Burroughs Wellcome and AZT (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of Burroughs Wellcome and AZT (A)

This case is accompanied by a Video Short that can be shown in class or included in a digital coursepack. Instructors should consider the timing of making the video available to students, as it may reveal key case details.Burroughs Wellcome Co., developer of AZT, the first drug approved by the U.S. Food and Drug Administration for the treatment of Acquired Immune Deficiency Syndrome (AIDS), finds itself under siege in September 1989 by AIDS activists and various segments of the U.S. government. In spite of repeated demands over the previous two years to lower the price of AZT (trademarked Retrovie), Burroughs Wellcome and its parent company, London-based Wellcome PLC, have refused, claiming that the $6,300 annual (wholesale) cost of the drug per person is justified, based on high research, development, production, and other costs associated with the drug. The firm's opponents accuse it of using an existing chemical compound, ample government research assistance, and a cooperative regulatory system to gain a monopoly on the only approved treatment available for people with AIDS. The case gives students the opportunity to explore the economics and regulation of the pharmaceutical industry, wrestle with the ethics of drug pricing, and analyze the formulation of public relations strategies on the part of both private companies and activist groups in the age of AIDS.

Authors :: Willis Emmons, Ashok Nimgade

Topics :: Global Business

Tags :: Ethics, Government, Pricing, Public relations, Research & development, Risk management, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "Burroughs Wellcome and AZT (A)" written by Willis Emmons, Ashok Nimgade includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Wellcome Azt facing as an external strategic factors. Some of the topics covered in Burroughs Wellcome and AZT (A) case study are - Strategic Management Strategies, Ethics, Government, Pricing, Public relations, Research & development, Risk management and Global Business.

Some of the macro environment factors that can be used to understand the Burroughs Wellcome and AZT (A) casestudy better are - – increasing government debt because of Covid-19 spendings, increasing commodity prices, increasing household debt because of falling income levels, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, technology disruption, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, etc

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Introduction to SWOT Analysis of Burroughs Wellcome and AZT (A)

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Burroughs Wellcome and AZT (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Wellcome Azt, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Wellcome Azt operates in.

According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Burroughs Wellcome and AZT (A) can be done for the following purposes –
1. Strategic planning using facts provided in Burroughs Wellcome and AZT (A) case study
2. Improving business portfolio management of Wellcome Azt
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Wellcome Azt

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Strengths Burroughs Wellcome and AZT (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Wellcome Azt in Burroughs Wellcome and AZT (A) Harvard Business Review case study are -

Low bargaining power of suppliers

– Suppliers of Wellcome Azt in the sector have low bargaining power. Burroughs Wellcome and AZT (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Wellcome Azt to manage not only supply disruptions but also source products at highly competitive prices.

Training and development

– Wellcome Azt has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Burroughs Wellcome and AZT (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.

High switching costs

– The high switching costs that Wellcome Azt has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.

Strong track record of project management

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

Learning organization

- Wellcome Azt 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 Wellcome Azt is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Burroughs Wellcome and AZT (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

Sustainable margins compare to other players in Global Business industry

– Burroughs Wellcome and AZT (A) firm has clearly differentiated products in the market place. This has enabled Wellcome Azt to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Wellcome Azt to invest into research and development (R&D) and innovation.

Successful track record of launching new products

– Wellcome Azt has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Wellcome Azt has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.

Diverse revenue streams

– Wellcome Azt is present in almost all the verticals within the industry. This has provided firm in Burroughs Wellcome and AZT (A) case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.

Cross disciplinary teams

– Horizontal connected teams at the Wellcome Azt 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.

Ability to recruit top talent

– Wellcome Azt is one of the leading recruiters in the industry. Managers in the Burroughs Wellcome and AZT (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.

Analytics focus

– Wellcome Azt 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 Willis Emmons, Ashok Nimgade 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.

Digital Transformation in Global Business segment

- digital transformation varies from industry to industry. For Wellcome Azt digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Wellcome Azt 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.

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Weaknesses Burroughs Wellcome and AZT (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Burroughs Wellcome and AZT (A) are -

High bargaining power of channel partners

– Because of the regulatory requirements, Willis Emmons, Ashok Nimgade suggests that, Wellcome Azt 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.

