SWOT Analysis / TOWS Matrix for Ipca Laboratories (India)
Based on various researches at Oak Spring University , Ipca Laboratories is operating in a macro-environment that has been destablized by – increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, supply chains are disrupted by pandemic , there is backlash against globalization, technology disruption, increasing transportation and logistics costs,
central banks are concerned over increasing inflation, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Ipca Laboratories
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Ipca Laboratories can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ipca Laboratories, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ipca Laboratories 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 Ipca Laboratories can be done for the following purposes –
1. Strategic planning of Ipca Laboratories
2. Improving business portfolio management of Ipca Laboratories
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 Ipca Laboratories
Strengths of Ipca Laboratories | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ipca Laboratories are -
Superior customer experience
– The customer experience strategy of Ipca Laboratories in Biotechnology & Drugs industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Ipca Laboratories 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 Ipca Laboratories is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Ipca Laboratories emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Ipca Laboratories in the Healthcare sector have low bargaining power. Ipca Laboratories has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ipca Laboratories to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Biotechnology & Drugs
– Ipca Laboratories 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 Ipca Laboratories in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Ipca Laboratories is one of the most innovative firm in Biotechnology & Drugs sector.
High switching costs
– The high switching costs that Ipca Laboratories 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)
– Ipca Laboratories has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Ipca Laboratories 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.
Successful track record of launching new products
– Ipca Laboratories has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ipca Laboratories 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.
Digital Transformation in Biotechnology & Drugs industry
- digital transformation varies from industry to industry. For Ipca Laboratories digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ipca Laboratories 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.
Strong track record of project management in the Biotechnology & Drugs industry
– Ipca Laboratories is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Ipca Laboratories
– The covid-19 pandemic has put organizational resilience at the centre of everthing Ipca Laboratories does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Ipca Laboratories has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Biotechnology & Drugs industry. Secondly the value chain collaborators of Ipca Laboratories have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses of Ipca Laboratories | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ipca Laboratories are -
High dependence on Ipca Laboratories ‘s star products
– The top 2 products and services of Ipca Laboratories still accounts for major business revenue. This dependence on star products in Biotechnology & Drugs industry has resulted into insufficient focus on developing new products, even though Ipca Laboratories has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative at Ipca Laboratories, in the dynamic environment of Biotechnology & Drugs industry it has struggled to respond to the nimble upstart competition. Ipca Laboratories has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though Ipca Laboratories 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. Ipca Laboratories should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the Biotechnology & Drugs industry, Ipca Laboratories 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.
Low market penetration in new markets
– Outside its home market of India, Ipca Laboratories needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Ipca Laboratories 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ipca Laboratories is slow explore the new channels of communication. These new channels of communication can help Ipca Laboratories to provide better information regarding Biotechnology & Drugs products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Ipca Laboratories products
– To increase the profitability and margins on the products, Ipca Laboratories needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners in Biotechnology & Drugs industry
– because of the regulatory requirements in India, Ipca Laboratories 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.
Skills based hiring in Biotechnology & Drugs industry
– The stress on hiring functional specialists at Ipca Laboratories 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.
Interest costs
– Compare to the competition, Ipca Laboratories 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.
Ipca Laboratories Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Ipca Laboratories are -
Using analytics as competitive advantage
– Ipca Laboratories has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Biotechnology & Drugs sector. This continuous investment in analytics has enabled Ipca Laboratories to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ipca Laboratories to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Use of Bitcoin and other crypto currencies for transactions in Biotechnology & Drugs industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Ipca Laboratories in the Biotechnology & Drugs industry. Now Ipca Laboratories can target international markets with far fewer capital restrictions requirements than the existing system.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Ipca Laboratories to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Better consumer reach
– The expansion of the 5G network will help Ipca Laboratories to increase its market reach. Ipca Laboratories 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 Ipca Laboratories 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.
Learning at scale
– Online learning technologies has now opened space for Ipca Laboratories to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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. Ipca Laboratories 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. Ipca Laboratories can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ipca Laboratories can use these opportunities to build new business models that can help the communities that Ipca Laboratories operates in. Secondly it can use opportunities from government spending in Biotechnology & Drugs sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ipca Laboratories 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 Ipca Laboratories to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Ipca Laboratories can use the latest technology developments to improve its manufacturing and designing process in Biotechnology & Drugs sector. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Building a culture of innovation
– managers at Ipca Laboratories 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.
Buying journey improvements
– Ipca Laboratories can improve the customer journey of consumers in the Biotechnology & Drugs industry by using analytics and artificial intelligence. It 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ipca Laboratories is facing challenges because of the dominance of functional experts in the organization. Ipca Laboratories 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.
Threats Ipca Laboratories External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Ipca Laboratories are -
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Ipca Laboratories business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Ipca Laboratories 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.
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. Ipca Laboratories can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Ipca Laboratories can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the Biotechnology & Drugs industry.
High dependence on third party suppliers
– Ipca Laboratories 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.
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. Ipca Laboratories needs to understand the core reasons impacting the Biotechnology & Drugs industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ipca Laboratories 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 Ipca Laboratories prominent markets.
Environmental challenges
– Ipca Laboratories 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. Ipca Laboratories can take advantage of this fund but it will also bring new competitors in the Biotechnology & Drugs industry.
Consumer confidence and its impact on Ipca Laboratories 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.
Shortening product life cycle
– it is one of the major threat that Ipca Laboratories is facing in Biotechnology & Drugs sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Ipca Laboratories has witnessed rapid integration of technology during Covid-19 in the Biotechnology & Drugs industry. As one of the leading players in the industry, Ipca Laboratories 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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ipca Laboratories in Biotechnology & Drugs industry. The Biotechnology & Drugs 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.
Weighted SWOT Analysis of Ipca Laboratories Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Ipca Laboratories 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 Ipca Laboratories 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 Ipca Laboratories 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 Ipca Laboratories 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 Ipca Laboratories needs to make to build a sustainable competitive advantage.