Case Study Description of Rx Depot: Importing Drugs from Canada
In 2002, a handful of entrepreneurs began to ship drugs from Canada into the United States, taking advantage of regulatory and price differentials across the neighboring countries. Using the Internet and a low-cost network of Canadian pharmacies, firms like Rx Depot allowed U.S. customers to order their prescription medications in the United States, purchase them at a substantial discount from prevailing U.S. prices, and deliver the medications directly to their homes. It was a powerful business model that made Rx Depot a prominent player. In November 2003, however, a U.S. court decreed that Rx Depot violated federal law. The company was forced to close, but its founder, Carl Moore, announced that he was ready to fight. Did Rx Depot simply breech U.S. laws of intellectual property? Or did its actions suggest that the laws were ready for change?
Swot Analysis of "Rx Depot: Importing Drugs from Canada" written by Adam Day, Debora L. Spar includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Rx Depot facing as an external strategic factors. Some of the topics covered in Rx Depot: Importing Drugs from Canada case study are - Strategic Management Strategies, Intellectual property, Policy, Regulation and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Rx Depot: Importing Drugs from Canada casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, increasing transportation and logistics costs, increasing commodity prices, there is increasing trade war between United States & China, wage bills are increasing, technology disruption,
increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Rx Depot: Importing Drugs from Canada
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Rx Depot: Importing Drugs from Canada case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Rx Depot, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Rx Depot 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 Rx Depot: Importing Drugs from Canada can be done for the following purposes –
1. Strategic planning using facts provided in Rx Depot: Importing Drugs from Canada case study
2. Improving business portfolio management of Rx Depot
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 Rx Depot
Strengths Rx Depot: Importing Drugs from Canada | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Rx Depot in Rx Depot: Importing Drugs from Canada Harvard Business Review case study are -
Ability to lead change in Leadership & Managing People field
– Rx Depot 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 Rx Depot in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Rx Depot has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Rx Depot 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Rx Depot digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Rx Depot 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– Rx Depot: Importing Drugs from Canada firm has clearly differentiated products in the market place. This has enabled Rx Depot to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Rx Depot to invest into research and development (R&D) and innovation.
High brand equity
– Rx Depot has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Rx Depot to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Rx Depot is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Rx Depot has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Rx Depot: Importing Drugs from Canada 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 switching costs
– The high switching costs that Rx Depot 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.
Highly skilled collaborators
– Rx Depot 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 Rx Depot: Importing Drugs from Canada HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Rx Depot is one of the leading recruiters in the industry. Managers in the Rx Depot: Importing Drugs from Canada 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)
– Rx Depot 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 Rx Depot: Importing Drugs from Canada - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Rx Depot is present in almost all the verticals within the industry. This has provided firm in Rx Depot: Importing Drugs from Canada 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.
Weaknesses Rx Depot: Importing Drugs from Canada | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Rx Depot: Importing Drugs from Canada are -
Interest costs
– Compare to the competition, Rx Depot 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.
Skills based hiring
– The stress on hiring functional specialists at Rx Depot 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.
Products dominated business model
– Even though Rx Depot 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 - Rx Depot: Importing Drugs from Canada should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Rx Depot 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.
Aligning sales with marketing
– It come across in the case study Rx Depot: Importing Drugs from Canada 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 Rx Depot: Importing Drugs from Canada can leverage the sales team experience to cultivate customer relationships as Rx Depot is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Rx Depot is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Rx Depot: Importing Drugs from Canada can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Adam Day, Debora L. Spar suggests that, Rx Depot 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Rx Depot: Importing Drugs from Canada, it seems that the employees of Rx Depot 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.
Increasing silos among functional specialists
– The organizational structure of Rx Depot is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Rx Depot needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Rx Depot to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Rx Depot products
– To increase the profitability and margins on the products, Rx Depot needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Rx Depot supply chain. Even after few cautionary changes mentioned in the HBR case study - Rx Depot: Importing Drugs from Canada, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Rx Depot vulnerable to further global disruptions in South East Asia.
Opportunities Rx Depot: Importing Drugs from Canada | 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 Rx Depot: Importing Drugs from Canada are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Rx Depot can use these opportunities to build new business models that can help the communities that Rx Depot operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Rx Depot can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Rx Depot 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 Rx Depot: Importing Drugs from Canada - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Rx Depot to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Rx Depot 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.
Better consumer reach
– The expansion of the 5G network will help Rx Depot to increase its market reach. Rx Depot 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Rx Depot can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Rx Depot 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.
Leveraging digital technologies
– Rx Depot 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.
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 Rx Depot 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.
Building a culture of innovation
– managers at Rx Depot 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 Leadership & Managing People segment.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Rx Depot is facing challenges because of the dominance of functional experts in the organization. Rx Depot: Importing Drugs from Canada 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.
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. Rx Depot 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. Rx Depot 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.
Buying journey improvements
– Rx Depot can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Rx Depot: Importing Drugs from Canada 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 Rx Depot: Importing Drugs from Canada External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Rx Depot: Importing Drugs from Canada are -
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.
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. Rx Depot needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Increasing wage structure of Rx Depot
– 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 Rx Depot.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Rx Depot with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Rx Depot is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Rx Depot 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 Rx Depot.
Regulatory challenges
– Rx Depot 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.
Environmental challenges
– Rx Depot 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. Rx Depot can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Stagnating economy with rate increase
– Rx Depot 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.
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 Rx Depot business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Rx Depot 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.
Weighted SWOT Analysis of Rx Depot: Importing Drugs from Canada 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 Rx Depot: Importing Drugs from Canada 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 Rx Depot: Importing Drugs from Canada 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 Rx Depot: Importing Drugs from Canada 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 Rx Depot: Importing Drugs from Canada 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 Rx Depot needs to make to build a sustainable competitive advantage.
