Michael Geranen and Joe Roberts forged a business relationship around a disruptive drug delivery technology that was developed by Dr. Cherng-ju Kim, a researcher and Professor at the University of Arkansas for Medical Sciences, College of Pharmacy. After an exclusive licensing agreement was negotiated with the University, EZRA Innovations, LLC began the long and arduous process of capitalizing on a flexible and low cost series of technologies that enabled EZRA to compete in the international pharmaceutical industry. EZRA reformulated drugs that were currently available in the marketplace that faced little or no competition, using drug delivery patents that EZRA had licensed. The aim was to become one of the first generic drug competitors to enter the market, and though competitive market entry put downward pressure on drug prices, maintaining what was referred to as premium-priced generics. While many drugs cost upwards of $100 million to develop and take 10 years or more, EZRA's business model offered an accelerated FDA pathway to market and the potential for exponential investor returns within 4-5 years. EZRA first needed to decide how much money to raise and then, how to craft an impactful message to acquire those funds. The challenge was to adequately allay investor fears around a complex business model while still knowing each drug they developed had to negotiate the complex world of FDA filing and approvals. Should their pro forma come to fruition, huge returns for the investors, and EZRA, were possible.
Swot Analysis of "EZRA Innovations, LLC" written by Joseph R. Bell, Joan Winn includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ezra Drug facing as an external strategic factors. Some of the topics covered in EZRA Innovations, LLC case study are - Strategic Management Strategies, Entrepreneurial finance, Leadership, Strategic planning, Technology and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the EZRA Innovations, LLC casestudy better are - – supply chains are disrupted by pandemic , geopolitical disruptions, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, increasing household debt because of falling income levels,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of EZRA Innovations, LLC
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in EZRA Innovations, LLC case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ezra Drug, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ezra Drug 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 EZRA Innovations, LLC can be done for the following purposes –
1. Strategic planning using facts provided in EZRA Innovations, LLC case study
2. Improving business portfolio management of Ezra Drug
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 Ezra Drug
Strengths EZRA Innovations, LLC | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ezra Drug in EZRA Innovations, LLC Harvard Business Review case study are -
Effective Research and Development (R&D)
– Ezra Drug 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 EZRA Innovations, LLC - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– EZRA Innovations, LLC firm has clearly differentiated products in the market place. This has enabled Ezra Drug to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Ezra Drug to invest into research and development (R&D) and innovation.
Organizational Resilience of Ezra Drug
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ezra Drug does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Ezra Drug 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 Joseph R. Bell, Joan Winn 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.
Ability to recruit top talent
– Ezra Drug is one of the leading recruiters in the industry. Managers in the EZRA Innovations, LLC are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the EZRA Innovations, LLC 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.
Superior customer experience
– The customer experience strategy of Ezra Drug in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Ezra Drug in the sector have low bargaining power. EZRA Innovations, LLC has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ezra Drug to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Ezra Drug is present in almost all the verticals within the industry. This has provided firm in EZRA Innovations, LLC 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.
Training and development
– Ezra Drug has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in EZRA Innovations, LLC Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Ezra Drug digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ezra Drug 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.
Highly skilled collaborators
– Ezra Drug 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 EZRA Innovations, LLC HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses EZRA Innovations, LLC | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of EZRA Innovations, LLC are -
Capital Spending Reduction
– Even during the low interest decade, Ezra Drug 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ezra Drug is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study EZRA Innovations, LLC can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Ezra Drug 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study EZRA Innovations, LLC, it seems that the employees of Ezra Drug 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.
High cash cycle compare to competitors
Ezra Drug 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the EZRA Innovations, LLC 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 Ezra Drug has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Ezra Drug 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 EZRA Innovations, LLC 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 Ezra Drug 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Ezra Drug 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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Ezra Drug supply chain. Even after few cautionary changes mentioned in the HBR case study - EZRA Innovations, LLC, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ezra Drug vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Ezra Drug is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Ezra Drug needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ezra Drug to focus more on services rather than just following the product oriented approach.
Opportunities EZRA Innovations, LLC | 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 EZRA Innovations, LLC are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ezra Drug 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.
Better consumer reach
– The expansion of the 5G network will help Ezra Drug to increase its market reach. Ezra Drug 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.
Building a culture of innovation
– managers at Ezra Drug 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ezra Drug 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, EZRA Innovations, LLC, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Ezra Drug 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ezra Drug 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.
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. Ezra Drug 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. Ezra Drug 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.
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 Ezra Drug in the consumer business. Now Ezra Drug can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ezra Drug can use these opportunities to build new business models that can help the communities that Ezra Drug operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Buying journey improvements
– Ezra Drug can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. EZRA Innovations, LLC 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, Ezra Drug is facing challenges because of the dominance of functional experts in the organization. EZRA Innovations, LLC 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.
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. Ezra Drug can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Ezra Drug 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.
Threats EZRA Innovations, LLC External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study EZRA Innovations, LLC are -
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 Ezra Drug business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Ezra Drug has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Ezra Drug 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ezra Drug with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Ezra Drug 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.
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. Ezra Drug 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.
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 Ezra Drug.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study EZRA Innovations, LLC, Ezra Drug 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 .
Shortening product life cycle
– it is one of the major threat that Ezra Drug is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Ezra Drug 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.
Increasing wage structure of Ezra Drug
– 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 Ezra Drug.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ezra Drug 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 EZRA Innovations, LLC .
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 Ezra Drug in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
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.
Weighted SWOT Analysis of EZRA Innovations, LLC 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 EZRA Innovations, LLC 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 EZRA Innovations, LLC 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 EZRA Innovations, LLC 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 EZRA Innovations, LLC 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 Ezra Drug needs to make to build a sustainable competitive advantage.