SWOT Analysis / TOWS Matrix for Millennium Pharma (Indonesia)
Based on various researches at Oak Spring University , Millennium Pharma is operating in a macro-environment that has been destablized by – increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, wage bills are increasing, increasing government debt because of Covid-19 spendings,
digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Millennium Pharma
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Millennium Pharma can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Millennium Pharma, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Millennium Pharma 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 Millennium Pharma can be done for the following purposes –
1. Strategic planning of Millennium Pharma
2. Improving business portfolio management of Millennium Pharma
3. Assessing feasibility of the new initiative in Indonesia
4. Making a Retail (Drugs) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Millennium Pharma
Strengths of Millennium Pharma | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Millennium Pharma are -
Organizational Resilience of Millennium Pharma
– The covid-19 pandemic has put organizational resilience at the centre of everthing Millennium Pharma does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Retail (Drugs) industry
- digital transformation varies from industry to industry. For Millennium Pharma digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Millennium Pharma 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.
Successful track record of launching new products
– Millennium Pharma has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Millennium Pharma 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.
Cross disciplinary teams
– Horizontal connected teams at the Millennium Pharma 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.
Operational resilience
– The operational resilience strategy of Millennium Pharma comprises – understanding the underlying the factors in the Retail (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.
Diverse revenue streams
– Millennium Pharma is present in almost all the verticals within the Retail (Drugs) industry. This has provided Millennium Pharma 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.
Ability to recruit top talent
– Millennium Pharma is one of the leading players in the Retail (Drugs) industry in Indonesia. It is in a position to attract the best talent available in Indonesia. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Millennium Pharma has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Retail (Drugs) industry. Secondly the value chain collaborators of Millennium Pharma have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Millennium Pharma is one of the most innovative firm in Retail (Drugs) sector.
Sustainable margins compare to other players in Retail (Drugs) industry
– Millennium Pharma has clearly differentiated products in the market place. This has enabled Millennium Pharma to fetch slight price premium compare to the competitors in the Retail (Drugs) industry. The sustainable margins have also helped Millennium Pharma to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Millennium Pharma has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Millennium Pharma staying ahead in the Retail (Drugs) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Millennium Pharma has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Millennium Pharma to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of Millennium Pharma | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Millennium Pharma are -
Interest costs
– Compare to the competition, Millennium Pharma 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.
Capital Spending Reduction
– Even during the low interest decade, Millennium Pharma 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 Retail (Drugs) industry using digital technology.
Compensation and incentives
– The revenue per employee of Millennium Pharma is just above the Retail (Drugs) industry average. It 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.
Need for greater diversity
– Millennium Pharma 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.
Slow decision making process
– As mentioned earlier in the report, Millennium Pharma has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Retail (Drugs) industry over the last five years. Millennium Pharma 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.
Aligning sales with marketing
– From the outside it seems that Millennium Pharma needs to have more collaboration between its sales team and marketing team. Sales professionals in the Retail (Drugs) industry have deep experience in developing customer relationships. Marketing department at Millennium Pharma can leverage the sales team experience to cultivate customer relationships as Millennium Pharma is planning to shift buying processes online.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Millennium Pharma supply chain. Even after few cautionary changes, Millennium Pharma is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Millennium Pharma vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Millennium Pharma is one of the leading players in the Retail (Drugs) industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Retail (Drugs) industry in last five years.
Skills based hiring in Retail (Drugs) industry
– The stress on hiring functional specialists at Millennium Pharma 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.
Ability to respond to the competition
– As the decision making is very deliberative at Millennium Pharma, in the dynamic environment of Retail (Drugs) industry it has struggled to respond to the nimble upstart competition. Millennium Pharma has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Millennium Pharma is slow explore the new channels of communication. These new channels of communication can help Millennium Pharma to provide better information regarding Retail (Drugs) products and services. It can also build an online community to further reach out to potential customers.
Millennium Pharma Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Millennium Pharma are -
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 Millennium Pharma 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.
Use of Bitcoin and other crypto currencies for transactions in Retail (Drugs) industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Millennium Pharma in the Retail (Drugs) industry. Now Millennium Pharma can target international markets with far fewer capital restrictions requirements than the existing system.
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. Millennium Pharma can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Millennium Pharma 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 Retail (Drugs) industry.
Using analytics as competitive advantage
– Millennium Pharma has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Retail (Drugs) sector. This continuous investment in analytics has enabled Millennium Pharma to build a competitive advantage using analytics. The analytics driven competitive advantage can help Millennium Pharma to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Millennium Pharma can improve the customer journey of consumers in the Retail (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.
Leveraging digital technologies
– Millennium Pharma 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.
Learning at scale
– Online learning technologies has now opened space for Millennium Pharma 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 Retail (Drugs) industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Millennium Pharma 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. Millennium Pharma 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.
Creating value in data economy
– The success of analytics program of Millennium Pharma has opened avenues for new revenue streams for the organization in Retail (Drugs) industry. This can help Millennium Pharma to build a more holistic ecosystem for Millennium Pharma products in the Retail (Drugs) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Millennium Pharma in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Retail (Drugs) industry, and it will provide faster access to the consumers.
Developing new processes and practices
– Millennium Pharma can develop new processes and procedures in Retail (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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Millennium Pharma 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.
Threats Millennium Pharma External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Millennium Pharma 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 Millennium Pharma business can come under increasing regulations regarding data privacy, data security, etc.
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 Millennium Pharma in the Retail (Drugs) sector and impact the bottomline of the organization.
Consumer confidence and its impact on Millennium Pharma 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 Retail (Drugs) industry and other sectors.
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. Millennium Pharma 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Retail (Drugs) industry are lowering. It can presents Millennium Pharma with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Retail (Drugs) sector.
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. Millennium Pharma needs to understand the core reasons impacting the Retail (Drugs) industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Millennium Pharma may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Retail (Drugs) sector.
Stagnating economy with rate increase
– Millennium Pharma 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 Retail (Drugs) industry.
High dependence on third party suppliers
– Millennium Pharma 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.
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 Millennium Pharma.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Millennium Pharma 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 Millennium Pharma prominent markets.
Regulatory challenges
– Millennium Pharma 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 Retail (Drugs) industry regulations.
Easy access to finance
– Easy access to finance in Retail (Drugs) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Millennium Pharma can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Millennium Pharma Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Millennium Pharma 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 Millennium Pharma 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 Millennium Pharma 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 Millennium Pharma 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 Millennium Pharma needs to make to build a sustainable competitive advantage.