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 - – digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings,
competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, 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 -
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Ability to recruit top talent
– Novartis Berkeley is one of the leading recruiters in the industry. Managers in the Novartis-U.C. Berkeley Research Collaboration are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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 -
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Novartis Berkeley 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 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.
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.
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.
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.
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 decision making process
– As mentioned earlier in the report, Novartis Berkeley 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. Novartis Berkeley 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.
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.
Products dominated business model
– Even though Novartis Berkeley has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Novartis-U.C. Berkeley Research Collaboration should strive to include more intangible value offerings along with its core products and services.
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.
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 -
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 -
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.
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 .
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 .
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.
Shortening product life cycle
– it is one of the major threat that Novartis Berkeley is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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 Novartis Berkeley business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
Consumer confidence and its impact on Novartis Berkeley demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
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.
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.
