Case Study Description of The DiagnoFirst Opportunity
John Mason, a principle at Oldwell Partners, was facing a decision of whether or not to invest in DiagnoFirst, a molecular diagnostics firm. DiagnoFirst's key product was a genetic test that identified a subset of prostate cancer patients with a high risk of clinical progression and death. DiagnoFirst had applied for patents, in both the U.S. and EU, for the sequence of 40 genes, the new methodology for gene amplification, and the specific mechanics of the genetic tests. Mason's decision to invest in DiagnoFirst was based in part on the likelihood of obtaining patents and in part on the projected cash flows of the business under various scenarios. This case examines issues of intellectual property in science, international differences in patent law, and the decision-making process of venture capital in biotechnology deals.
Swot Analysis of "The DiagnoFirst Opportunity" written by Robert C. Pozen, Rukmini Balu includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Diagnofirst Genetic facing as an external strategic factors. Some of the topics covered in The DiagnoFirst Opportunity case study are - Strategic Management Strategies, Disruptive innovation, Intellectual property, Regulation, Venture capital and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the The DiagnoFirst Opportunity casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, increasing transportation and logistics costs, geopolitical disruptions, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings,
banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of The DiagnoFirst Opportunity
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The DiagnoFirst Opportunity case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Diagnofirst Genetic, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Diagnofirst Genetic 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 The DiagnoFirst Opportunity can be done for the following purposes –
1. Strategic planning using facts provided in The DiagnoFirst Opportunity case study
2. Improving business portfolio management of Diagnofirst Genetic
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Diagnofirst Genetic
Strengths The DiagnoFirst Opportunity | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Diagnofirst Genetic in The DiagnoFirst Opportunity Harvard Business Review case study are -
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Diagnofirst Genetic digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Diagnofirst Genetic has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Ability to recruit top talent
– Diagnofirst Genetic is one of the leading recruiters in the industry. Managers in the The DiagnoFirst Opportunity are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Diagnofirst Genetic 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 The DiagnoFirst Opportunity - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Diagnofirst Genetic 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 The DiagnoFirst Opportunity HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Leadership & Managing People field
– Diagnofirst Genetic is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Diagnofirst Genetic in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Leadership & Managing People industry
– The DiagnoFirst Opportunity firm has clearly differentiated products in the market place. This has enabled Diagnofirst Genetic to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Diagnofirst Genetic to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Diagnofirst Genetic is present in almost all the verticals within the industry. This has provided firm in The DiagnoFirst Opportunity 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.
High switching costs
– The high switching costs that Diagnofirst Genetic 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.
Successful track record of launching new products
– Diagnofirst Genetic has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Diagnofirst Genetic 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.
Cross disciplinary teams
– Horizontal connected teams at the Diagnofirst Genetic are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Superior customer experience
– The customer experience strategy of Diagnofirst Genetic in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Diagnofirst Genetic 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 Diagnofirst Genetic is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The DiagnoFirst Opportunity Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses The DiagnoFirst Opportunity | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The DiagnoFirst Opportunity are -
Slow to strategic competitive environment developments
– As The DiagnoFirst Opportunity HBR case study mentions - Diagnofirst Genetic 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.
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 Diagnofirst Genetic supply chain. Even after few cautionary changes mentioned in the HBR case study - The DiagnoFirst Opportunity, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Diagnofirst Genetic vulnerable to further global disruptions in South East Asia.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The DiagnoFirst Opportunity, it seems that the employees of Diagnofirst Genetic 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 The DiagnoFirst Opportunity 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 Diagnofirst Genetic 's lucrative customers.
High cash cycle compare to competitors
Diagnofirst Genetic 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.
Aligning sales with marketing
– It come across in the case study The DiagnoFirst Opportunity 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 The DiagnoFirst Opportunity can leverage the sales team experience to cultivate customer relationships as Diagnofirst Genetic is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Diagnofirst Genetic 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. Diagnofirst Genetic 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.
Increasing silos among functional specialists
– The organizational structure of Diagnofirst Genetic is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Diagnofirst Genetic needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Diagnofirst Genetic to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Diagnofirst Genetic products
– To increase the profitability and margins on the products, Diagnofirst Genetic needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Diagnofirst Genetic 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.
Interest costs
– Compare to the competition, Diagnofirst Genetic 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.
Opportunities The DiagnoFirst Opportunity | 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 The DiagnoFirst Opportunity are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Diagnofirst Genetic 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. Diagnofirst Genetic 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Diagnofirst Genetic 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 Diagnofirst Genetic to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Diagnofirst Genetic 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.
Learning at scale
– Online learning technologies has now opened space for Diagnofirst Genetic 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.
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. Diagnofirst Genetic can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Diagnofirst Genetic can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The DiagnoFirst Opportunity 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.
Developing new processes and practices
– Diagnofirst Genetic can develop new processes and procedures in Leadership & Managing People 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Diagnofirst Genetic in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– Diagnofirst Genetic 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 The DiagnoFirst Opportunity - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Diagnofirst Genetic to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Diagnofirst Genetic 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, Diagnofirst Genetic can use these opportunities to build new business models that can help the communities that Diagnofirst Genetic operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Leveraging digital technologies
– Diagnofirst Genetic 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Diagnofirst Genetic can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats The DiagnoFirst Opportunity External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The DiagnoFirst Opportunity are -
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 Diagnofirst Genetic in the Leadership & Managing People sector and impact the bottomline of the organization.
Consumer confidence and its impact on Diagnofirst Genetic 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.
Regulatory challenges
– Diagnofirst Genetic 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 Leadership & Managing People industry regulations.
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.
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. Diagnofirst Genetic 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.
Environmental challenges
– Diagnofirst Genetic 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. Diagnofirst Genetic can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Stagnating economy with rate increase
– Diagnofirst Genetic 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.
Technology acceleration in Forth Industrial Revolution
– Diagnofirst Genetic has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Diagnofirst Genetic needs to keep up with the evolution of technology in the Leadership & Managing People 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Diagnofirst Genetic in the Leadership & Managing People industry. The Leadership & Managing People 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.
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 Diagnofirst Genetic.
Increasing wage structure of Diagnofirst Genetic
– 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 Diagnofirst Genetic.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Diagnofirst Genetic can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Diagnofirst Genetic business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of The DiagnoFirst Opportunity 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 The DiagnoFirst Opportunity 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 The DiagnoFirst Opportunity 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 The DiagnoFirst Opportunity 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 The DiagnoFirst Opportunity 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 Diagnofirst Genetic needs to make to build a sustainable competitive advantage.
