This has provided firm in The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (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.

High brand equity

– Leisinger Schmitt has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Leisinger Schmitt to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Sustainable margins compare to other players in Global Business industry

– The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (A) firm has clearly differentiated products in the market place. This has enabled Leisinger Schmitt to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Leisinger Schmitt to invest into research and development (R&D) and innovation.

Highly skilled collaborators

– Leisinger Schmitt 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 The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

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.

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.

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.

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.

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.

Strong track record of project management

– Leisinger Schmitt is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

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.

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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 -

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 cash cycle compare to competitors

Leisinger Schmitt 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.

Low market penetration in new markets

– Outside its home market of Leisinger Schmitt, firm in the HBR case study The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Workers concerns about automation

– As automation is fast increasing in the segment, Leisinger Schmitt 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.

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.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Leisinger Schmitt is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (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.

Aligning sales with marketing

– It come across in the case study The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (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 The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (A) can leverage the sales team experience to cultivate customer relationships as Leisinger Schmitt is planning to shift buying processes online.

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.

Products dominated business model

– Even though Leisinger Schmitt 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 - The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (A) should strive to include more intangible value offerings along with its core products and services.

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.

Lack of clear differentiation of Leisinger Schmitt products

– To increase the profitability and margins on the products, Leisinger Schmitt needs to provide more differentiated products than what it is currently offering in the marketplace.

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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 -

Loyalty marketing

– Leisinger Schmitt 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. 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.

Learning at scale

– Online learning technologies has now opened space for Leisinger Schmitt 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Leisinger Schmitt can use these opportunities to build new business models that can help the communities that Leisinger Schmitt operates in. Secondly it can use opportunities from government spending in Global Business 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 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.

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.

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.

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. Leisinger Schmitt can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Changes in consumer behavior post Covid-19

– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Leisinger Schmitt 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. Leisinger Schmitt 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Leisinger Schmitt is facing challenges because of the dominance of functional experts in the organization. The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (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.

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.

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.

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.

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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 -

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.

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.

High dependence on third party suppliers

– Leisinger Schmitt 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.

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 Leisinger Schmitt in the Global Business sector and impact the bottomline of the organization.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The Novartis Foundation for Sustainable Development: Tackling HIV/AIDS and Poverty in South Africa (A), Leisinger Schmitt may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .

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.

Shortening product life cycle

– it is one of the major threat that Leisinger Schmitt is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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.

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.

Stagnating economy with rate increase

– Leisinger Schmitt can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.

Easy access to finance

– Easy access to finance in 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.

Environmental challenges

– Leisinger Schmitt 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. Leisinger Schmitt can take advantage of this fund but it will also bring new competitors in the Global Business industry.

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.

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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.

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