STAR Pharmaceutical Ltd (SRPT) SWOT Analysis / TOWS Matrix / MBA Resources
Major Drugs
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for STAR Pharmaceutical Ltd (Singapore)
Based on various researches at Oak Spring University , STAR Pharmaceutical Ltd is operating in a macro-environment that has been destablized by – geopolitical disruptions, challanges to central banks by blockchain based private currencies, wage bills are increasing, there is backlash against globalization, increasing energy prices, central banks are concerned over increasing inflation, increasing commodity prices,
increasing transportation and logistics costs, technology disruption, etc
Introduction to SWOT Analysis of STAR Pharmaceutical Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that STAR Pharmaceutical Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the STAR Pharmaceutical Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which STAR Pharmaceutical 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 STAR Pharmaceutical Ltd can be done for the following purposes –
1. Strategic planning of STAR Pharmaceutical Ltd
2. Improving business portfolio management of STAR Pharmaceutical Ltd
3. Assessing feasibility of the new initiative in Singapore
4. Making a Major Drugs sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of STAR Pharmaceutical Ltd
Strengths of STAR Pharmaceutical Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of STAR Pharmaceutical Ltd are -
High switching costs
– The high switching costs that STAR Pharmaceutical 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.
Organizational Resilience of STAR Pharmaceutical Ltd
– The covid-19 pandemic has put organizational resilience at the centre of everthing STAR Pharmaceutical Ltd does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– STAR Pharmaceutical Ltd is present in almost all the verticals within the Major Drugs industry. This has provided STAR Pharmaceutical 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.
Strong track record of project management in the Major Drugs industry
– STAR Pharmaceutical Ltd is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– STAR Pharmaceutical Ltd is one of the leading players in the Major Drugs industry in Singapore. It is in a position to attract the best talent available in Singapore. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Major Drugs industry
– STAR Pharmaceutical Ltd has clearly differentiated products in the market place. This has enabled STAR Pharmaceutical Ltd to fetch slight price premium compare to the competitors in the Major Drugs industry. The sustainable margins have also helped STAR Pharmaceutical Ltd to invest into research and development (R&D) and innovation.
Ability to lead change in Major Drugs
– STAR Pharmaceutical Ltd is one of the leading players in the Major Drugs industry in Singapore. Over the years it has not only transformed the business landscape in the Major Drugs industry in Singapore but also across the existing markets. The ability to lead change has enabled STAR Pharmaceutical Ltd in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– STAR Pharmaceutical Ltd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – STAR Pharmaceutical Ltd staying ahead in the Major Drugs industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the STAR Pharmaceutical 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.
Analytics focus
– STAR Pharmaceutical 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 Major Drugs industry. The technology infrastructure of Singapore 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.
Training and development
– STAR Pharmaceutical 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.
Learning organization
- STAR Pharmaceutical 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 STAR Pharmaceutical Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at STAR Pharmaceutical Ltd emphasize – knowledge, initiative, and innovation.
Weaknesses of STAR Pharmaceutical Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of STAR Pharmaceutical Ltd are -
Workers concerns about automation
– As automation is fast increasing in the Major Drugs industry, STAR Pharmaceutical 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.
Interest costs
– Compare to the competition, STAR Pharmaceutical 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.
High operating costs
– Compare to the competitors, STAR Pharmaceutical Ltd has high operating costs in the Major Drugs industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract STAR Pharmaceutical Ltd lucrative customers.
Lack of clear differentiation of STAR Pharmaceutical Ltd products
– To increase the profitability and margins on the products, STAR Pharmaceutical Ltd needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As STAR Pharmaceutical Ltd is one of the leading players in the Major Drugs industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Major Drugs industry in last five years.
Products dominated business model
– Even though STAR Pharmaceutical Ltd has some of the most successful models in the Major Drugs industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. STAR Pharmaceutical Ltd should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– From the outside it seems that STAR Pharmaceutical Ltd needs to have more collaboration between its sales team and marketing team. Sales professionals in the Major Drugs industry have deep experience in developing customer relationships. Marketing department at STAR Pharmaceutical Ltd can leverage the sales team experience to cultivate customer relationships as STAR Pharmaceutical Ltd is planning to shift buying processes online.
