SWOT Analysis / TOWS Matrix for Alembic Pharmaceuticals Ltd (India)
Based on various researches at Oak Spring University , Alembic Pharmaceuticals Ltd is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, increasing commodity prices, technology disruption,
increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Alembic Pharmaceuticals Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Alembic Pharmaceuticals Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Alembic Pharmaceuticals Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Alembic Pharmaceuticals Ltd 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 Alembic Pharmaceuticals Ltd can be done for the following purposes –
1. Strategic planning of Alembic Pharmaceuticals Ltd
2. Improving business portfolio management of Alembic Pharmaceuticals Ltd
3. Assessing feasibility of the new initiative in India
4. Making a Biotechnology & Drugs sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Alembic Pharmaceuticals Ltd
Strengths of Alembic Pharmaceuticals Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Alembic Pharmaceuticals Ltd are -
Training and development
– Alembic Pharmaceuticals Ltd has one of the best training and development program in Healthcare industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Superior customer experience
– The customer experience strategy of Alembic Pharmaceuticals Ltd in Biotechnology & Drugs industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Alembic Pharmaceuticals Ltd in the Healthcare sector have low bargaining power. Alembic Pharmaceuticals Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Alembic Pharmaceuticals Ltd to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Alembic Pharmaceuticals Ltd is one of the leading players in the Biotechnology & Drugs industry in India. It is in a position to attract the best talent available in India. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Alembic Pharmaceuticals Ltd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Alembic Pharmaceuticals Ltd staying ahead in the Biotechnology & Drugs industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Alembic Pharmaceuticals Ltd 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 Alembic Pharmaceuticals Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Alembic Pharmaceuticals Ltd emphasize – knowledge, initiative, and innovation.
Digital Transformation in Biotechnology & Drugs industry
- digital transformation varies from industry to industry. For Alembic Pharmaceuticals Ltd digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Alembic Pharmaceuticals Ltd 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.
Sustainable margins compare to other players in Biotechnology & Drugs industry
– Alembic Pharmaceuticals Ltd has clearly differentiated products in the market place. This has enabled Alembic Pharmaceuticals Ltd to fetch slight price premium compare to the competitors in the Biotechnology & Drugs industry. The sustainable margins have also helped Alembic Pharmaceuticals Ltd to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy of Alembic Pharmaceuticals Ltd comprises – understanding the underlying the factors in the Biotechnology & Drugs 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.
High brand equity
– Alembic Pharmaceuticals Ltd has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Alembic Pharmaceuticals Ltd to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Biotechnology & Drugs
– Alembic Pharmaceuticals Ltd is one of the leading players in the Biotechnology & Drugs industry in India. Over the years it has not only transformed the business landscape in the Biotechnology & Drugs industry in India but also across the existing markets. The ability to lead change has enabled Alembic Pharmaceuticals Ltd in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Alembic Pharmaceuticals Ltd 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.
Weaknesses of Alembic Pharmaceuticals Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Alembic Pharmaceuticals Ltd are -
Workers concerns about automation
– As automation is fast increasing in the Biotechnology & Drugs industry, Alembic Pharmaceuticals Ltd 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.
No frontier risks strategy
– From the 10K / annual statement of Alembic Pharmaceuticals Ltd, it seems that company is thinking out the frontier risks that can impact Biotechnology & Drugs industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High operating costs
– Compare to the competitors, Alembic Pharmaceuticals Ltd has high operating costs in the Biotechnology & Drugs industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Alembic Pharmaceuticals Ltd lucrative customers.
High cash cycle compare to competitors
Alembic Pharmaceuticals Ltd has a high cash cycle compare to other players in the Biotechnology & Drugs industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Capital Spending Reduction
– Even during the low interest decade, Alembic Pharmaceuticals Ltd 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 Biotechnology & Drugs industry using digital technology.
Need for greater diversity
– Alembic Pharmaceuticals Ltd 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.
Products dominated business model
– Even though Alembic Pharmaceuticals Ltd has some of the most successful models in the Biotechnology & Drugs industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Alembic Pharmaceuticals Ltd should strive to include more intangible value offerings along with its core products and services.
