Santen Pharmaceutical Co Ltd (4536) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Santen Pharmaceutical Co Ltd (Japan)

Based on various researches at Oak Spring University , Santen Pharmaceutical Co Ltd is operating in a macro-environment that has been destablized by – supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, technology disruption, geopolitical disruptions, etc

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Introduction to SWOT Analysis of Santen Pharmaceutical Co Ltd

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Santen Pharmaceutical Co Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Santen Pharmaceutical Co Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Santen Pharmaceutical Co 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Santen Pharmaceutical Co Ltd can be done for the following purposes –
1. Strategic planning of Santen Pharmaceutical Co Ltd
2. Improving business portfolio management of Santen Pharmaceutical Co Ltd
3. Assessing feasibility of the new initiative in Japan
4. Making a Biotechnology & Drugs sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Santen Pharmaceutical Co Ltd

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Strengths of Santen Pharmaceutical Co Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Santen Pharmaceutical Co Ltd are -

Ability to recruit top talent

– Santen Pharmaceutical Co Ltd is one of the leading players in the Biotechnology & Drugs industry in Japan. It is in a position to attract the best talent available in Japan. The firm has a robust talent identification program that helps in identifying the brightest.

Effective Research and Development (R&D)

– Santen Pharmaceutical Co Ltd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Santen Pharmaceutical Co 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.

Diverse revenue streams

– Santen Pharmaceutical Co Ltd is present in almost all the verticals within the Biotechnology & Drugs industry. This has provided Santen Pharmaceutical Co Ltd 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.

High brand equity

– Santen Pharmaceutical Co Ltd has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Santen Pharmaceutical Co Ltd to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Cross disciplinary teams

– Horizontal connected teams at the Santen Pharmaceutical Co Ltd 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.

Low bargaining power of suppliers

– Suppliers of Santen Pharmaceutical Co Ltd in the Healthcare sector have low bargaining power. Santen Pharmaceutical Co Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Santen Pharmaceutical Co Ltd to manage not only supply disruptions but also source products at highly competitive prices.

Learning organization

- Santen Pharmaceutical Co 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 Santen Pharmaceutical Co Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Santen Pharmaceutical Co Ltd emphasize – knowledge, initiative, and innovation.

Analytics focus

– Santen Pharmaceutical Co Ltd is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the Biotechnology & Drugs industry. The technology infrastructure of Japan is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.

Innovation driven organization

– Santen Pharmaceutical Co Ltd is one of the most innovative firm in Biotechnology & Drugs sector.

Successful track record of launching new products

– Santen Pharmaceutical Co Ltd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Santen Pharmaceutical Co Ltd 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.

Training and development

– Santen Pharmaceutical Co 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.

Highly skilled collaborators

– Santen Pharmaceutical Co Ltd 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 Santen Pharmaceutical Co Ltd have helped the firm to develop new products and bring them quickly to the marketplace.

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Weaknesses of Santen Pharmaceutical Co Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Santen Pharmaceutical Co Ltd are -

High dependence on Santen Pharmaceutical Co Ltd ‘s star products

– The top 2 products and services of Santen Pharmaceutical Co Ltd 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 Santen Pharmaceutical Co Ltd has relatively successful track record of launching new products.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Santen Pharmaceutical Co Ltd is slow explore the new channels of communication. These new channels of communication can help Santen Pharmaceutical Co Ltd to provide better information regarding Biotechnology & Drugs products and services. It can also build an online community to further reach out to potential customers.

High bargaining power of channel partners in Biotechnology & Drugs industry

– because of the regulatory requirements in Japan, Santen Pharmaceutical Co 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.

Interest costs

– Compare to the competition, Santen Pharmaceutical Co Ltd 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.

No frontier risks strategy

– From the 10K / annual statement of Santen Pharmaceutical Co 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.

Products dominated business model

– Even though Santen Pharmaceutical Co 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. Santen Pharmaceutical Co Ltd should strive to include more intangible value offerings along with its core products and services.

Lack of clear differentiation of Santen Pharmaceutical Co Ltd products

– To increase the profitability and margins on the products, Santen Pharmaceutical Co Ltd needs to provide more differentiated products than what it is currently offering in the marketplace.

