Case Study Description of Rx Pharmacy: Physical versus Online Options
In May 2015, Alankit Life Care Limited was concerned about the future of Rx Pharmacy, its online pharmacy retail venture. The company had both a physical and an online platform for Rx Pharmacy, but the physical stores were not doing well due to aggressive marketing strategies adopted by competitors. Government regulations also presented a threat to the future of the online pharmacy. Rx Pharmacy was targeting a customer base of 50,000 customers and 2,000 associated retail pharmacies by 2016. It also hoped to achieve a pan-India presence, like the other companies within Alankit Group. However, the company was unsure about how to achieve its goals. Would Rx Pharmacy need both a physical and a digital retail platform, or was it best to pursue only the online path? What strategies could help to strengthen the online business? Sandeep Puri is affiliated with Institute of Management Technology, Ghaziabad. Siddhant Puri is affiliated with Maharaja Agrasen Institute of Management Studies.
Swot Analysis of "Rx Pharmacy: Physical versus Online Options" written by Sandeep Puri, Siddhant Puri includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Pharmacy Rx facing as an external strategic factors. Some of the topics covered in Rx Pharmacy: Physical versus Online Options case study are - Strategic Management Strategies, and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Rx Pharmacy: Physical versus Online Options casestudy better are - – increasing transportation and logistics costs, central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, increasing energy prices, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs,
wage bills are increasing, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Rx Pharmacy: Physical versus Online Options
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Rx Pharmacy: Physical versus Online Options case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Pharmacy Rx, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Pharmacy Rx 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 Pharmacy: Physical versus Online Options can be done for the following purposes –
1. Strategic planning using facts provided in Rx Pharmacy: Physical versus Online Options case study
2. Improving business portfolio management of Pharmacy Rx
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 Pharmacy Rx
Strengths Rx Pharmacy: Physical versus Online Options | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Pharmacy Rx in Rx Pharmacy: Physical versus Online Options Harvard Business Review case study are -
Innovation driven organization
– Pharmacy Rx is one of the most innovative firm in sector. Manager in Rx Pharmacy: Physical versus Online Options Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Pharmacy Rx has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Pharmacy Rx to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Pharmacy Rx is present in almost all the verticals within the industry. This has provided firm in Rx Pharmacy: Physical versus Online Options case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
High switching costs
– The high switching costs that Pharmacy Rx 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.
Low bargaining power of suppliers
– Suppliers of Pharmacy Rx in the sector have low bargaining power. Rx Pharmacy: Physical versus Online Options has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Pharmacy Rx to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Pharmacy Rx 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 Pharmacy: Physical versus Online Options HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Leadership & Managing People industry
– Rx Pharmacy: Physical versus Online Options firm has clearly differentiated products in the market place. This has enabled Pharmacy Rx to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Pharmacy Rx to invest into research and development (R&D) and innovation.
Strong track record of project management
– Pharmacy Rx is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Pharmacy Rx 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 Sandeep Puri, Siddhant Puri 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.
Successful track record of launching new products
– Pharmacy Rx has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Pharmacy Rx 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.
Training and development
– Pharmacy Rx has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Rx Pharmacy: Physical versus Online Options 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)
– Pharmacy Rx 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 Pharmacy: Physical versus Online Options - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Rx Pharmacy: Physical versus Online Options | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Rx Pharmacy: Physical versus Online Options are -
High bargaining power of channel partners
– Because of the regulatory requirements, Sandeep Puri, Siddhant Puri suggests that, Pharmacy Rx 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.
Slow decision making process
– As mentioned earlier in the report, Pharmacy Rx 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. Pharmacy Rx 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.
Capital Spending Reduction
– Even during the low interest decade, Pharmacy Rx 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.
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 Pharmacy Rx supply chain. Even after few cautionary changes mentioned in the HBR case study - Rx Pharmacy: Physical versus Online Options, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Pharmacy Rx vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Rx Pharmacy: Physical versus Online Options, in the dynamic environment Pharmacy Rx has struggled to respond to the nimble upstart competition. Pharmacy Rx has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Rx Pharmacy: Physical versus Online Options, it seems that the employees of Pharmacy Rx 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Rx Pharmacy: Physical versus Online Options HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Pharmacy Rx has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Pharmacy Rx is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Rx Pharmacy: Physical versus Online Options 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 operating costs
– Compare to the competitors, firm in the HBR case study Rx Pharmacy: Physical versus Online Options 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 Pharmacy Rx 's lucrative customers.
Low market penetration in new markets
– Outside its home market of Pharmacy Rx, firm in the HBR case study Rx Pharmacy: Physical versus Online Options needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Rx Pharmacy: Physical versus Online Options 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 Pharmacy: Physical versus Online Options can leverage the sales team experience to cultivate customer relationships as Pharmacy Rx is planning to shift buying processes online.
Opportunities Rx Pharmacy: Physical versus Online Options | 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 Pharmacy: Physical versus Online Options are -
Better consumer reach
– The expansion of the 5G network will help Pharmacy Rx to increase its market reach. Pharmacy Rx 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.
Developing new processes and practices
– Pharmacy Rx 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Pharmacy Rx 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 Pharmacy Rx to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Pharmacy Rx can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Rx Pharmacy: Physical versus Online Options 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Pharmacy Rx can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Using analytics as competitive advantage
– Pharmacy Rx 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 Pharmacy: Physical versus Online Options - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Pharmacy Rx to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Pharmacy Rx 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.
Leveraging digital technologies
– Pharmacy Rx 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 Pharmacy Rx in the consumer business. Now Pharmacy Rx can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Pharmacy Rx 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, Pharmacy Rx 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, Rx Pharmacy: Physical versus Online Options, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Pharmacy Rx 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. Pharmacy Rx 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Pharmacy Rx can use these opportunities to build new business models that can help the communities that Pharmacy Rx operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Threats Rx Pharmacy: Physical versus Online Options External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Rx Pharmacy: Physical versus Online Options 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 Pharmacy Rx business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Pharmacy Rx 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Pharmacy Rx 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 Rx Pharmacy: Physical versus Online Options .
Stagnating economy with rate increase
– Pharmacy Rx 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.
Increasing wage structure of Pharmacy Rx
– 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 Pharmacy Rx.
Shortening product life cycle
– it is one of the major threat that Pharmacy Rx 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
– Pharmacy Rx 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.
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.
Environmental challenges
– Pharmacy Rx 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. Pharmacy Rx 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 Pharmacy Rx in the Leadership & Managing People sector and impact the bottomline 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. Pharmacy Rx needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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 Pharmacy Rx.
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. Pharmacy Rx 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.
Weighted SWOT Analysis of Rx Pharmacy: Physical versus Online Options 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 Pharmacy: Physical versus Online Options 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 Pharmacy: Physical versus Online Options 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 Pharmacy: Physical versus Online Options 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 Pharmacy: Physical versus Online Options 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 Pharmacy Rx needs to make to build a sustainable competitive advantage.