GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of GSK's Acquisition of Sirtris: Independence or Integration? (Abridged)
An executive from pharmaceutical company GSK must choose how much to integrate a recently acquired biotechnology firm, Sirtris. Moncef Slaoui, GSK's global head of R&D, championed the acquisition of Sirtris to gain access to its potentially revolutionary science. Slaoui must balance the need to recoup shareholder value after paying a two-times premium for Sirtris with his desire to retain Christoph Westphal, Sirtris's co-founder and CEO, and other key individuals at the company. His desire to protect Sirtris from GSK's size and bureaucracy occurs in a period when GSK has launched major changes in its R&D organization, which focus on decentralizing and externalizing R&D, as well as revamping the resource allocation process to parallel more of a venture capital-based model. The case also explores the views of Christoph Westphal on the early challenges of the integration and the impact GSK was having on Sirtris. Can be used in conjunction with a separate case that focuses on Sirtris's business model.
Swot Analysis of "GSK's Acquisition of Sirtris: Independence or Integration? (Abridged)" written by Toby Stuart, James Weber includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Sirtris Gsk's facing as an external strategic factors. Some of the topics covered in GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) case study are - Strategic Management Strategies, Entrepreneurship, Mergers & acquisitions, Organizational culture, Organizational structure, Research & development and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) casestudy better are - – talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, technology disruption,
increasing government debt because of Covid-19 spendings, increasing commodity prices, etc
Introduction to SWOT Analysis of GSK's Acquisition of Sirtris: Independence or Integration? (Abridged)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sirtris Gsk's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sirtris Gsk's 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 GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) can be done for the following purposes –
1. Strategic planning using facts provided in GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) case study
2. Improving business portfolio management of Sirtris Gsk's
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 Sirtris Gsk's
Strengths GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sirtris Gsk's in GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) Harvard Business Review case study are -
Organizational Resilience of Sirtris Gsk's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Sirtris Gsk's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Sirtris Gsk's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sirtris Gsk's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Sirtris Gsk's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sirtris Gsk's 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.
Strong track record of project management
– Sirtris Gsk's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Sirtris Gsk's 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 GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) - 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
– Sirtris Gsk's 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 GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Sirtris Gsk's is one of the most innovative firm in sector. Manager in GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Sirtris Gsk's 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 Sirtris Gsk's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Sirtris Gsk's 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.
Diverse revenue streams
– Sirtris Gsk's is present in almost all the verticals within the industry. This has provided firm in GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) 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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) firm has clearly differentiated products in the market place. This has enabled Sirtris Gsk's to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Sirtris Gsk's to invest into research and development (R&D) and innovation.
Analytics focus
– Sirtris Gsk's 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 Toby Stuart, James Weber can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Weaknesses GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) are -
No frontier risks strategy
– After analyzing the HBR case study GSK's Acquisition of Sirtris: Independence or Integration? (Abridged), 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 cash cycle compare to competitors
Sirtris Gsk's has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High bargaining power of channel partners
– Because of the regulatory requirements, Toby Stuart, James Weber suggests that, Sirtris Gsk's 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study GSK's Acquisition of Sirtris: Independence or Integration? (Abridged), in the dynamic environment Sirtris Gsk's has struggled to respond to the nimble upstart competition. Sirtris Gsk's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Sirtris Gsk's is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Sirtris Gsk's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sirtris Gsk's to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Sirtris Gsk's 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study GSK's Acquisition of Sirtris: Independence or Integration? (Abridged), is just above the industry average. Sirtris Gsk's 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.
Lack of clear differentiation of Sirtris Gsk's products
– To increase the profitability and margins on the products, Sirtris Gsk's needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Sirtris Gsk's 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. Sirtris Gsk's 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.
Slow to strategic competitive environment developments
– As GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) HBR case study mentions - Sirtris Gsk's 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.
High operating costs
– Compare to the competitors, firm in the HBR case study GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) 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 Sirtris Gsk's 's lucrative customers.
Opportunities GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) | 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 GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) are -
Learning at scale
– Online learning technologies has now opened space for Sirtris Gsk's 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.
Using analytics as competitive advantage
– Sirtris Gsk's has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Sirtris Gsk's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Sirtris Gsk's 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Sirtris Gsk's 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 Sirtris Gsk's 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.
Leveraging digital technologies
– Sirtris Gsk's 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sirtris Gsk's 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 Sirtris Gsk's to hire the very best people irrespective of their geographical location.
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. Sirtris Gsk's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Sirtris Gsk's is facing challenges because of the dominance of functional experts in the organization. GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) 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.
Buying journey improvements
– Sirtris Gsk's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) 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.
Creating value in data economy
– The success of analytics program of Sirtris Gsk's has opened avenues for new revenue streams for the organization in the industry. This can help Sirtris Gsk's to build a more holistic ecosystem as suggested in the GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) case study. Sirtris Gsk's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Sirtris Gsk's to increase its market reach. Sirtris Gsk's will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sirtris Gsk's can use these opportunities to build new business models that can help the communities that Sirtris Gsk's operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Threats GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) are -
Environmental challenges
– Sirtris Gsk's 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. Sirtris Gsk's can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship 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 Sirtris Gsk's business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Sirtris Gsk's 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.
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. Sirtris Gsk's needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Sirtris Gsk's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Sirtris Gsk's 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.
Regulatory challenges
– Sirtris Gsk's 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.
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. Sirtris Gsk's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sirtris Gsk's 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 GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) .
Consumer confidence and its impact on Sirtris Gsk's 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.
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.
Shortening product life cycle
– it is one of the major threat that Sirtris Gsk's is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Sirtris Gsk's has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Sirtris Gsk's 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.
Weighted SWOT Analysis of GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) 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 GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) 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 GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) 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 GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) 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 GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) 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 Sirtris Gsk's needs to make to build a sustainable competitive advantage.
