The Allergan Board Under Fire (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of The Allergan Board Under Fire (A)

In 2014, the Allergan Inc. board of directors received a surprise takeover offer from Valeant Pharmaceuticals in alliance with hedge fund activist Bill Ackman's Pershing Square Capital Management. In the unprecedented arrangement between an acquirer and a hedge fund activist, Pershing Square had quietly amassed a 9.7% stake in Allergan prior to the Valeant bid, making Pershing Square Allergan's largest shareholder. The case presents students with many of the decisions Allergan's directors faced amid challenges to Allergan's governance, management, and business model. In particular, the Allergan board must decide whether to pursue a $10 billion acquisition of Salix Pharmaceuticals while under threat of a proxy contest and a special shareholder meeting to vote on replacing Allergan's directors with a slate more favorable to the Valeant merger. The proposed Salix acquisition would give Allergan a new therapeutic market but would also make Allergan too big for Valeant to acquire.

Authors :: Lynn Sharp Paine, Suraj Srinivasan, John Coates, David Lane

Topics :: Leadership & Managing People

Tags :: Business law, Business models, Corporate communications, Financial management, Financial markets, Leading teams, Mergers & acquisitions, Regulation, Research & development, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "The Allergan Board Under Fire (A)" written by Lynn Sharp Paine, Suraj Srinivasan, John Coates, David Lane includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Allergan Allergan's facing as an external strategic factors. Some of the topics covered in The Allergan Board Under Fire (A) case study are - Strategic Management Strategies, Business law, Business models, Corporate communications, Financial management, Financial markets, Leading teams, Mergers & acquisitions, Regulation, Research & development and Leadership & Managing People.

Some of the macro environment factors that can be used to understand the The Allergan Board Under Fire (A) casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, increasing household debt because of falling income levels, technology disruption, cloud computing is disrupting traditional business models, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, etc

---

---

---

---

Introduction to SWOT Analysis of The Allergan Board Under Fire (A)

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Allergan Board Under Fire (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Allergan Allergan's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Allergan Allergan's 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 Allergan Board Under Fire (A) can be done for the following purposes –
1. Strategic planning using facts provided in The Allergan Board Under Fire (A) case study
2. Improving business portfolio management of Allergan Allergan's
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 Allergan Allergan's

---

Strengths The Allergan Board Under Fire (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Allergan Allergan's in The Allergan Board Under Fire (A) Harvard Business Review case study are -

High brand equity

– Allergan Allergan's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Allergan Allergan's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Sustainable margins compare to other players in Leadership & Managing People industry

– The Allergan Board Under Fire (A) firm has clearly differentiated products in the market place. This has enabled Allergan Allergan's to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Allergan Allergan's to invest into research and development (R&D) and innovation.

Ability to recruit top talent

– Allergan Allergan's is one of the leading recruiters in the industry. Managers in the The Allergan Board Under Fire (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.

Superior customer experience

– The customer experience strategy of Allergan Allergan's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Low bargaining power of suppliers

– Suppliers of Allergan Allergan's in the sector have low bargaining power. The Allergan Board Under Fire (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Allergan Allergan's to manage not only supply disruptions but also source products at highly competitive prices.

Cross disciplinary teams

– Horizontal connected teams at the Allergan Allergan's 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.

Digital Transformation in Leadership & Managing People segment

- digital transformation varies from industry to industry. For Allergan Allergan's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Allergan Allergan's 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.

Learning organization

- Allergan Allergan's 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 Allergan Allergan's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The Allergan Board Under Fire (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

Highly skilled collaborators

– Allergan Allergan's 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 Allergan Board Under Fire (A) 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

– Allergan Allergan's 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 Allergan Allergan's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Operational resilience

– The operational resilience strategy in the The Allergan Board Under Fire (A) 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.

Successful track record of launching new products

– Allergan Allergan's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Allergan Allergan's 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.

---

---

Weaknesses The Allergan Board Under Fire (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of The Allergan Board Under Fire (A) are -

Aligning sales with marketing

– It come across in the case study The Allergan Board Under Fire (A) 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 Allergan Board Under Fire (A) can leverage the sales team experience to cultivate customer relationships as Allergan Allergan's is planning to shift buying processes online.

Employees’ incomplete understanding of strategy

– From the instances in the HBR case study The Allergan Board Under Fire (A), it seems that the employees of Allergan Allergan's 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 Allergan Board Under Fire (A) 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 Allergan Allergan's 's lucrative customers.

High cash cycle compare to competitors

Allergan Allergan's has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Slow decision making process

– As mentioned earlier in the report, Allergan Allergan's 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. Allergan Allergan's 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.

Slow to strategic competitive environment developments

– As The Allergan Board Under Fire (A) HBR case study mentions - Allergan Allergan's 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 Allergan Allergan's supply chain. Even after few cautionary changes mentioned in the HBR case study - The Allergan Board Under Fire (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Allergan Allergan's vulnerable to further global disruptions in South East Asia.

Need for greater diversity

– Allergan Allergan's 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.

Ability to respond to the competition

– As the decision making is very deliberative, highlighted in the case study The Allergan Board Under Fire (A), in the dynamic environment Allergan Allergan's has struggled to respond to the nimble upstart competition. Allergan Allergan's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Skills based hiring

– The stress on hiring functional specialists at Allergan Allergan's 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.

Low market penetration in new markets

– Outside its home market of Allergan Allergan's, firm in the HBR case study The Allergan Board Under Fire (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

---

Opportunities The Allergan Board Under Fire (A) | 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 Allergan Board Under Fire (A) are -

Lowering marketing communication costs

– 5G expansion will open new opportunities for Allergan Allergan's 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.

Learning at scale

– Online learning technologies has now opened space for Allergan Allergan's 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.

Loyalty marketing

– Allergan Allergan's 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.

Building a culture of innovation

– managers at Allergan Allergan's 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.

Using analytics as competitive advantage

– Allergan Allergan's 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 Allergan Board Under Fire (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Allergan Allergan's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Allergan Allergan's 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, The Allergan Board Under Fire (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

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 Allergan Allergan's 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.

Leveraging digital technologies

– Allergan Allergan's 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.

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 Allergan Allergan's in the consumer business. Now Allergan Allergan's can target international markets with far fewer capital restrictions requirements than the existing system.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Allergan Allergan's 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 Allergan Allergan's to hire the very best people irrespective of their geographical location.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Allergan Allergan's 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. Allergan Allergan's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Allergan Allergan's is facing challenges because of the dominance of functional experts in the organization. The Allergan Board Under Fire (A) 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.

---

Threats The Allergan Board Under Fire (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats mentioned in the HBR case study The Allergan Board Under Fire (A) 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 Allergan Allergan's business can come under increasing regulations regarding data privacy, data security, etc.

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. Allergan Allergan's 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.

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 Allergan Allergan's.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Allergan Allergan's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.

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. Allergan Allergan's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Environmental challenges

– Allergan Allergan's 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. Allergan Allergan's can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.

Regulatory challenges

– Allergan Allergan's 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.

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.

Increasing wage structure of Allergan Allergan's

– 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 Allergan Allergan's.

High dependence on third party suppliers

– Allergan Allergan's 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.

Consumer confidence and its impact on Allergan Allergan's 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.

Shortening product life cycle

– it is one of the major threat that Allergan Allergan's is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

---

Weighted SWOT Analysis of The Allergan Board Under Fire (A) 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 Allergan Board Under Fire (A) 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 Allergan Board Under Fire (A) 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 Allergan Board Under Fire (A) 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 Allergan Board Under Fire (A) 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 Allergan Allergan's needs to make to build a sustainable competitive advantage.

--- ---