SWOT Analysis / TOWS Matrix for Avenue Therapeutics (United States)
Based on various researches at Oak Spring University , Avenue Therapeutics is operating in a macro-environment that has been destablized by – increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies,
digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, etc
Introduction to SWOT Analysis of Avenue Therapeutics
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Avenue Therapeutics can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Avenue Therapeutics, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Avenue Therapeutics 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 Avenue Therapeutics can be done for the following purposes –
1. Strategic planning of Avenue Therapeutics
2. Improving business portfolio management of Avenue Therapeutics
3. Assessing feasibility of the new initiative in United States
4. Making a Biotechnology & Drugs sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Avenue Therapeutics
Strengths of Avenue Therapeutics | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Avenue Therapeutics are -
Successful track record of launching new products
– Avenue Therapeutics has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Avenue Therapeutics 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.
Learning organization
- Avenue Therapeutics 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 Avenue Therapeutics is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Avenue Therapeutics emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy of Avenue Therapeutics 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.
Highly skilled collaborators
– Avenue Therapeutics 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 Avenue Therapeutics have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management in the Biotechnology & Drugs industry
– Avenue Therapeutics is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Avenue Therapeutics is one of the most innovative firm in Biotechnology & Drugs sector.
Cross disciplinary teams
– Horizontal connected teams at the Avenue Therapeutics 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.
Diverse revenue streams
– Avenue Therapeutics is present in almost all the verticals within the Biotechnology & Drugs industry. This has provided Avenue Therapeutics 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
– Avenue Therapeutics is one of the leading players in the Biotechnology & Drugs industry in United States. It is in a position to attract the best talent available in United States. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Avenue Therapeutics has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Avenue Therapeutics to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Biotechnology & Drugs industry
- digital transformation varies from industry to industry. For Avenue Therapeutics digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Avenue Therapeutics 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.
Effective Research and Development (R&D)
– Avenue Therapeutics has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Avenue Therapeutics 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.
Weaknesses of Avenue Therapeutics | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Avenue Therapeutics are -
Need for greater diversity
– Avenue Therapeutics 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 Avenue Therapeutics 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.
High cash cycle compare to competitors
Avenue Therapeutics 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.
Aligning sales with marketing
– From the outside it seems that Avenue Therapeutics 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 Avenue Therapeutics can leverage the sales team experience to cultivate customer relationships as Avenue Therapeutics is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of United States, Avenue Therapeutics needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, Avenue Therapeutics 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 Avenue Therapeutics lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Avenue Therapeutics is dominated by functional specialists. It is not different from other players in the Biotechnology & Drugs industry, but Avenue Therapeutics needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Avenue Therapeutics to focus more on services in the Biotechnology & Drugs industry rather than just following the product oriented approach.
No frontier risks strategy
– From the 10K / annual statement of Avenue Therapeutics, 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.
Skills based hiring in Biotechnology & Drugs industry
– The stress on hiring functional specialists at Avenue Therapeutics 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 Avenue Therapeutics, in the dynamic environment of Biotechnology & Drugs industry it has struggled to respond to the nimble upstart competition. Avenue Therapeutics has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Avenue Therapeutics 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.
Avenue Therapeutics Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Avenue Therapeutics are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Avenue Therapeutics 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 Avenue Therapeutics to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Avenue Therapeutics 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Avenue Therapeutics can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Avenue Therapeutics 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.
Loyalty marketing
– Avenue Therapeutics 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Biotechnology & Drugs industry, but it has also influenced the consumer preferences. Avenue Therapeutics can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Avenue Therapeutics 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Avenue Therapeutics can use these opportunities to build new business models that can help the communities that Avenue Therapeutics operates in. Secondly it can use opportunities from government spending in Biotechnology & Drugs sector.
Learning at scale
– Online learning technologies has now opened space for Avenue Therapeutics 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.
Creating value in data economy
– The success of analytics program of Avenue Therapeutics has opened avenues for new revenue streams for the organization in Biotechnology & Drugs industry. This can help Avenue Therapeutics to build a more holistic ecosystem for Avenue Therapeutics products in the Biotechnology & 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 Avenue Therapeutics 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.
Building a culture of innovation
– managers at Avenue Therapeutics 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.
Better consumer reach
– The expansion of the 5G network will help Avenue Therapeutics to increase its market reach. Avenue Therapeutics 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.
Threats Avenue Therapeutics External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Avenue Therapeutics are -
Consumer confidence and its impact on Avenue Therapeutics 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.
High dependence on third party suppliers
– Avenue Therapeutics high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Avenue Therapeutics needs to understand the core reasons impacting the Biotechnology & Drugs industry. This will help it in building a better workplace.
Regulatory challenges
– Avenue Therapeutics 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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Avenue Therapeutics 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 Avenue Therapeutics prominent markets.
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. Avenue Therapeutics 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.
Shortening product life cycle
– it is one of the major threat that Avenue Therapeutics 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 Avenue Therapeutics.
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.
Technology acceleration in Forth Industrial Revolution
– Avenue Therapeutics has witnessed rapid integration of technology during Covid-19 in the Biotechnology & Drugs industry. As one of the leading players in the industry, Avenue Therapeutics 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Avenue Therapeutics 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.
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 Avenue Therapeutics in the Biotechnology & Drugs sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Avenue Therapeutics Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Avenue Therapeutics 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 Avenue Therapeutics 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 Avenue Therapeutics 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 Avenue Therapeutics 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 Avenue Therapeutics needs to make to build a sustainable competitive advantage.
