Case Study Description of Zoetis, Pfizer's Animal Health Spin-Off (B)
This case illustrates different growth strategies in the pharmaceutical industry. R&D management is a critical component of growth strategies, and the case demonstrates the importance of using a holistic framework for R&D when expanding the firm's business footprint. The case serves the purpose of comparing organic and inorganic growth strategies, and identifying the steps that are critical for the execution of these strategies.
Authors :: Shantanu Bhattacharya, Sjiva De Meester, Sameer Hasija
Swot Analysis of "Zoetis, Pfizer's Animal Health Spin-Off (B)" written by Shantanu Bhattacharya, Sjiva De Meester, Sameer Hasija includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Strategies Zoetis facing as an external strategic factors. Some of the topics covered in Zoetis, Pfizer's Animal Health Spin-Off (B) case study are - Strategic Management Strategies, Research & development, Supply chain and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Zoetis, Pfizer's Animal Health Spin-Off (B) casestudy better are - – there is backlash against globalization, increasing energy prices, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, wage bills are increasing, increasing transportation and logistics costs,
challanges to central banks by blockchain based private currencies, technology disruption, etc
Introduction to SWOT Analysis of Zoetis, Pfizer's Animal Health Spin-Off (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Zoetis, Pfizer's Animal Health Spin-Off (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Strategies Zoetis, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Strategies Zoetis 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 Zoetis, Pfizer's Animal Health Spin-Off (B) can be done for the following purposes –
1. Strategic planning using facts provided in Zoetis, Pfizer's Animal Health Spin-Off (B) case study
2. Improving business portfolio management of Strategies Zoetis
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 Strategies Zoetis
Strengths Zoetis, Pfizer's Animal Health Spin-Off (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Strategies Zoetis in Zoetis, Pfizer's Animal Health Spin-Off (B) Harvard Business Review case study are -
High switching costs
– The high switching costs that Strategies Zoetis 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.
Strong track record of project management
– Strategies Zoetis is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Strategies Zoetis digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Strategies Zoetis 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.
Operational resilience
– The operational resilience strategy in the Zoetis, Pfizer's Animal Health Spin-Off (B) 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.
Ability to recruit top talent
– Strategies Zoetis is one of the leading recruiters in the industry. Managers in the Zoetis, Pfizer's Animal Health Spin-Off (B) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Strategies Zoetis is present in almost all the verticals within the industry. This has provided firm in Zoetis, Pfizer's Animal Health Spin-Off (B) 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.
Innovation driven organization
– Strategies Zoetis is one of the most innovative firm in sector. Manager in Zoetis, Pfizer's Animal Health Spin-Off (B) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Strategies Zoetis has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Strategies Zoetis 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.
High brand equity
– Strategies Zoetis has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Strategies Zoetis to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Strategies Zoetis 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 Zoetis, Pfizer's Animal Health Spin-Off (B) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Strategies Zoetis has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Zoetis, Pfizer's Animal Health Spin-Off (B) 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– Zoetis, Pfizer's Animal Health Spin-Off (B) firm has clearly differentiated products in the market place. This has enabled Strategies Zoetis to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Strategies Zoetis to invest into research and development (R&D) and innovation.
Weaknesses Zoetis, Pfizer's Animal Health Spin-Off (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Zoetis, Pfizer's Animal Health Spin-Off (B) are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Zoetis, Pfizer's Animal Health Spin-Off (B) 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 Strategies Zoetis has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, Shantanu Bhattacharya, Sjiva De Meester, Sameer Hasija suggests that, Strategies Zoetis 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.
High cash cycle compare to competitors
Strategies Zoetis 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Strategies Zoetis 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.
Lack of clear differentiation of Strategies Zoetis products
– To increase the profitability and margins on the products, Strategies Zoetis needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring
– The stress on hiring functional specialists at Strategies Zoetis 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.
Capital Spending Reduction
– Even during the low interest decade, Strategies Zoetis 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.
Need for greater diversity
– Strategies Zoetis 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Zoetis, Pfizer's Animal Health Spin-Off (B), is just above the industry average. Strategies Zoetis 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.
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 Strategies Zoetis supply chain. Even after few cautionary changes mentioned in the HBR case study - Zoetis, Pfizer's Animal Health Spin-Off (B), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Strategies Zoetis 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 Zoetis, Pfizer's Animal Health Spin-Off (B), in the dynamic environment Strategies Zoetis has struggled to respond to the nimble upstart competition. Strategies Zoetis has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Zoetis, Pfizer's Animal Health Spin-Off (B) | 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 Zoetis, Pfizer's Animal Health Spin-Off (B) are -
Creating value in data economy
– The success of analytics program of Strategies Zoetis has opened avenues for new revenue streams for the organization in the industry. This can help Strategies Zoetis to build a more holistic ecosystem as suggested in the Zoetis, Pfizer's Animal Health Spin-Off (B) case study. Strategies Zoetis can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Strategies Zoetis 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Strategies Zoetis can use these opportunities to build new business models that can help the communities that Strategies Zoetis operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Strategies Zoetis 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 Strategies Zoetis to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Strategies Zoetis 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 Zoetis, Pfizer's Animal Health Spin-Off (B) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Strategies Zoetis 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, Strategies Zoetis 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, Zoetis, Pfizer's Animal Health Spin-Off (B), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Strategies Zoetis to increase its market reach. Strategies Zoetis 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Strategies Zoetis 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Strategies Zoetis is facing challenges because of the dominance of functional experts in the organization. Zoetis, Pfizer's Animal Health Spin-Off (B) 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Strategies Zoetis 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.
Leveraging digital technologies
– Strategies Zoetis 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.
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. Strategies Zoetis can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Strategies Zoetis can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Zoetis, Pfizer's Animal Health Spin-Off (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Zoetis, Pfizer's Animal Health Spin-Off (B) are -
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. Strategies Zoetis can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Strategies Zoetis 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 Zoetis, Pfizer's Animal Health Spin-Off (B) .
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.
Increasing wage structure of Strategies Zoetis
– 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 Strategies Zoetis.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Zoetis, Pfizer's Animal Health Spin-Off (B), Strategies Zoetis 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 .
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 Strategies Zoetis 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. Strategies Zoetis needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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. Strategies Zoetis 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
– Strategies Zoetis 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. Strategies Zoetis can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Strategies Zoetis 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 Strategies Zoetis is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Strategies Zoetis has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Strategies Zoetis needs to keep up with the evolution of technology in the Leadership & Managing People sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
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.
Weighted SWOT Analysis of Zoetis, Pfizer's Animal Health Spin-Off (B) 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 Zoetis, Pfizer's Animal Health Spin-Off (B) 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 Zoetis, Pfizer's Animal Health Spin-Off (B) 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 Zoetis, Pfizer's Animal Health Spin-Off (B) 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 Zoetis, Pfizer's Animal Health Spin-Off (B) 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 Strategies Zoetis needs to make to build a sustainable competitive advantage.
