Presents Connetics, a biotechnology and pharmaceutical company, from its founding in 1993 through the final clinical trials of its flagship drug compound in 2000. Throughout that time, the company had experienced the failure of another compound, while successfully in-licensing other pharmaceutical products that would immediately generate income. Ultimately, the pivotal trial in 2000 was a failure, and CEO Tom Wiggans must manage the company through this failure (the stock went from about $25 to $5 after the results were revealed publicly).
Authors :: Robert Chess, Mark Leslie, Joshua Spitzer
Swot Analysis of "Connetics and Relaxin" written by Robert Chess, Mark Leslie, Joshua Spitzer includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Connetics Compound facing as an external strategic factors. Some of the topics covered in Connetics and Relaxin case study are - Strategic Management Strategies, Crisis management, Entrepreneurship and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Connetics and Relaxin casestudy better are - – increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, there is backlash against globalization, increasing commodity prices, increasing energy prices, there is increasing trade war between United States & China, wage bills are increasing,
geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Connetics and Relaxin
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Connetics and Relaxin case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Connetics Compound, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Connetics Compound 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 Connetics and Relaxin can be done for the following purposes –
1. Strategic planning using facts provided in Connetics and Relaxin case study
2. Improving business portfolio management of Connetics Compound
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 Connetics Compound
Strengths Connetics and Relaxin | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Connetics Compound in Connetics and Relaxin Harvard Business Review case study are -
Ability to lead change in Leadership & Managing People field
– Connetics Compound 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 Connetics Compound in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Connetics Compound 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
– Connetics and Relaxin firm has clearly differentiated products in the market place. This has enabled Connetics Compound to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Connetics Compound to invest into research and development (R&D) and innovation.
High brand equity
– Connetics Compound has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Connetics Compound to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Connetics Compound is one of the most innovative firm in sector. Manager in Connetics and Relaxin Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Connetics Compound is present in almost all the verticals within the industry. This has provided firm in Connetics and Relaxin 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Connetics Compound digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Connetics Compound 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
- Connetics Compound 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 Connetics Compound is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Connetics and Relaxin Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Connetics Compound 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 Connetics and Relaxin HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Connetics Compound 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
– Connetics Compound 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 Robert Chess, Mark Leslie, Joshua Spitzer 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.
Training and development
– Connetics Compound has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Connetics and Relaxin 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.
Weaknesses Connetics and Relaxin | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Connetics and Relaxin are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Connetics Compound is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Connetics and Relaxin can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Connetics and Relaxin, is just above the industry average. Connetics Compound 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.
Slow decision making process
– As mentioned earlier in the report, Connetics Compound 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. Connetics Compound 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.
Need for greater diversity
– Connetics Compound 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.
Lack of clear differentiation of Connetics Compound products
– To increase the profitability and margins on the products, Connetics Compound 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 Connetics Compound 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.
Aligning sales with marketing
– It come across in the case study Connetics and Relaxin 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 Connetics and Relaxin can leverage the sales team experience to cultivate customer relationships as Connetics Compound is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Connetics Compound 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.
Interest costs
– Compare to the competition, Connetics Compound has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Connetics and Relaxin, in the dynamic environment Connetics Compound has struggled to respond to the nimble upstart competition. Connetics Compound has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study Connetics and Relaxin 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 Connetics Compound 's lucrative customers.
Opportunities Connetics and Relaxin | 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 Connetics and Relaxin are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Connetics Compound 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.
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 Connetics Compound in the consumer business. Now Connetics Compound can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Connetics Compound 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.
Better consumer reach
– The expansion of the 5G network will help Connetics Compound to increase its market reach. Connetics Compound 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.
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. Connetics Compound can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Connetics Compound can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Connetics and Relaxin 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.
Building a culture of innovation
– managers at Connetics Compound 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.
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. Connetics Compound can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Connetics Compound has opened avenues for new revenue streams for the organization in the industry. This can help Connetics Compound to build a more holistic ecosystem as suggested in the Connetics and Relaxin case study. Connetics Compound can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Connetics Compound 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Connetics Compound 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 Connetics Compound to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Connetics Compound 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, Connetics and Relaxin, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Connetics Compound 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.
Threats Connetics and Relaxin External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Connetics and Relaxin are -
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 Connetics Compound in the Leadership & Managing People sector and impact the bottomline of the organization.
Regulatory challenges
– Connetics Compound 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.
Environmental challenges
– Connetics Compound 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. Connetics Compound can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Increasing wage structure of Connetics Compound
– 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 Connetics Compound.
High dependence on third party suppliers
– Connetics Compound 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Connetics Compound 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Connetics Compound with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Connetics Compound has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Connetics Compound 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.
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. Connetics Compound 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.
Consumer confidence and its impact on Connetics Compound 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.
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.
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 Connetics Compound business can come under increasing regulations regarding data privacy, data security, etc.
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 Connetics Compound.
Weighted SWOT Analysis of Connetics and Relaxin 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 Connetics and Relaxin 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 Connetics and Relaxin 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 Connetics and Relaxin 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 Connetics and Relaxin 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 Connetics Compound needs to make to build a sustainable competitive advantage.