Physician Sales and Service, Inc. (A): June 1992 SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Physician Sales and Service, Inc. (A): June 1992
A medical products distribution company faces strategic opportunities and challenges in a rapidly changing market. Physician Sales and Service (PSS), founded by Patrick Kelly in 1983, operates in 20 states in the United States and intends to expand to 50 states by 1997. By charging premium prices for high-quality service, training its sales representatives intensively, and professionalizing management, PSS has achieved above-average profit margins and, apparently successfully coped with the organizational challenges of rapid geographic concentration. But now, in 1992, PSS must cope with the uncertainties of Bill Clinton's impending election to the U.S. presidency and his promise of sweeping health care reform.
Swot Analysis of "Physician Sales and Service, Inc. (A): June 1992" written by Amar V. Bhide, Jay Dial includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Pss Physician facing as an external strategic factors. Some of the topics covered in Physician Sales and Service, Inc. (A): June 1992 case study are - Strategic Management Strategies, Growth strategy, Strategy execution and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Physician Sales and Service, Inc. (A): June 1992 casestudy better are - – increasing commodity prices, wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies,
cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Physician Sales and Service, Inc. (A): June 1992
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Physician Sales and Service, Inc. (A): June 1992 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Pss Physician, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Pss Physician 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 Physician Sales and Service, Inc. (A): June 1992 can be done for the following purposes –
1. Strategic planning using facts provided in Physician Sales and Service, Inc. (A): June 1992 case study
2. Improving business portfolio management of Pss Physician
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 Pss Physician
Strengths Physician Sales and Service, Inc. (A): June 1992 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Pss Physician in Physician Sales and Service, Inc. (A): June 1992 Harvard Business Review case study are -
Highly skilled collaborators
– Pss Physician 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 Physician Sales and Service, Inc. (A): June 1992 HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Innovation & Entrepreneurship field
– Pss Physician 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 Pss Physician in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Pss Physician is one of the most innovative firm in sector. Manager in Physician Sales and Service, Inc. (A): June 1992 Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Pss Physician is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Pss Physician is one of the leading recruiters in the industry. Managers in the Physician Sales and Service, Inc. (A): June 1992 are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Pss Physician has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Pss Physician to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Pss Physician 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 Pss Physician is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Physician Sales and Service, Inc. (A): June 1992 Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Pss Physician 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 Physician Sales and Service, Inc. (A): June 1992 - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Pss Physician 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 Amar V. Bhide, Jay Dial can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
High switching costs
– The high switching costs that Pss Physician 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.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Pss Physician digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Pss Physician 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.
Successful track record of launching new products
– Pss Physician has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Pss Physician 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.
Weaknesses Physician Sales and Service, Inc. (A): June 1992 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Physician Sales and Service, Inc. (A): June 1992 are -
Need for greater diversity
– Pss Physician 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 Physician Sales and Service, Inc. (A): June 1992, is just above the industry average. Pss Physician 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Pss Physician 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.
No frontier risks strategy
– After analyzing the HBR case study Physician Sales and Service, Inc. (A): June 1992, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Physician Sales and Service, Inc. (A): June 1992 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 Pss Physician has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Pss Physician 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.
Aligning sales with marketing
– It come across in the case study Physician Sales and Service, Inc. (A): June 1992 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 Physician Sales and Service, Inc. (A): June 1992 can leverage the sales team experience to cultivate customer relationships as Pss Physician is planning to shift buying processes online.
Lack of clear differentiation of Pss Physician products
– To increase the profitability and margins on the products, Pss Physician needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Pss Physician, firm in the HBR case study Physician Sales and Service, Inc. (A): June 1992 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 Physician Sales and Service, Inc. (A): June 1992 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 Pss Physician 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Pss Physician is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Pss Physician needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Pss Physician to focus more on services rather than just following the product oriented approach.
Opportunities Physician Sales and Service, Inc. (A): June 1992 | 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 Physician Sales and Service, Inc. (A): June 1992 are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Pss Physician can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Pss Physician has opened avenues for new revenue streams for the organization in the industry. This can help Pss Physician to build a more holistic ecosystem as suggested in the Physician Sales and Service, Inc. (A): June 1992 case study. Pss Physician can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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. Pss Physician 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 Pss Physician 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 Innovation & Entrepreneurship segment.
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 Pss Physician 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.
Developing new processes and practices
– Pss Physician can develop new processes and procedures in Innovation & Entrepreneurship 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.
Better consumer reach
– The expansion of the 5G network will help Pss Physician to increase its market reach. Pss Physician 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.
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. Pss Physician can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Pss Physician 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.
Leveraging digital technologies
– Pss Physician 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Pss Physician is facing challenges because of the dominance of functional experts in the organization. Physician Sales and Service, Inc. (A): June 1992 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.
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. Pss Physician 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. Pss Physician 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.
Manufacturing automation
– Pss Physician can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Threats Physician Sales and Service, Inc. (A): June 1992 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Physician Sales and Service, Inc. (A): June 1992 are -
Shortening product life cycle
– it is one of the major threat that Pss Physician is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Pss Physician can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Pss Physician in the Innovation & Entrepreneurship sector and impact the bottomline 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 Pss Physician.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Pss Physician 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.
Consumer confidence and its impact on Pss Physician 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.
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. Pss Physician 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
– Pss Physician 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. Pss Physician can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Technology acceleration in Forth Industrial Revolution
– Pss Physician has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Pss Physician 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.
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 Pss Physician business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Pss Physician
– 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 Pss Physician.
High dependence on third party suppliers
– Pss Physician 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.
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. Pss Physician needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Physician Sales and Service, Inc. (A): June 1992 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 Physician Sales and Service, Inc. (A): June 1992 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 Physician Sales and Service, Inc. (A): June 1992 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 Physician Sales and Service, Inc. (A): June 1992 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 Physician Sales and Service, Inc. (A): June 1992 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 Pss Physician needs to make to build a sustainable competitive advantage.