Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Strategy / MBA Resources
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 - – cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies,
challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, 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 -
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.
Sustainable margins compare to other players in Global Business industry
– Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry firm has clearly differentiated products in the market place. This has enabled Diet Acutrim to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Diet Acutrim to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Diet Acutrim 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.
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.
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.
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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Diet Acutrim digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Diet Acutrim 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.
Learning organization
- Diet Acutrim 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 Diet Acutrim is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Diet Acutrim is present in almost all the verticals within the industry. This has provided firm in Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry 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.
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.
Innovation driven organization
– Diet Acutrim is one of the most innovative firm in sector. Manager in Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Diet Acutrim is one of the leading recruiters in the industry. Managers in the Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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 -
Capital Spending Reduction
– Even during the low interest decade, Diet Acutrim 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.
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.
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.
Interest costs
– Compare to the competition, Diet Acutrim 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.
Products dominated business model
– Even though Diet Acutrim 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 - Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry should strive to include more intangible value offerings along with its core products and services.
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.
Need for greater diversity
– Diet Acutrim 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.
Slow decision making process
– As mentioned earlier in the report, Diet Acutrim 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. Diet Acutrim 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry, is just above the industry average. Diet Acutrim 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry, it seems that the employees of Diet Acutrim 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 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.
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 -
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Diet Acutrim 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.
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.
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.
Leveraging digital technologies
– Diet Acutrim 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.
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.
Learning at scale
– Online learning technologies has now opened space for Diet Acutrim 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.
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.
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.
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.
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.
Developing new processes and practices
– Diet Acutrim 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.
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 -
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.
Consumer confidence and its impact on Diet Acutrim demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Ciba Consumer Pharmaceuticals' Acutrim: Challenges and Opportunities in Today's Diet Industry, Diet Acutrim 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.
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.
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.
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.
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.
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. Diet Acutrim needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
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.
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.
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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