Express Scripts: Promoting Prescription Drug Home Delivery (B) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Communication
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Express Scripts: Promoting Prescription Drug Home Delivery (B)
The pharmacy benefit manager (PBM) sector processes prescription drug claims on behalf of companies that offer a prescription drug benefit to their employees. This case follows Bob Nease, Chief Scientist at Express Scripts, as he considers methods to promote home delivery of prescription drugs by mail-a process proven to lower prescription fill error rates, increase cost savings, and improve medication adherence.
Authors :: John Beshears, Patrick Rooney, Jenny Sanford
Swot Analysis of "Express Scripts: Promoting Prescription Drug Home Delivery (B)" written by John Beshears, Patrick Rooney, Jenny Sanford includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Prescription Scripts facing as an external strategic factors. Some of the topics covered in Express Scripts: Promoting Prescription Drug Home Delivery (B) case study are - Strategic Management Strategies, Compensation, Decision making, Personnel policies, Supply chain and Communication.
Some of the macro environment factors that can be used to understand the Express Scripts: Promoting Prescription Drug Home Delivery (B) casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation,
increasing energy prices, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Express Scripts: Promoting Prescription Drug Home Delivery (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Express Scripts: Promoting Prescription Drug Home Delivery (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Prescription Scripts, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Prescription Scripts 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 Express Scripts: Promoting Prescription Drug Home Delivery (B) can be done for the following purposes –
1. Strategic planning using facts provided in Express Scripts: Promoting Prescription Drug Home Delivery (B) case study
2. Improving business portfolio management of Prescription Scripts
3. Assessing feasibility of the new initiative in Communication field.
4. Making a Communication topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Prescription Scripts
Strengths Express Scripts: Promoting Prescription Drug Home Delivery (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Prescription Scripts in Express Scripts: Promoting Prescription Drug Home Delivery (B) Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Prescription Scripts in the sector have low bargaining power. Express Scripts: Promoting Prescription Drug Home Delivery (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Prescription Scripts to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Prescription Scripts 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 Prescription Scripts is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Express Scripts: Promoting Prescription Drug Home Delivery (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Prescription Scripts 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.
Effective Research and Development (R&D)
– Prescription Scripts 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 Express Scripts: Promoting Prescription Drug Home Delivery (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Prescription Scripts 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 Express Scripts: Promoting Prescription Drug Home Delivery (B) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Prescription Scripts
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Prescription Scripts does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Prescription Scripts is one of the most innovative firm in sector. Manager in Express Scripts: Promoting Prescription Drug Home Delivery (B) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Communication segment
- digital transformation varies from industry to industry. For Prescription Scripts digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Prescription Scripts 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.
Analytics focus
– Prescription Scripts 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 John Beshears, Patrick Rooney, Jenny Sanford 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.
Strong track record of project management
– Prescription Scripts is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Prescription Scripts has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Prescription Scripts has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Diverse revenue streams
– Prescription Scripts is present in almost all the verticals within the industry. This has provided firm in Express Scripts: Promoting Prescription Drug Home Delivery (B) 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.
Weaknesses Express Scripts: Promoting Prescription Drug Home Delivery (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Express Scripts: Promoting Prescription Drug Home Delivery (B) are -
Low market penetration in new markets
– Outside its home market of Prescription Scripts, firm in the HBR case study Express Scripts: Promoting Prescription Drug Home Delivery (B) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Express Scripts: Promoting Prescription Drug Home Delivery (B) 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 Express Scripts: Promoting Prescription Drug Home Delivery (B) can leverage the sales team experience to cultivate customer relationships as Prescription Scripts is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Prescription Scripts 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Express Scripts: Promoting Prescription Drug Home Delivery (B) 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 Prescription Scripts 's lucrative customers.
High bargaining power of channel partners
– Because of the regulatory requirements, John Beshears, Patrick Rooney, Jenny Sanford suggests that, Prescription Scripts 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.
Slow decision making process
– As mentioned earlier in the report, Prescription Scripts 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. Prescription Scripts 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.
Increasing silos among functional specialists
– The organizational structure of Prescription Scripts is dominated by functional specialists. It is not different from other players in the Communication segment. Prescription Scripts needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Prescription Scripts to focus more on services rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Prescription Scripts 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.
Interest costs
– Compare to the competition, Prescription Scripts 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 Prescription Scripts 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 - Express Scripts: Promoting Prescription Drug Home Delivery (B) should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As Express Scripts: Promoting Prescription Drug Home Delivery (B) HBR case study mentions - Prescription Scripts 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.
Opportunities Express Scripts: Promoting Prescription Drug Home Delivery (B) | 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 Express Scripts: Promoting Prescription Drug Home Delivery (B) are -
Buying journey improvements
– Prescription Scripts can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Express Scripts: Promoting Prescription Drug Home Delivery (B) suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Prescription Scripts is facing challenges because of the dominance of functional experts in the organization. Express Scripts: Promoting Prescription Drug Home Delivery (B) 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.
Manufacturing automation
– Prescription Scripts can use the latest technology developments to improve its manufacturing and designing process in Communication 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Prescription Scripts in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Communication 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 Communication industry, but it has also influenced the consumer preferences. Prescription Scripts can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Prescription Scripts 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, Express Scripts: Promoting Prescription Drug Home Delivery (B), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Prescription Scripts 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 Communication segment.
Creating value in data economy
– The success of analytics program of Prescription Scripts has opened avenues for new revenue streams for the organization in the industry. This can help Prescription Scripts to build a more holistic ecosystem as suggested in the Express Scripts: Promoting Prescription Drug Home Delivery (B) case study. Prescription Scripts can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Prescription Scripts in the consumer business. Now Prescription Scripts can target international markets with far fewer capital restrictions requirements than the existing system.
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. Prescription Scripts can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Prescription Scripts 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.
Learning at scale
– Online learning technologies has now opened space for Prescription Scripts 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Communication industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Prescription Scripts 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. Prescription Scripts 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.
Threats Express Scripts: Promoting Prescription Drug Home Delivery (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Express Scripts: Promoting Prescription Drug Home Delivery (B) are -
Increasing wage structure of Prescription Scripts
– 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 Prescription Scripts.
Environmental challenges
– Prescription Scripts 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. Prescription Scripts can take advantage of this fund but it will also bring new competitors in the Communication industry.
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 Prescription Scripts business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
Stagnating economy with rate increase
– Prescription Scripts 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 Prescription Scripts.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Prescription Scripts with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Easy access to finance
– Easy access to finance in Communication field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Prescription Scripts can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Prescription Scripts has witnessed rapid integration of technology during Covid-19 in the Communication industry. As one of the leading players in the industry, Prescription Scripts needs to keep up with the evolution of technology in the Communication 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.
High dependence on third party suppliers
– Prescription Scripts 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.
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. Prescription Scripts 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.
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 Prescription Scripts in the Communication sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Express Scripts: Promoting Prescription Drug Home Delivery (B) 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 Express Scripts: Promoting Prescription Drug Home Delivery (B) 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 Express Scripts: Promoting Prescription Drug Home Delivery (B) 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 Express Scripts: Promoting Prescription Drug Home Delivery (B) 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 Express Scripts: Promoting Prescription Drug Home Delivery (B) 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 Prescription Scripts needs to make to build a sustainable competitive advantage.