Employees’ incomplete understanding of strategy

– From the instances in the HBR case study Burroughs Wellcome and AZT (A), it seems that the employees of Wellcome Azt 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.

Skills based hiring

– The stress on hiring functional specialists at Wellcome Azt has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.

Workers concerns about automation

– As automation is fast increasing in the segment, Wellcome Azt needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.

Slow decision making process

– As mentioned earlier in the report, Wellcome Azt has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Wellcome Azt even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.

High cash cycle compare to competitors

Wellcome Azt 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.

Aligning sales with marketing

– It come across in the case study Burroughs Wellcome and AZT (A) that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Burroughs Wellcome and AZT (A) can leverage the sales team experience to cultivate customer relationships as Wellcome Azt is planning to shift buying processes online.

Interest costs

– Compare to the competition, Wellcome Azt 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.

High dependence on existing supply chain

– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Wellcome Azt supply chain. Even after few cautionary changes mentioned in the HBR case study - Burroughs Wellcome and AZT (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Wellcome Azt vulnerable to further global disruptions in South East Asia.

Need for greater diversity

– Wellcome Azt 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.

Compensation and incentives

– The revenue per employee as mentioned in the HBR case study Burroughs Wellcome and AZT (A), is just above the industry average. Wellcome Azt needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.

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Opportunities Burroughs Wellcome and AZT (A) | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities highlighted in the Harvard Business Review case study Burroughs Wellcome and AZT (A) are -

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Wellcome Azt can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Burroughs Wellcome and AZT (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Wellcome Azt can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Building a culture of innovation

– managers at Wellcome Azt can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Global Business segment.

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. Wellcome Azt 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. Wellcome Azt 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.

Developing new processes and practices

– Wellcome Azt 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.

Learning at scale

– Online learning technologies has now opened space for Wellcome Azt to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.

Creating value in data economy

– The success of analytics program of Wellcome Azt has opened avenues for new revenue streams for the organization in the industry. This can help Wellcome Azt to build a more holistic ecosystem as suggested in the Burroughs Wellcome and AZT (A) case study. Wellcome Azt can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.

Use of Bitcoin and other crypto currencies for transactions

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Wellcome Azt in the consumer business. Now Wellcome Azt can target international markets with far fewer capital restrictions requirements than the existing system.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Wellcome Azt is facing challenges because of the dominance of functional experts in the organization. Burroughs Wellcome and AZT (A) case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Loyalty marketing

– Wellcome Azt has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.

Remote work and new talent hiring opportunities

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

Better consumer reach

– The expansion of the 5G network will help Wellcome Azt to increase its market reach. Wellcome Azt will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.

Low interest rates

– Even though inflation is raising its head in most developed economies, Wellcome Azt 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.

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Threats Burroughs Wellcome and AZT (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats mentioned in the HBR case study Burroughs Wellcome and AZT (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. Wellcome Azt needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.

Technology acceleration in Forth Industrial Revolution

– Wellcome Azt has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Wellcome Azt needs to keep up with the evolution of technology in the Global Business sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.

New competition

– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Wellcome Azt in the Global Business sector and impact the bottomline of the organization.

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.

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 Wellcome Azt.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Wellcome Azt can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Burroughs Wellcome and AZT (A) .

Easy access to finance

– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Wellcome Azt can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Burroughs Wellcome and AZT (A), Wellcome Azt 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 .

Instability in the European markets

– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Wellcome Azt will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.

Environmental challenges

– Wellcome Azt needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Wellcome Azt can take advantage of this fund but it will also bring new competitors in the Global Business industry.

Increasing wage structure of Wellcome Azt

– 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 Wellcome Azt.

High dependence on third party suppliers

– Wellcome Azt high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.

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Weighted SWOT Analysis of Burroughs Wellcome and AZT (A) Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Burroughs Wellcome and AZT (A) needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants. We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –

First stage for doing weighted SWOT analysis of the case study Burroughs Wellcome and AZT (A) is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.

Second stage for conducting weighted SWOT analysis of the Harvard case study Burroughs Wellcome and AZT (A) is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.

Third stage of constructing weighted SWOT analysis of Burroughs Wellcome and AZT (A) is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Wellcome Azt needs to make to build a sustainable competitive advantage.

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