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 - – digital marketing is dominated by two big players Facebook and Google, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation,
technology disruption, competitive advantages are harder to sustain because of technology dispersion, 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 -
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.
Ability to lead change in Innovation & Entrepreneurship field
– Sirtris Gsk's 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 Sirtris Gsk's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
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.
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 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.
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.
Operational resilience
– The operational resilience strategy in the GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
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.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Sirtris Gsk's 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.
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.
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.
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.
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.
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.
Interest costs
– Compare to the competition, Sirtris Gsk's 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the GSK's Acquisition of Sirtris: Independence or Integration? (Abridged) 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 Sirtris Gsk's has relatively successful track record of launching new products.
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.
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 -
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.
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.
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.
Manufacturing automation
– Sirtris Gsk's 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.
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.
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.
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.
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 Sirtris Gsk's in the consumer business. Now Sirtris Gsk's can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Sirtris Gsk's 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Sirtris Gsk's 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, GSK's Acquisition of Sirtris: Independence or Integration? (Abridged), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
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 -
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.
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 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.
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.
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 Sirtris Gsk's in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
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 .
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.
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.
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.
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.
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.
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.
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.
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.
