Massachusetts General Hospital and the Enbrel Royalty SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Massachusetts General Hospital and the Enbrel Royalty
Massachusetts General Hospital is considering selling its royalty interest in Enbrel, Amgen's blockbuster drug for the treatment of rheumatoid arthritis. In assessing whether to sell, and at what price, the hospital must determine its value to a potential buyer as well as its own value of the royalty income.
Swot Analysis of "Massachusetts General Hospital and the Enbrel Royalty" written by David S. Scharfstein, Darren R. Smart includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Royalty Enbrel facing as an external strategic factors. Some of the topics covered in Massachusetts General Hospital and the Enbrel Royalty case study are - Strategic Management Strategies, Financial management, Intellectual property, Risk management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Massachusetts General Hospital and the Enbrel Royalty casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic ,
there is increasing trade war between United States & China, increasing commodity prices, etc
Introduction to SWOT Analysis of Massachusetts General Hospital and the Enbrel Royalty
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Massachusetts General Hospital and the Enbrel Royalty case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Royalty Enbrel, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Royalty Enbrel 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 Massachusetts General Hospital and the Enbrel Royalty can be done for the following purposes –
1. Strategic planning using facts provided in Massachusetts General Hospital and the Enbrel Royalty case study
2. Improving business portfolio management of Royalty Enbrel
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Royalty Enbrel
Strengths Massachusetts General Hospital and the Enbrel Royalty | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Royalty Enbrel in Massachusetts General Hospital and the Enbrel Royalty Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Massachusetts General Hospital and the Enbrel Royalty 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.
Sustainable margins compare to other players in Finance & Accounting industry
– Massachusetts General Hospital and the Enbrel Royalty firm has clearly differentiated products in the market place. This has enabled Royalty Enbrel to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Royalty Enbrel to invest into research and development (R&D) and innovation.
Innovation driven organization
– Royalty Enbrel is one of the most innovative firm in sector. Manager in Massachusetts General Hospital and the Enbrel Royalty 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
– Royalty Enbrel has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Royalty Enbrel to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Royalty Enbrel 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.
Effective Research and Development (R&D)
– Royalty Enbrel 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 Massachusetts General Hospital and the Enbrel Royalty - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Royalty Enbrel 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.
Ability to lead change in Finance & Accounting field
– Royalty Enbrel 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 Royalty Enbrel in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Royalty Enbrel 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 Massachusetts General Hospital and the Enbrel Royalty HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Royalty Enbrel has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Massachusetts General Hospital and the Enbrel Royalty 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.
Ability to recruit top talent
– Royalty Enbrel is one of the leading recruiters in the industry. Managers in the Massachusetts General Hospital and the Enbrel Royalty are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Royalty Enbrel
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Royalty Enbrel does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Massachusetts General Hospital and the Enbrel Royalty | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Massachusetts General Hospital and the Enbrel Royalty are -
Workers concerns about automation
– As automation is fast increasing in the segment, Royalty Enbrel 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Massachusetts General Hospital and the Enbrel Royalty, it seems that the employees of Royalty Enbrel 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Massachusetts General Hospital and the Enbrel Royalty, in the dynamic environment Royalty Enbrel has struggled to respond to the nimble upstart competition. Royalty Enbrel 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 Massachusetts General Hospital and the Enbrel Royalty 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 Royalty Enbrel 's lucrative customers.
High bargaining power of channel partners
– Because of the regulatory requirements, David S. Scharfstein, Darren R. Smart suggests that, Royalty Enbrel 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 to strategic competitive environment developments
– As Massachusetts General Hospital and the Enbrel Royalty HBR case study mentions - Royalty Enbrel 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.
Capital Spending Reduction
– Even during the low interest decade, Royalty Enbrel 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
– Royalty Enbrel 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 Royalty Enbrel products
– To increase the profitability and margins on the products, Royalty Enbrel needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Royalty Enbrel 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Massachusetts General Hospital and the Enbrel Royalty, is just above the industry average. Royalty Enbrel 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.
Opportunities Massachusetts General Hospital and the Enbrel Royalty | 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 Massachusetts General Hospital and the Enbrel Royalty are -
Better consumer reach
– The expansion of the 5G network will help Royalty Enbrel to increase its market reach. Royalty Enbrel 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.
Buying journey improvements
– Royalty Enbrel can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Massachusetts General Hospital and the Enbrel Royalty 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Royalty Enbrel can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Royalty Enbrel 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.
Leveraging digital technologies
– Royalty Enbrel 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Royalty Enbrel is facing challenges because of the dominance of functional experts in the organization. Massachusetts General Hospital and the Enbrel Royalty 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.
Creating value in data economy
– The success of analytics program of Royalty Enbrel has opened avenues for new revenue streams for the organization in the industry. This can help Royalty Enbrel to build a more holistic ecosystem as suggested in the Massachusetts General Hospital and the Enbrel Royalty case study. Royalty Enbrel can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Royalty Enbrel can use these opportunities to build new business models that can help the communities that Royalty Enbrel operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Royalty Enbrel can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Royalty Enbrel in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Developing new processes and practices
– Royalty Enbrel can develop new processes and procedures in Finance & Accounting 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 Royalty Enbrel 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 Royalty Enbrel to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Royalty Enbrel 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 Finance & Accounting segment.
Threats Massachusetts General Hospital and the Enbrel Royalty External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Massachusetts General Hospital and the Enbrel Royalty are -
High dependence on third party suppliers
– Royalty Enbrel 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.
Shortening product life cycle
– it is one of the major threat that Royalty Enbrel is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Royalty Enbrel in the Finance & Accounting industry. The Finance & Accounting 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, Royalty Enbrel 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 Massachusetts General Hospital and the Enbrel Royalty .
Consumer confidence and its impact on Royalty Enbrel 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Royalty Enbrel with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Massachusetts General Hospital and the Enbrel Royalty, Royalty Enbrel may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
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 Royalty Enbrel business can come under increasing regulations regarding data privacy, data security, etc.
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.
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 Royalty Enbrel in the Finance & Accounting sector and impact the bottomline of the organization.
Increasing wage structure of Royalty Enbrel
– 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 Royalty Enbrel.
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. Royalty Enbrel needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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 Massachusetts General Hospital and the Enbrel Royalty 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 Massachusetts General Hospital and the Enbrel Royalty 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 Massachusetts General Hospital and the Enbrel Royalty 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 Massachusetts General Hospital and the Enbrel Royalty 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 Massachusetts General Hospital and the Enbrel Royalty 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 Royalty Enbrel needs to make to build a sustainable competitive advantage.
