Case Study Description of Targanta Therapeutics: Hitting a Moving Target
This case explores regulatory, product testing, and business strategy at Targanta Therapeutics, a biotech company preparing its first new drug application to the FDA. In October 2007, Mark Leuchtenberger, president and CEO of Targanta - which has just held a successful IPO - weighs options for the approximately ten month review period after the company submits to the Food and Drug Administration. The case reviews Targanta's origins and "de-risking" of oritavancin, an antibiotic therapy for drug-resistant infections that was first invented at Eli Lilly and then spun out to InterMune before Targanta acquired it in late 2005. To highlight the impact of regulatory policy on business strategy the case then describes a set of choices facing the firm, including staffing a marketing and sales group, carrying out additional clinical testing to expand the approved indications, applying for European market approval, or keeping funds in reserve in the event that the FDA requests further data.
Swot Analysis of "Targanta Therapeutics: Hitting a Moving Target" written by Arthur A. Daemmrich includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Targanta Therapeutics facing as an external strategic factors. Some of the topics covered in Targanta Therapeutics: Hitting a Moving Target case study are - Strategic Management Strategies, Entrepreneurial management, Government, Health, International business, Managing organizations, Product development, Risk management and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Targanta Therapeutics: Hitting a Moving Target casestudy better are - – there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, technology disruption, increasing transportation and logistics costs, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google,
geopolitical disruptions, there is backlash against globalization, etc
Introduction to SWOT Analysis of Targanta Therapeutics: Hitting a Moving Target
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Targanta Therapeutics: Hitting a Moving Target case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Targanta Therapeutics, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Targanta Therapeutics 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 Targanta Therapeutics: Hitting a Moving Target can be done for the following purposes –
1. Strategic planning using facts provided in Targanta Therapeutics: Hitting a Moving Target case study
2. Improving business portfolio management of Targanta Therapeutics
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Targanta Therapeutics
Strengths Targanta Therapeutics: Hitting a Moving Target | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Targanta Therapeutics in Targanta Therapeutics: Hitting a Moving Target Harvard Business Review case study are -
Highly skilled collaborators
– Targanta Therapeutics 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 Targanta Therapeutics: Hitting a Moving Target HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Targanta Therapeutics: Hitting a Moving Target firm has clearly differentiated products in the market place. This has enabled Targanta Therapeutics to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Targanta Therapeutics to invest into research and development (R&D) and innovation.
Strong track record of project management
– Targanta Therapeutics is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Targanta Therapeutics has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Targanta Therapeutics: Hitting a Moving Target 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)
– Targanta Therapeutics 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 Targanta Therapeutics: Hitting a Moving Target - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Targanta Therapeutics 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 Targanta Therapeutics in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Targanta Therapeutics is one of the leading recruiters in the industry. Managers in the Targanta Therapeutics: Hitting a Moving Target are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Targanta Therapeutics has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Targanta Therapeutics 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.
Organizational Resilience of Targanta Therapeutics
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Targanta Therapeutics does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Targanta Therapeutics has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Targanta Therapeutics to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Targanta Therapeutics 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.
Weaknesses Targanta Therapeutics: Hitting a Moving Target | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Targanta Therapeutics: Hitting a Moving Target are -
Interest costs
– Compare to the competition, Targanta Therapeutics 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.
Increasing silos among functional specialists
– The organizational structure of Targanta Therapeutics is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Targanta Therapeutics needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Targanta Therapeutics to focus more on services rather than just following the product oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Targanta Therapeutics: Hitting a Moving Target, it seems that the employees of Targanta Therapeutics 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.
Slow to strategic competitive environment developments
– As Targanta Therapeutics: Hitting a Moving Target HBR case study mentions - Targanta Therapeutics 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.
Skills based hiring
– The stress on hiring functional specialists at Targanta Therapeutics 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.
Low market penetration in new markets
– Outside its home market of Targanta Therapeutics, firm in the HBR case study Targanta Therapeutics: Hitting a Moving Target needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, firm in the HBR case study Targanta Therapeutics: Hitting a Moving Target 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 Targanta Therapeutics 's lucrative customers.
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 Targanta Therapeutics supply chain. Even after few cautionary changes mentioned in the HBR case study - Targanta Therapeutics: Hitting a Moving Target, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Targanta Therapeutics vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Targanta Therapeutics 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.
Aligning sales with marketing
– It come across in the case study Targanta Therapeutics: Hitting a Moving Target 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 Targanta Therapeutics: Hitting a Moving Target can leverage the sales team experience to cultivate customer relationships as Targanta Therapeutics is planning to shift buying processes online.
Lack of clear differentiation of Targanta Therapeutics products
– To increase the profitability and margins on the products, Targanta Therapeutics needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Targanta Therapeutics: Hitting a Moving Target | 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 Targanta Therapeutics: Hitting a Moving Target are -
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 Targanta Therapeutics to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Targanta Therapeutics can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Targanta Therapeutics 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. Targanta Therapeutics 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Targanta Therapeutics 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 Targanta Therapeutics to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Targanta Therapeutics 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.
Creating value in data economy
– The success of analytics program of Targanta Therapeutics has opened avenues for new revenue streams for the organization in the industry. This can help Targanta Therapeutics to build a more holistic ecosystem as suggested in the Targanta Therapeutics: Hitting a Moving Target case study. Targanta Therapeutics can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Targanta Therapeutics can use these opportunities to build new business models that can help the communities that Targanta Therapeutics operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Leveraging digital technologies
– Targanta Therapeutics 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 Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Targanta Therapeutics can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Targanta Therapeutics 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Targanta Therapeutics 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Targanta Therapeutics 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, Targanta Therapeutics: Hitting a Moving Target, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Targanta Therapeutics is facing challenges because of the dominance of functional experts in the organization. Targanta Therapeutics: Hitting a Moving Target case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats Targanta Therapeutics: Hitting a Moving Target External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Targanta Therapeutics: Hitting a Moving Target are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Targanta Therapeutics in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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.
Stagnating economy with rate increase
– Targanta Therapeutics 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.
Regulatory challenges
– Targanta Therapeutics 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 Innovation & Entrepreneurship industry regulations.
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 Targanta Therapeutics in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Environmental challenges
– Targanta Therapeutics 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. Targanta Therapeutics can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Targanta Therapeutics 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 Targanta Therapeutics: Hitting a Moving Target .
Technology acceleration in Forth Industrial Revolution
– Targanta Therapeutics has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Targanta Therapeutics needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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 Targanta Therapeutics: Hitting a Moving Target, Targanta Therapeutics may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
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 Targanta Therapeutics.
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Targanta Therapeutics can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
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 Targanta Therapeutics business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Targanta Therapeutics
– 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 Targanta Therapeutics.
Weighted SWOT Analysis of Targanta Therapeutics: Hitting a Moving Target 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 Targanta Therapeutics: Hitting a Moving Target 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 Targanta Therapeutics: Hitting a Moving Target 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 Targanta Therapeutics: Hitting a Moving Target 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 Targanta Therapeutics: Hitting a Moving Target 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 Targanta Therapeutics needs to make to build a sustainable competitive advantage.