Case Study Description of Novartis-U.C. Berkeley Research Collaboration
In November 1998, Steven Briggs was appointed CEO of the Novartis Agricultural Discovery Institute, Inc. (NADII), a new research institute created under the corporate umbrella of Novartis AG. NADII had a mandate to jump-start Novartis's basic research program in plant genomics, and Briggs was considering the latest research proposal terms offered by the University of California, Berkeley (UC Berkeley). Novartis was the finalist in an auction launched by the university in April 1998 to find a corporate partner with which it could establish a broad plant genomics research alliance. The arrangement was unprecedented and required a great deal of trust on the part of Novartis--trust that the Berkeley faculty could produce useful discoveries for the company's fledgling plant genomics initiative. On the surface it appeared that recent advances in the cost-intensive field of life sciences, combined with heated competition in the industry for leadership in biotechnology, had aligned the interests of the university and Novartis. Briggs was ready to approve the proposal. Before putting pen to paper, however, he considered the forces that had led to the historic agreement between Novartis and UC Berkeley, research findings, his firm's strategic choices, and academia's contribution to new discoveries.
Swot Analysis of "Novartis-U.C. Berkeley Research Collaboration" written by Margaret L. Eaton includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Novartis Berkeley facing as an external strategic factors. Some of the topics covered in Novartis-U.C. Berkeley Research Collaboration case study are - Strategic Management Strategies, Ethics, Joint ventures, Social enterprise and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Novartis-U.C. Berkeley Research Collaboration casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, there is backlash against globalization, increasing commodity prices, increasing energy prices, wage bills are increasing, there is increasing trade war between United States & China,
cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Novartis-U.C. Berkeley Research Collaboration
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Novartis-U.C. Berkeley Research Collaboration case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Novartis Berkeley, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Novartis Berkeley 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 Novartis-U.C. Berkeley Research Collaboration can be done for the following purposes –
1. Strategic planning using facts provided in Novartis-U.C. Berkeley Research Collaboration case study
2. Improving business portfolio management of Novartis Berkeley
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 Novartis Berkeley
Strengths Novartis-U.C. Berkeley Research Collaboration | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Novartis Berkeley in Novartis-U.C. Berkeley Research Collaboration Harvard Business Review case study are -
Learning organization
- Novartis Berkeley 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 Novartis Berkeley is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Novartis-U.C. Berkeley Research Collaboration Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the Novartis-U.C. Berkeley Research Collaboration 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.
Low bargaining power of suppliers
– Suppliers of Novartis Berkeley in the sector have low bargaining power. Novartis-U.C. Berkeley Research Collaboration has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Novartis Berkeley to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Novartis-U.C. Berkeley Research Collaboration firm has clearly differentiated products in the market place. This has enabled Novartis Berkeley to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Novartis Berkeley to invest into research and development (R&D) and innovation.
Innovation driven organization
– Novartis Berkeley is one of the most innovative firm in sector. Manager in Novartis-U.C. Berkeley Research Collaboration Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Novartis Berkeley 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 Margaret L. Eaton can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Strong track record of project management
– Novartis Berkeley is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Novartis Berkeley 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.
Training and development
– Novartis Berkeley has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Novartis-U.C. Berkeley Research Collaboration 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.
Superior customer experience
– The customer experience strategy of Novartis Berkeley in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Novartis Berkeley is present in almost all the verticals within the industry. This has provided firm in Novartis-U.C. Berkeley Research Collaboration 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.
Highly skilled collaborators
– Novartis Berkeley 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 Novartis-U.C. Berkeley Research Collaboration HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Novartis-U.C. Berkeley Research Collaboration | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Novartis-U.C. Berkeley Research Collaboration are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Novartis-U.C. Berkeley Research Collaboration 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 Novartis Berkeley has relatively successful track record of launching new products.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Novartis-U.C. Berkeley Research Collaboration, it seems that the employees of Novartis Berkeley 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.
Capital Spending Reduction
– Even during the low interest decade, Novartis Berkeley 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 Novartis-U.C. Berkeley Research Collaboration, is just above the industry average. Novartis Berkeley 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Novartis-U.C. Berkeley Research Collaboration, in the dynamic environment Novartis Berkeley has struggled to respond to the nimble upstart competition. Novartis Berkeley has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– It come across in the case study Novartis-U.C. Berkeley Research Collaboration 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 Novartis-U.C. Berkeley Research Collaboration can leverage the sales team experience to cultivate customer relationships as Novartis Berkeley is planning to shift buying processes online.
High cash cycle compare to competitors
Novartis Berkeley 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 operating costs
– Compare to the competitors, firm in the HBR case study Novartis-U.C. Berkeley Research Collaboration 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 Novartis Berkeley 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Novartis Berkeley is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Novartis Berkeley needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Novartis Berkeley to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Novartis Berkeley 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.
Low market penetration in new markets
– Outside its home market of Novartis Berkeley, firm in the HBR case study Novartis-U.C. Berkeley Research Collaboration needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Novartis-U.C. Berkeley Research Collaboration | 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 Novartis-U.C. Berkeley Research Collaboration are -
Learning at scale
– Online learning technologies has now opened space for Novartis Berkeley 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
– Novartis Berkeley 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 Novartis-U.C. Berkeley Research Collaboration - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Novartis Berkeley to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Novartis Berkeley to increase its market reach. Novartis Berkeley 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Novartis Berkeley 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, Novartis-U.C. Berkeley Research Collaboration, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Novartis Berkeley can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Novartis Berkeley 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Novartis Berkeley 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.
Creating value in data economy
– The success of analytics program of Novartis Berkeley has opened avenues for new revenue streams for the organization in the industry. This can help Novartis Berkeley to build a more holistic ecosystem as suggested in the Novartis-U.C. Berkeley Research Collaboration case study. Novartis Berkeley can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Novartis Berkeley 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.
Buying journey improvements
– Novartis Berkeley can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Novartis-U.C. Berkeley Research Collaboration 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Novartis Berkeley 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.
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 Novartis Berkeley in the consumer business. Now Novartis Berkeley can target international markets with far fewer capital restrictions requirements than the existing system.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Novartis Berkeley can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Novartis-U.C. Berkeley Research Collaboration External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Novartis-U.C. Berkeley Research Collaboration are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Novartis Berkeley with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Novartis Berkeley 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.
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.
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 Novartis Berkeley in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Novartis Berkeley 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 Novartis-U.C. Berkeley Research Collaboration .
Regulatory challenges
– Novartis Berkeley 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.
Environmental challenges
– Novartis Berkeley 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. Novartis Berkeley can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
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. Novartis Berkeley needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Novartis Berkeley has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Novartis Berkeley 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. Novartis Berkeley 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.
Increasing wage structure of Novartis Berkeley
– 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 Novartis Berkeley.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Novartis Berkeley 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Novartis-U.C. Berkeley Research Collaboration, Novartis Berkeley 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 .
Weighted SWOT Analysis of Novartis-U.C. Berkeley Research Collaboration 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 Novartis-U.C. Berkeley Research Collaboration 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 Novartis-U.C. Berkeley Research Collaboration 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 Novartis-U.C. Berkeley Research Collaboration 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 Novartis-U.C. Berkeley Research Collaboration 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 Novartis Berkeley needs to make to build a sustainable competitive advantage.