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 - – talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic ,
increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, 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 -
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.
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.
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.
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.
Superior customer experience
– The customer experience strategy of Similares Farmacias in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Similares Farmacias
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Similares Farmacias does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Global Business industry
– Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version firm has clearly differentiated products in the market place. This has enabled Similares Farmacias to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Similares Farmacias to invest into research and development (R&D) and innovation.
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.
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.
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.
Low bargaining power of suppliers
– Suppliers of Similares Farmacias in the sector have low bargaining power. Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Similares Farmacias to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Similares Farmacias is present in almost all the verticals within the industry. This has provided firm in Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version 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.
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 -
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Michael Chu, Regina Garcia-Cuellar suggests that, Similares Farmacias 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.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version, in the dynamic environment Similares Farmacias has struggled to respond to the nimble upstart competition. Similares Farmacias has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
Products dominated business model
– Even though Similares Farmacias 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 - Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version, is just above the industry average. Similares Farmacias 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.
Skills based hiring
– The stress on hiring functional specialists at Similares Farmacias 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version, it seems that the employees of Similares Farmacias don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
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 operating costs
– Compare to the competitors, firm in the HBR case study Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version 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 Similares Farmacias 's lucrative customers.
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 -
Manufacturing automation
– Similares Farmacias 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
– Similares Farmacias 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Similares Farmacias 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 Similares Farmacias to hire the very best people irrespective of their geographical location.
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.
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.
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.
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.
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Similares Farmacias 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.
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.
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.
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 -
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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Similares Farmacias 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 Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version .
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.
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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version, Similares Farmacias 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 .
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Similares Farmacias 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.
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.
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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You can download Excel Template of Case Study Solution & Analysis of Farmacias Similares: Private and Public Health Care for the Base of the Pyramid in Mexico, Portuguese Version