High operating costs

– Compare to the competitors, Santen Pharmaceutical Co 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 Santen Pharmaceutical Co Ltd lucrative customers.

Employees’ less understanding of Santen Pharmaceutical Co Ltd strategy

– From the outside it seems that the employees of Santen Pharmaceutical Co Ltd 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.

Need for greater diversity

– Santen Pharmaceutical Co 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.

Compensation and incentives

– The revenue per employee of Santen Pharmaceutical Co Ltd is just above the Biotechnology & 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.

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Santen Pharmaceutical Co Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Santen Pharmaceutical Co Ltd are -

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Santen Pharmaceutical Co Ltd can use these opportunities to build new business models that can help the communities that Santen Pharmaceutical Co Ltd operates in. Secondly it can use opportunities from government spending in Biotechnology & Drugs sector.

Buying journey improvements

– Santen Pharmaceutical Co Ltd 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.

Building a culture of innovation

– managers at Santen Pharmaceutical Co 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Santen Pharmaceutical Co 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 Santen Pharmaceutical Co 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.

Creating value in data economy

– The success of analytics program of Santen Pharmaceutical Co Ltd has opened avenues for new revenue streams for the organization in Biotechnology & Drugs industry. This can help Santen Pharmaceutical Co Ltd to build a more holistic ecosystem for Santen Pharmaceutical Co Ltd products in the Biotechnology & Drugs industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Better consumer reach

– The expansion of the 5G network will help Santen Pharmaceutical Co Ltd to increase its market reach. Santen Pharmaceutical Co 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Santen Pharmaceutical Co Ltd is facing challenges because of the dominance of functional experts in the organization. Santen Pharmaceutical Co 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.

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. Santen Pharmaceutical Co 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. Santen Pharmaceutical Co 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.

Leveraging digital technologies

– Santen Pharmaceutical Co 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.

Learning at scale

– Online learning technologies has now opened space for Santen Pharmaceutical Co Ltd 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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Santen Pharmaceutical Co 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 Santen Pharmaceutical Co Ltd to hire the very best people irrespective of their geographical location.

Using analytics as competitive advantage

– Santen Pharmaceutical Co Ltd 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 Santen Pharmaceutical Co Ltd to build a competitive advantage using analytics. The analytics driven competitive advantage can help Santen Pharmaceutical Co Ltd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

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 Santen Pharmaceutical Co Ltd 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.

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Threats Santen Pharmaceutical Co Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Santen Pharmaceutical Co Ltd are -

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Santen Pharmaceutical Co 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 wage structure of Santen Pharmaceutical Co 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 Santen Pharmaceutical Co Ltd.

Regulatory challenges

– Santen Pharmaceutical Co Ltd 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 Biotechnology & Drugs industry regulations.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Biotechnology & Drugs industry are lowering. It can presents Santen Pharmaceutical Co Ltd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the 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. Santen Pharmaceutical Co Ltd can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Technology acceleration in Forth Industrial Revolution

– Santen Pharmaceutical Co Ltd has witnessed rapid integration of technology during Covid-19 in the Biotechnology & Drugs industry. As one of the leading players in the industry, Santen Pharmaceutical Co 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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Santen Pharmaceutical Co Ltd 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.

Environmental challenges

– Santen Pharmaceutical Co Ltd 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. Santen Pharmaceutical Co Ltd can take advantage of this fund but it will also bring new competitors in the Biotechnology & Drugs industry.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Santen Pharmaceutical Co 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 Santen Pharmaceutical Co Ltd prominent markets.

Shortening product life cycle

– it is one of the major threat that Santen Pharmaceutical Co Ltd is facing in Biotechnology & Drugs sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Capital market disruption

– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Santen Pharmaceutical Co Ltd.

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.

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.

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Weighted SWOT Analysis of Santen Pharmaceutical Co Ltd Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Santen Pharmaceutical Co 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 Santen Pharmaceutical Co 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 Santen Pharmaceutical Co 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 Santen Pharmaceutical Co 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 Santen Pharmaceutical Co Ltd needs to make to build a sustainable competitive advantage.

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