Starting with a small pilot centre in Hyderabad in 2010, a chain of quality dialysis centres had grown to 25 centres by mid-2014, with plans to expand to 100 by 2017. As they planned for this growth, the three co-founders had several questions with respect to NephroPlus's business model, partners, staff, systems, processes and culture playing on their minds. With the threat of competition looming large, they knew that they had to work hard to achieve both high quality and affordability as they continued with their fast-paced growth. S. Ramakrishna Velamuri is affiliated with Indian School of Business, Gachibowli.
Swot Analysis of "NephroPlus" written by S. Ramakrishna Velamuri, Geetika Shah includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Centres Nephroplus facing as an external strategic factors. Some of the topics covered in NephroPlus case study are - Strategic Management Strategies, Growth strategy and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the NephroPlus casestudy better are - – cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , increasing energy prices, there is backlash against globalization, central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing transportation and logistics costs, increasing household debt because of falling income levels, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in NephroPlus case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Centres Nephroplus, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Centres Nephroplus 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 NephroPlus can be done for the following purposes –
1. Strategic planning using facts provided in NephroPlus case study
2. Improving business portfolio management of Centres Nephroplus
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 Centres Nephroplus
Strengths NephroPlus | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Centres Nephroplus in NephroPlus Harvard Business Review case study are -
High brand equity
– Centres Nephroplus has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Centres Nephroplus to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Centres Nephroplus
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Centres Nephroplus does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Centres Nephroplus 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.
Diverse revenue streams
– Centres Nephroplus is present in almost all the verticals within the industry. This has provided firm in NephroPlus 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– NephroPlus firm has clearly differentiated products in the market place. This has enabled Centres Nephroplus to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Centres Nephroplus to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Centres Nephroplus in the sector have low bargaining power. NephroPlus has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Centres Nephroplus to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Centres Nephroplus is one of the most innovative firm in sector. Manager in NephroPlus 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
– Centres Nephroplus is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy in the NephroPlus 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.
Effective Research and Development (R&D)
– Centres Nephroplus 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 NephroPlus - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Centres Nephroplus 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 S. Ramakrishna Velamuri, Geetika Shah 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
- Centres Nephroplus 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 Centres Nephroplus is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in NephroPlus Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses NephroPlus | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of NephroPlus are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study NephroPlus, is just above the industry average. Centres Nephroplus 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.
Slow to strategic competitive environment developments
– As NephroPlus HBR case study mentions - Centres Nephroplus 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.
Lack of clear differentiation of Centres Nephroplus products
– To increase the profitability and margins on the products, Centres Nephroplus needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Centres Nephroplus is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study NephroPlus can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Centres Nephroplus, firm in the HBR case study NephroPlus needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Centres Nephroplus has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Slow decision making process
– As mentioned earlier in the report, Centres Nephroplus 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. Centres Nephroplus 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 Centres Nephroplus is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Centres Nephroplus needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Centres Nephroplus to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Centres Nephroplus has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High 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 Centres Nephroplus supply chain. Even after few cautionary changes mentioned in the HBR case study - NephroPlus, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Centres Nephroplus vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– After analyzing the HBR case study NephroPlus, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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.
Opportunities NephroPlus | 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 NephroPlus are -
Creating value in data economy
– The success of analytics program of Centres Nephroplus has opened avenues for new revenue streams for the organization in the industry. This can help Centres Nephroplus to build a more holistic ecosystem as suggested in the NephroPlus case study. Centres Nephroplus can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Centres Nephroplus 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Centres Nephroplus 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, NephroPlus, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Centres Nephroplus to increase its market reach. Centres Nephroplus 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.
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 Centres Nephroplus in the consumer business. Now Centres Nephroplus can target international markets with far fewer capital restrictions requirements than the existing system.
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 Centres Nephroplus 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.
Learning at scale
– Online learning technologies has now opened space for Centres Nephroplus 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.
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. Centres Nephroplus 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. Centres Nephroplus 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 Centres Nephroplus can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Centres Nephroplus 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.
Leveraging digital technologies
– Centres Nephroplus 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.
Manufacturing automation
– Centres Nephroplus can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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
– Centres Nephroplus can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. NephroPlus 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.
Threats NephroPlus External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study NephroPlus are -
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Centres Nephroplus business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Centres Nephroplus is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Centres Nephroplus 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.
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 Centres Nephroplus in the Leadership & Managing People 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 Centres Nephroplus 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.
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. Centres Nephroplus needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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. Centres Nephroplus can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Centres Nephroplus 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 NephroPlus .
Technology acceleration in Forth Industrial Revolution
– Centres Nephroplus has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Centres Nephroplus 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.
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. Centres Nephroplus 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
– Centres Nephroplus 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. Centres Nephroplus can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
High dependence on third party suppliers
– Centres Nephroplus 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 Centres Nephroplus
– 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 Centres Nephroplus.
Weighted SWOT Analysis of NephroPlus 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 NephroPlus 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 NephroPlus 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 NephroPlus 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 NephroPlus 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 Centres Nephroplus needs to make to build a sustainable competitive advantage.
