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 - – central banks are concerned over increasing inflation, increasing commodity prices, there is backlash against globalization, geopolitical disruptions, increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies,
supply chains are disrupted by pandemic , increasing household debt because of falling income levels, 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 -
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.
Low bargaining power of suppliers
– Suppliers of Sirtris Gsk's in the sector have low bargaining power. GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sirtris Gsk's to manage not only supply disruptions but also source products at highly competitive prices.
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.
Cross disciplinary teams
– Horizontal connected teams at the Sirtris Gsk's 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)
– 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.
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 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.
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.
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.
Superior customer experience
– The customer experience strategy of Sirtris Gsk's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Sirtris Gsk's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sirtris Gsk's 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.
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.
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 -
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study GSK's Acquisition of Sirtris: Independence or Integration? (Abridged), it seems that the employees of Sirtris Gsk's 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.
Need for greater diversity
– Sirtris Gsk's has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Sirtris Gsk's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Sirtris Gsk's 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 - GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) should strive to include more intangible value offerings along with its core products and services.
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.
Aligning sales with marketing
– It come across in the case study GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) 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 GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) can leverage the sales team experience to cultivate customer relationships as Sirtris Gsk's is planning to shift buying processes online.
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.
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.
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.
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 -
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Sirtris Gsk's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Sirtris Gsk's 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.
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.
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. Sirtris Gsk's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
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.
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.
Building a culture of innovation
– managers at Sirtris Gsk's 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.
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. Sirtris Gsk's 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. Sirtris Gsk's 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 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 -
Increasing wage structure of Sirtris Gsk's
– 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 Sirtris Gsk's.
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 Sirtris Gsk's.
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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study GSK's Acquisition of Sirtris: Independence or Integration? (Abridged), Sirtris Gsk's 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 .
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.
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. Sirtris Gsk's 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
– 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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sirtris Gsk's 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.
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.
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.