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 - – increasing energy prices, there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, geopolitical disruptions,
central banks are concerned over increasing inflation, there is backlash against globalization, 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 -
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.
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.
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.
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.
High brand equity
– Novartis Berkeley has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Novartis Berkeley to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Novartis Berkeley 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 Novartis-U.C. Berkeley Research Collaboration - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Novartis Berkeley digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Novartis Berkeley 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.
Organizational Resilience of Novartis Berkeley
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Novartis Berkeley does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Novartis Berkeley has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Novartis Berkeley has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
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.
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.
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.
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 -
Slow to strategic competitive environment developments
– As Novartis-U.C. Berkeley Research Collaboration HBR case study mentions - Novartis Berkeley takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Novartis Berkeley is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Novartis-U.C. Berkeley Research Collaboration can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
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.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Margaret L. Eaton suggests that, Novartis Berkeley is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study 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.
Need for greater diversity
– Novartis Berkeley 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.
Skills based hiring
– The stress on hiring functional specialists at Novartis Berkeley 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.
No frontier risks strategy
– After analyzing the HBR case study Novartis-U.C. Berkeley Research Collaboration, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High 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 Novartis Berkeley supply chain. Even after few cautionary changes mentioned in the HBR case study - Novartis-U.C. Berkeley Research Collaboration, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Novartis Berkeley vulnerable to further global disruptions in South East Asia.
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 -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Novartis Berkeley is facing challenges because of the dominance of functional experts in the organization. Novartis-U.C. Berkeley Research Collaboration 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.
Developing new processes and practices
– Novartis Berkeley 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.
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. Novartis Berkeley 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. Novartis Berkeley 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Novartis Berkeley can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Novartis Berkeley 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 Novartis Berkeley to hire the very best people irrespective of their geographical location.
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.
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Novartis Berkeley can use these opportunities to build new business models that can help the communities that Novartis Berkeley operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Loyalty marketing
– Novartis Berkeley 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.
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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Novartis Berkeley to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
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 -
High dependence on third party suppliers
– Novartis Berkeley 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 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.
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.
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 .
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.
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 Novartis Berkeley.
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 .
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.
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.
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.
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.
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.
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.
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.