SWOT Analysis / TOWS Matrix for Aspen Pharmacare Holdings (South Africa)
Based on various researches at Oak Spring University , Aspen Pharmacare Holdings is operating in a macro-environment that has been destablized by – increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, wage bills are increasing, increasing household debt because of falling income levels,
geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Aspen Pharmacare Holdings
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Aspen Pharmacare Holdings can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Aspen Pharmacare Holdings, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Aspen Pharmacare Holdings 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 Aspen Pharmacare Holdings can be done for the following purposes –
1. Strategic planning of Aspen Pharmacare Holdings
2. Improving business portfolio management of Aspen Pharmacare Holdings
3. Assessing feasibility of the new initiative in South Africa
4. Making a Biotechnology & Drugs sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Aspen Pharmacare Holdings
Strengths of Aspen Pharmacare Holdings | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Aspen Pharmacare Holdings are -
Low bargaining power of suppliers
– Suppliers of Aspen Pharmacare Holdings in the Healthcare sector have low bargaining power. Aspen Pharmacare Holdings has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Aspen Pharmacare Holdings to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Aspen Pharmacare Holdings 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 Aspen Pharmacare Holdings is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Aspen Pharmacare Holdings emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Aspen Pharmacare Holdings 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 Aspen Pharmacare Holdings have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Biotechnology & Drugs industry
- digital transformation varies from industry to industry. For Aspen Pharmacare Holdings digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Aspen Pharmacare Holdings 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.
Ability to lead change in Biotechnology & Drugs
– Aspen Pharmacare Holdings is one of the leading players in the Biotechnology & Drugs industry in South Africa. Over the years it has not only transformed the business landscape in the Biotechnology & Drugs industry in South Africa but also across the existing markets. The ability to lead change has enabled Aspen Pharmacare Holdings in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Aspen Pharmacare Holdings has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Aspen Pharmacare Holdings to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy of Aspen Pharmacare Holdings comprises – understanding the underlying the factors in the Biotechnology & Drugs industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Effective Research and Development (R&D)
– Aspen Pharmacare Holdings has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Aspen Pharmacare Holdings 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
– Aspen Pharmacare Holdings is present in almost all the verticals within the Biotechnology & Drugs industry. This has provided Aspen Pharmacare Holdings 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.
Cross disciplinary teams
– Horizontal connected teams at the Aspen Pharmacare Holdings 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.
Innovation driven organization
– Aspen Pharmacare Holdings is one of the most innovative firm in Biotechnology & Drugs sector.
High switching costs
– The high switching costs that Aspen Pharmacare Holdings has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Weaknesses of Aspen Pharmacare Holdings | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Aspen Pharmacare Holdings are -
Aligning sales with marketing
– From the outside it seems that Aspen Pharmacare Holdings needs to have more collaboration between its sales team and marketing team. Sales professionals in the Biotechnology & Drugs industry have deep experience in developing customer relationships. Marketing department at Aspen Pharmacare Holdings can leverage the sales team experience to cultivate customer relationships as Aspen Pharmacare Holdings is planning to shift buying processes online.
Employees’ less understanding of Aspen Pharmacare Holdings strategy
– From the outside it seems that the employees of Aspen Pharmacare Holdings 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.
High operating costs
– Compare to the competitors, Aspen Pharmacare Holdings 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 Aspen Pharmacare Holdings lucrative customers.
Low market penetration in new markets
– Outside its home market of South Africa, Aspen Pharmacare Holdings needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the Biotechnology & Drugs industry, Aspen Pharmacare Holdings 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.
Increasing silos among functional specialists
– The organizational structure of Aspen Pharmacare Holdings is dominated by functional specialists. It is not different from other players in the Biotechnology & Drugs industry, but Aspen Pharmacare Holdings needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Aspen Pharmacare Holdings to focus more on services in the Biotechnology & Drugs industry rather than just following the product oriented approach.
High bargaining power of channel partners in Biotechnology & Drugs industry
– because of the regulatory requirements in South Africa, Aspen Pharmacare Holdings 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.
High cash cycle compare to competitors
Aspen Pharmacare Holdings 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.
High dependence on Aspen Pharmacare Holdings ‘s star products
– The top 2 products and services of Aspen Pharmacare Holdings 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 Aspen Pharmacare Holdings has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Aspen Pharmacare Holdings 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, Aspen Pharmacare Holdings has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the Biotechnology & Drugs industry using digital technology.
Aspen Pharmacare Holdings Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Aspen Pharmacare Holdings are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Aspen Pharmacare Holdings is facing challenges because of the dominance of functional experts in the organization. Aspen Pharmacare Holdings 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.
Loyalty marketing
– Aspen Pharmacare Holdings 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.
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. Aspen Pharmacare Holdings can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Aspen Pharmacare Holdings 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.
Learning at scale
– Online learning technologies has now opened space for Aspen Pharmacare Holdings 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.
Manufacturing automation
– Aspen Pharmacare Holdings 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Aspen Pharmacare Holdings 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 Aspen Pharmacare Holdings to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Aspen Pharmacare Holdings can use these opportunities to build new business models that can help the communities that Aspen Pharmacare Holdings operates in. Secondly it can use opportunities from government spending in Biotechnology & Drugs sector.
Buying journey improvements
– Aspen Pharmacare Holdings 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 Aspen Pharmacare Holdings 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.
Using analytics as competitive advantage
– Aspen Pharmacare Holdings 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 Aspen Pharmacare Holdings to build a competitive advantage using analytics. The analytics driven competitive advantage can help Aspen Pharmacare Holdings to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Aspen Pharmacare Holdings 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 Aspen Pharmacare Holdings to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Aspen Pharmacare Holdings 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.
Threats Aspen Pharmacare Holdings External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Aspen Pharmacare Holdings are -
Stagnating economy with rate increase
– Aspen Pharmacare Holdings 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Aspen Pharmacare Holdings 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.
Consumer confidence and its impact on Aspen Pharmacare Holdings 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.
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 Aspen Pharmacare Holdings.
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 Aspen Pharmacare Holdings business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Aspen Pharmacare Holdings is facing in Biotechnology & Drugs sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Aspen Pharmacare Holdings 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Aspen Pharmacare Holdings 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 Aspen Pharmacare Holdings prominent markets.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Aspen Pharmacare Holdings 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.
Technology acceleration in Forth Industrial Revolution
– Aspen Pharmacare Holdings has witnessed rapid integration of technology during Covid-19 in the Biotechnology & Drugs industry. As one of the leading players in the industry, Aspen Pharmacare Holdings 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.
Regulatory challenges
– Aspen Pharmacare Holdings 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.
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.
Environmental challenges
– Aspen Pharmacare Holdings 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. Aspen Pharmacare Holdings can take advantage of this fund but it will also bring new competitors in the Biotechnology & Drugs industry.
Weighted SWOT Analysis of Aspen Pharmacare Holdings Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Aspen Pharmacare Holdings 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 Aspen Pharmacare Holdings 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 Aspen Pharmacare Holdings 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 Aspen Pharmacare Holdings 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 Aspen Pharmacare Holdings needs to make to build a sustainable competitive advantage.
