DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW
This case describes the launching of a polypill at Dr. Reddy's to help patients with a high risk of Cardio Vascular Disease (CVD) prevent a second heart attack or stroke. Called the Red Heart Pill (RHP), this combination pill included four therapeutic agents: One to lower cholesterol, the other two to lower blood pressure and a fourth, Aspirin, to thin out the blood.Taken together they were estimated to lower the risk of a second heart attack or stroke by 55%.The RHP was particularly attractive to treat the poor. At a treatment cost of just US$ 25 a year, the RHP was expected to make a major dent in lowering CVD-related deaths and disabilities in India. Dr. Reddy's had completed clinical trials to launch the pill in India and international clinical trials were under way to launch the pill in other markets. The company also hoped to introduce a variant of the pill for primary prevention, helping patients with a low to moderate risk of CVD avert a first heart attack or stroke. The case details the many dilemmas that the top management team of Dr. Reddy's faced in pursuing the RHP project. The active ingredients in the RHP were generic drugs; and yet, because the combination had never been offered before, the RHP had to go through clinical trials to prove its bioequivalence to each of the constituent drugs. The RHP also had to be marketed to physicians and could be sold only through a prescription. The added R&D and marketing costs had to be recouped through the price of the RHP, although this price had to be closer to generics prices. In addition, it would be hard to get a patent for the RHP. Here was a pill that was neither a new discovery drug nor a straight generic. Shaping a strategy for it was demanding and yet if the RHP could be launched successfully, there would be several other opportunities for a combination pill to treat other chronic diseases like depression and osteoarthritis. Learning objectives: The case is a good vehicle to discuss the changing landscape of the global pharmaceutical industry which is faced with the simultaneous challenge of a thinning new product pipeline and increasing pressures from government regulators and third party payers to cut costs. Projects like the RHP at Dr. Reddy's provide examples of the new business models (and the dilemmas that underlie them) that industry leaders would have to consider. Projects like the RHP at Dr. Reddy's provide examples of the new business models (and the dilemmas that underlie them) that industry leaders would have to consider. The case also provides an excellent background from which to profile effective social entrepreneurs, such as the executive in charge of the RHP, Raghu Cidambi.
Swot Analysis of "DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW" written by Bala Chakravarthy, Sophie Coughlan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Rhp Pill facing as an external strategic factors. Some of the topics covered in DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW case study are - Strategic Management Strategies, and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW casestudy better are - – increasing transportation and logistics costs, increasing commodity prices, wage bills are increasing, cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%,
digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, etc
Introduction to SWOT Analysis of DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Rhp Pill, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Rhp Pill 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 DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW can be done for the following purposes –
1. Strategic planning using facts provided in DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW case study
2. Improving business portfolio management of Rhp Pill
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 Rhp Pill
Strengths DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Rhp Pill in DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW Harvard Business Review case study are -
Training and development
– Rhp Pill has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW 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.
Effective Research and Development (R&D)
– Rhp Pill 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 DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Rhp Pill 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.
Operational resilience
– The operational resilience strategy in the DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW 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.
Superior customer experience
– The customer experience strategy of Rhp Pill in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Leadership & Managing People industry
– DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW firm has clearly differentiated products in the market place. This has enabled Rhp Pill to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Rhp Pill to invest into research and development (R&D) and innovation.
Organizational Resilience of Rhp Pill
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Rhp Pill does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Rhp Pill has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Rhp Pill to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Rhp Pill digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Rhp Pill 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.
Successful track record of launching new products
– Rhp Pill has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Rhp Pill 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.
Highly skilled collaborators
– Rhp Pill 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 DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Rhp Pill is one of the most innovative firm in sector. Manager in DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW are -
Slow to strategic competitive environment developments
– As DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW HBR case study mentions - Rhp Pill 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 bargaining power of channel partners
– Because of the regulatory requirements, Bala Chakravarthy, Sophie Coughlan suggests that, Rhp Pill 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW, is just above the industry average. Rhp Pill 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.
Aligning sales with marketing
– It come across in the case study DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW 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 DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW can leverage the sales team experience to cultivate customer relationships as Rhp Pill is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Rhp Pill is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Rhp Pill needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Rhp Pill to focus more on services rather than just following the product oriented approach.
Products dominated business model
– Even though Rhp Pill 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 - DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW, in the dynamic environment Rhp Pill has struggled to respond to the nimble upstart competition. Rhp Pill has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Rhp Pill supply chain. Even after few cautionary changes mentioned in the HBR case study - DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Rhp Pill vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Rhp Pill products
– To increase the profitability and margins on the products, Rhp Pill needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the segment, Rhp Pill 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 operating costs
– Compare to the competitors, firm in the HBR case study DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW 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 Rhp Pill 's lucrative customers.
Opportunities DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW | 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 DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Rhp Pill 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, DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Rhp Pill 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.
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 Rhp Pill 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Rhp Pill 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 Rhp Pill to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Rhp Pill 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.
Developing new processes and practices
– Rhp Pill 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 Rhp Pill to increase its market reach. Rhp Pill 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.
Using analytics as competitive advantage
– Rhp Pill 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 DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Rhp Pill to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Rhp Pill can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Rhp Pill can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Rhp Pill 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.
Buying journey improvements
– Rhp Pill can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW 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.
Loyalty marketing
– Rhp Pill 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.
Threats DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW, Rhp Pill may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Rhp Pill 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.
Regulatory challenges
– Rhp Pill 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.
Consumer confidence and its impact on Rhp Pill 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.
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. Rhp Pill 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
– Rhp Pill 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. Rhp Pill can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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 Rhp Pill in the Leadership & Managing People sector and impact the bottomline of the organization.
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. Rhp Pill can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Rhp Pill needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Rhp Pill is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Rhp Pill with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Rhp Pill 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.
Weighted SWOT Analysis of DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW 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 DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW 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 DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW 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 DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW 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 DR. REDDY'S: MEDICINE IS FOR PEOPLE, PROFITS FOLLOW 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 Rhp Pill needs to make to build a sustainable competitive advantage.