High bargaining power of channel partners in Major Drugs industry
– because of the regulatory requirements in Singapore, STAR Pharmaceutical 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 Major Drugs industry.
No frontier risks strategy
– From the 10K / annual statement of STAR Pharmaceutical Ltd, it seems that company is thinking out the frontier risks that can impact Major 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.
Skills based hiring in Major Drugs industry
– The stress on hiring functional specialists at STAR Pharmaceutical 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.
Employees’ less understanding of STAR Pharmaceutical Ltd strategy
– From the outside it seems that the employees of STAR Pharmaceutical 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.
STAR Pharmaceutical Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of STAR Pharmaceutical Ltd are -
Loyalty marketing
– STAR Pharmaceutical 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Major Drugs industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. STAR Pharmaceutical 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. STAR Pharmaceutical 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.
Buying journey improvements
– STAR Pharmaceutical Ltd can improve the customer journey of consumers in the Major 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Major Drugs industry, but it has also influenced the consumer preferences. STAR Pharmaceutical Ltd can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of STAR Pharmaceutical Ltd has opened avenues for new revenue streams for the organization in Major Drugs industry. This can help STAR Pharmaceutical Ltd to build a more holistic ecosystem for STAR Pharmaceutical Ltd products in the Major Drugs industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– STAR Pharmaceutical 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.
Manufacturing automation
– STAR Pharmaceutical Ltd can use the latest technology developments to improve its manufacturing and designing process in Major 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, STAR Pharmaceutical Ltd can use these opportunities to build new business models that can help the communities that STAR Pharmaceutical Ltd operates in. Secondly it can use opportunities from government spending in Major Drugs sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, STAR Pharmaceutical Ltd is facing challenges because of the dominance of functional experts in the organization. STAR Pharmaceutical Ltd can utilize new technology in the field of Major Drugs industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, STAR Pharmaceutical Ltd 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.
Use of Bitcoin and other crypto currencies for transactions in Major Drugs industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for STAR Pharmaceutical Ltd in the Major Drugs industry. Now STAR Pharmaceutical Ltd can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at STAR Pharmaceutical 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 Major Drugs industry.
Developing new processes and practices
– STAR Pharmaceutical Ltd can develop new processes and procedures in Major 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.
Threats STAR Pharmaceutical Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of STAR Pharmaceutical Ltd are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for STAR Pharmaceutical Ltd in Major Drugs industry. The Major 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.
Consumer confidence and its impact on STAR Pharmaceutical 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 Major Drugs industry and other sectors.
High dependence on third party suppliers
– STAR Pharmaceutical Ltd 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Major Drugs industry are lowering. It can presents STAR Pharmaceutical Ltd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Major Drugs sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, STAR Pharmaceutical 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 Major Drugs sector.
Stagnating economy with rate increase
– STAR Pharmaceutical Ltd 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 Major Drugs industry.
Increasing wage structure of STAR Pharmaceutical 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 STAR Pharmaceutical Ltd.
Technology acceleration in Forth Industrial Revolution
– STAR Pharmaceutical Ltd has witnessed rapid integration of technology during Covid-19 in the Major Drugs industry. As one of the leading players in the industry, STAR Pharmaceutical Ltd needs to keep up with the evolution of technology in the Major 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.
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.
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 STAR Pharmaceutical Ltd.
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 STAR Pharmaceutical Ltd in the Major Drugs sector and impact the bottomline of the organization.
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. STAR Pharmaceutical Ltd 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.
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.
Weighted SWOT Analysis of STAR Pharmaceutical Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at STAR Pharmaceutical 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 STAR Pharmaceutical 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 STAR Pharmaceutical 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 STAR Pharmaceutical 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 STAR Pharmaceutical Ltd needs to make to build a sustainable competitive advantage.