Skills based hiring in Biotechnology & Drugs industry
– The stress on hiring functional specialists at Alembic Pharmaceuticals Ltd has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Low market penetration in new markets
– Outside its home market of India, Alembic Pharmaceuticals Ltd needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– From the outside it seems that Alembic Pharmaceuticals Ltd needs to have more collaboration between its sales team and marketing team. Sales professionals in the Biotechnology & Drugs industry have deep experience in developing customer relationships. Marketing department at Alembic Pharmaceuticals Ltd can leverage the sales team experience to cultivate customer relationships as Alembic Pharmaceuticals Ltd is planning to shift buying processes online.
High bargaining power of channel partners in Biotechnology & Drugs industry
– because of the regulatory requirements in India, Alembic Pharmaceuticals Ltd 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 Biotechnology & Drugs industry.
Alembic Pharmaceuticals Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Alembic Pharmaceuticals Ltd are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Alembic Pharmaceuticals Ltd 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 Alembic Pharmaceuticals Ltd to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Alembic Pharmaceuticals Ltd in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Biotechnology & Drugs industry, and it will provide faster access to the consumers.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Alembic Pharmaceuticals Ltd can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Biotechnology & Drugs industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Alembic Pharmaceuticals Ltd 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. Alembic Pharmaceuticals Ltd 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.
Developing new processes and practices
– Alembic Pharmaceuticals Ltd can develop new processes and procedures in Biotechnology & Drugs 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.
Leveraging digital technologies
– Alembic Pharmaceuticals Ltd 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Alembic Pharmaceuticals Ltd 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 Alembic Pharmaceuticals Ltd to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Alembic Pharmaceuticals Ltd has opened avenues for new revenue streams for the organization in Biotechnology & Drugs industry. This can help Alembic Pharmaceuticals Ltd to build a more holistic ecosystem for Alembic Pharmaceuticals Ltd products in the Biotechnology & Drugs industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Alembic Pharmaceuticals Ltd is facing challenges because of the dominance of functional experts in the organization. Alembic Pharmaceuticals Ltd can utilize new technology in the field of Biotechnology & Drugs industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Building a culture of innovation
– managers at Alembic Pharmaceuticals Ltd 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 Biotechnology & Drugs industry.
Loyalty marketing
– Alembic Pharmaceuticals Ltd 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Biotechnology & Drugs industry, but it has also influenced the consumer preferences. Alembic Pharmaceuticals Ltd can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Alembic Pharmaceuticals Ltd to increase its market reach. Alembic Pharmaceuticals Ltd 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.
Threats Alembic Pharmaceuticals Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Alembic Pharmaceuticals Ltd are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Alembic Pharmaceuticals Ltd may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Biotechnology & Drugs sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Alembic Pharmaceuticals Ltd 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 Alembic Pharmaceuticals Ltd prominent markets.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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. Alembic Pharmaceuticals Ltd needs to understand the core reasons impacting the Biotechnology & Drugs industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Alembic Pharmaceuticals Ltd is facing in Biotechnology & Drugs sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Alembic Pharmaceuticals Ltd
– 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 Alembic Pharmaceuticals Ltd.
Technology acceleration in Forth Industrial Revolution
– Alembic Pharmaceuticals Ltd has witnessed rapid integration of technology during Covid-19 in the Biotechnology & Drugs industry. As one of the leading players in the industry, Alembic Pharmaceuticals Ltd needs to keep up with the evolution of technology in the Biotechnology & Drugs 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.
Consumer confidence and its impact on Alembic Pharmaceuticals Ltd 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 Biotechnology & Drugs industry and other sectors.
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 Alembic Pharmaceuticals Ltd in the Biotechnology & Drugs sector and impact the bottomline 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 Alembic Pharmaceuticals Ltd business can come under increasing regulations regarding data privacy, data security, etc.
Easy access to finance
– Easy access to finance in Biotechnology & Drugs industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Alembic Pharmaceuticals Ltd can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Alembic Pharmaceuticals Ltd.
Weighted SWOT Analysis of Alembic Pharmaceuticals Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Alembic Pharmaceuticals Ltd 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 Alembic Pharmaceuticals Ltd 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 Alembic Pharmaceuticals Ltd 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 Alembic Pharmaceuticals Ltd 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 Alembic Pharmaceuticals Ltd needs to make to build a sustainable competitive advantage.