Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version
This case should be printed in color.Farmacias Similares, serving Mexico's low-income sector, grew to $600 million sales and 3,400 drugstores while deep reforms to help the poor swept the public health system. Adjacent to each store, for $2 per visit, medical clinics provided access to doctors for 2.3 million people a month. Narrates the growth of the chain, examines the reasons for its success, and projects a pro forma of the company's financial returns. Places Farmacias Similares in the context of Mexico's public health system and the pharmaceutical industry.
Swot Analysis of "Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version" written by Michael Chu, Regina Garcia-Cuellar includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Similares Farmacias facing as an external strategic factors. Some of the topics covered in Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version case study are - Strategic Management Strategies, Social enterprise and Global Business.
Some of the macro environment factors that can be used to understand the Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version casestudy better are - – increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, increasing transportation and logistics costs,
increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Similares Farmacias, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Similares Farmacias 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 Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version can be done for the following purposes –
1. Strategic planning using facts provided in Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version case study
2. Improving business portfolio management of Similares Farmacias
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 Similares Farmacias
Strengths Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Similares Farmacias in Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version Harvard Business Review case study are -
Ability to lead change in Global Business field
– Similares Farmacias 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 Similares Farmacias in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Similares Farmacias is one of the leading recruiters in the industry. Managers in the Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Similares Farmacias 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
– Similares Farmacias has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Similares Farmacias to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Similares Farmacias has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version 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.
Successful track record of launching new products
– Similares Farmacias has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Similares Farmacias 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.
Effective Research and Development (R&D)
– Similares Farmacias 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 Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Similares Farmacias 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 Michael Chu, Regina Garcia-Cuellar 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
– Similares Farmacias is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Similares Farmacias is one of the most innovative firm in sector. Manager in Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version 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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Similares Farmacias digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Similares Farmacias 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.
Weaknesses Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version are -
Slow decision making process
– As mentioned earlier in the report, Similares Farmacias 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. Similares Farmacias 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.
Increasing silos among functional specialists
– The organizational structure of Similares Farmacias is dominated by functional specialists. It is not different from other players in the Global Business segment. Similares Farmacias needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Similares Farmacias to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Similares Farmacias 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Similares Farmacias is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Similares Farmacias needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version 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 Similares Farmacias has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Similares Farmacias 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.
Interest costs
– Compare to the competition, Similares Farmacias 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.
Low market penetration in new markets
– Outside its home market of Similares Farmacias, firm in the HBR case study Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Similares Farmacias products
– To increase the profitability and margins on the products, Similares Farmacias needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version HBR case study mentions - Similares Farmacias 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.
Opportunities Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version | 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 Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Similares Farmacias 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, Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Similares Farmacias can use these opportunities to build new business models that can help the communities that Similares Farmacias operates in. Secondly it can use opportunities from government spending in Global Business sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Similares Farmacias 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.
Using analytics as competitive advantage
– Similares Farmacias 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 Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Similares Farmacias to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Similares Farmacias to increase its market reach. Similares Farmacias 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.
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 Similares Farmacias in the consumer business. Now Similares Farmacias can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Similares Farmacias 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.
Leveraging digital technologies
– Similares Farmacias 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.
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. Similares Farmacias can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Similares Farmacias 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Similares Farmacias can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Similares Farmacias can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Similares Farmacias is facing challenges because of the dominance of functional experts in the organization. Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version 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.
Threats Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version are -
Technology acceleration in Forth Industrial Revolution
– Similares Farmacias has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Similares Farmacias 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.
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. Similares Farmacias can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
Increasing wage structure of Similares Farmacias
– 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 Similares Farmacias.
Stagnating economy with rate increase
– Similares Farmacias 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.
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. Similares Farmacias 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.
Shortening product life cycle
– it is one of the major threat that Similares Farmacias is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Similares Farmacias in the Global Business sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Similares Farmacias 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.
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 Similares Farmacias 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 Similares Farmacias with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Similares Farmacias 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.
Weighted SWOT Analysis of Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version 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 Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version 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 Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version 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 Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version 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 Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version 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 Similares Farmacias needs to make to build a sustainable competitive advantage.
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