Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry
Since its introduction in 1983, Acutrim has been a major player in the U.S. appetite suppressant market and in the broader diet industry. This case focuses on the strategic, regulatory, marketing, and financial challenges this product and the rapidly changing diet industry pose for Ciba Consumer Pharmaceuticals as part of a large public corporation. Within this context, the case is intended to introduce students to the $33 billion diet industry and to elucidate some of the economic, cultural, and psychological factors that help shape the market for diet products, low-fat and health entrees, and a wide variety of foods in prosperous economies.
Swot Analysis of "Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry" written by Nancy F. Koehn, Rebecca Voorheis includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Diet Acutrim facing as an external strategic factors. Some of the topics covered in Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry case study are - Strategic Management Strategies, Customers, Government and Global Business.
Some of the macro environment factors that can be used to understand the Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry casestudy better are - – supply chains are disrupted by pandemic , technology disruption, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings,
there is backlash against globalization, increasing energy prices, etc
Introduction to SWOT Analysis of Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Diet Acutrim, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Diet Acutrim 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 Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry can be done for the following purposes –
1. Strategic planning using facts provided in Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry case study
2. Improving business portfolio management of Diet Acutrim
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 Diet Acutrim
Strengths Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Diet Acutrim in Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry Harvard Business Review case study are -
Strong track record of project management
– Diet Acutrim is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Diet Acutrim 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 Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Diet Acutrim 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.
Organizational Resilience of Diet Acutrim
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Diet Acutrim does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Diet Acutrim has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Effective Research and Development (R&D)
– Diet Acutrim 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 Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Diet Acutrim has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Diet Acutrim to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Diet Acutrim has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Diet Acutrim 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.
Superior customer experience
– The customer experience strategy of Diet Acutrim in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Global Business field
– Diet Acutrim 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 Diet Acutrim in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry 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.
Analytics focus
– Diet Acutrim 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 Nancy F. Koehn, Rebecca Voorheis 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.
Weaknesses Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry 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 Diet Acutrim has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Diet Acutrim is dominated by functional specialists. It is not different from other players in the Global Business segment. Diet Acutrim needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Diet Acutrim to focus more on services rather than just following the product oriented approach.
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 Diet Acutrim supply chain. Even after few cautionary changes mentioned in the HBR case study - Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Diet Acutrim vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry 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 Diet Acutrim 's lucrative customers.
Low market penetration in new markets
– Outside its home market of Diet Acutrim, firm in the HBR case study Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry 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 Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry can leverage the sales team experience to cultivate customer relationships as Diet Acutrim is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry HBR case study mentions - Diet Acutrim 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.
No frontier risks strategy
– After analyzing the HBR case study Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry, it seems that company is thinking about the frontier risks that can impact Global Business strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry, in the dynamic environment Diet Acutrim has struggled to respond to the nimble upstart competition. Diet Acutrim has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Diet Acutrim is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Nancy F. Koehn, Rebecca Voorheis suggests that, Diet Acutrim 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.
Opportunities Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry | 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 Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry are -
Using analytics as competitive advantage
– Diet Acutrim 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 Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Diet Acutrim 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 Diet Acutrim in the consumer business. Now Diet Acutrim can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Diet Acutrim 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 Diet Acutrim to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Diet Acutrim 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.
Loyalty marketing
– Diet Acutrim 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.
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. Diet Acutrim can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Diet Acutrim 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, Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Diet Acutrim 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.
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. Diet Acutrim can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Diet Acutrim can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Diet Acutrim to increase its market reach. Diet Acutrim 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Diet Acutrim can use these opportunities to build new business models that can help the communities that Diet Acutrim 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 Diet Acutrim 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.
Threats Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry are -
High dependence on third party suppliers
– Diet Acutrim 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.
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.
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. Diet Acutrim can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Diet Acutrim business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Diet Acutrim 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Diet Acutrim 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 Diet Acutrim is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Diet Acutrim has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Diet Acutrim 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.
Stagnating economy with rate increase
– Diet Acutrim 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.
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 Diet Acutrim.
Environmental challenges
– Diet Acutrim 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. Diet Acutrim can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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. Diet Acutrim 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.
Weighted SWOT Analysis of Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry 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 Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry 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 Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry 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 Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry 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 Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry 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 Diet Acutrim needs to make to build a sustainable competitive advantage.
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