Anavex Life Sciences (AVXL) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Anavex Life Sciences (United States)

Based on various researches at Oak Spring University , Anavex Life Sciences is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, geopolitical disruptions, supply chains are disrupted by pandemic , etc

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Introduction to SWOT Analysis of Anavex Life Sciences

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Anavex Life Sciences can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Anavex Life Sciences, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Anavex Life Sciences 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 Anavex Life Sciences can be done for the following purposes –
1. Strategic planning of Anavex Life Sciences
2. Improving business portfolio management of Anavex Life Sciences
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 Anavex Life Sciences

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Strengths of Anavex Life Sciences | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Anavex Life Sciences are -

Digital Transformation in Biotechnology & Drugs industry

- digital transformation varies from industry to industry. For Anavex Life Sciences digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Anavex Life Sciences 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.

Cross disciplinary teams

– Horizontal connected teams at the Anavex Life Sciences 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.

High brand equity

– Anavex Life Sciences has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Anavex Life Sciences to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Diverse revenue streams

– Anavex Life Sciences is present in almost all the verticals within the Biotechnology & Drugs industry. This has provided Anavex Life Sciences 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.

Sustainable margins compare to other players in Biotechnology & Drugs industry

– Anavex Life Sciences has clearly differentiated products in the market place. This has enabled Anavex Life Sciences to fetch slight price premium compare to the competitors in the Biotechnology & Drugs industry. The sustainable margins have also helped Anavex Life Sciences to invest into research and development (R&D) and innovation.

Effective Research and Development (R&D)

– Anavex Life Sciences has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Anavex Life Sciences 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.

Operational resilience

– The operational resilience strategy of Anavex Life Sciences 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.

High switching costs

– The high switching costs that Anavex Life Sciences 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.

Superior customer experience

– The customer experience strategy of Anavex Life Sciences in Biotechnology & Drugs industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Highly skilled collaborators

– Anavex Life Sciences 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 Anavex Life Sciences have helped the firm to develop new products and bring them quickly to the marketplace.

Learning organization

- Anavex Life Sciences 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 Anavex Life Sciences is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Anavex Life Sciences emphasize – knowledge, initiative, and innovation.

Innovation driven organization

– Anavex Life Sciences is one of the most innovative firm in Biotechnology & Drugs sector.

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Weaknesses of Anavex Life Sciences | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Anavex Life Sciences are -

Need for greater diversity

– Anavex Life Sciences 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.

Employees’ less understanding of Anavex Life Sciences strategy

– From the outside it seems that the employees of Anavex Life Sciences 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 dependence on existing supply chain

– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Anavex Life Sciences supply chain. Even after few cautionary changes, Anavex Life Sciences is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Anavex Life Sciences vulnerable to further global disruptions in South East Asia.

No frontier risks strategy

– From the 10K / annual statement of Anavex Life Sciences, 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.

High bargaining power of channel partners in Biotechnology & Drugs industry

– because of the regulatory requirements in United States, Anavex Life Sciences 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.

Increasing silos among functional specialists

– The organizational structure of Anavex Life Sciences is dominated by functional specialists. It is not different from other players in the Biotechnology & Drugs industry, but Anavex Life Sciences needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Anavex Life Sciences to focus more on services in the Biotechnology & Drugs industry rather than just following the product oriented approach.

Low market penetration in new markets

– Outside its home market of United States, Anavex Life Sciences needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Skills based hiring in Biotechnology & Drugs industry

– The stress on hiring functional specialists at Anavex Life Sciences 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.

High dependence on Anavex Life Sciences ‘s star products

– The top 2 products and services of Anavex Life Sciences 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 Anavex Life Sciences has relatively successful track record of launching new products.

Compensation and incentives

– The revenue per employee of Anavex Life Sciences 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.

Lack of clear differentiation of Anavex Life Sciences products

– To increase the profitability and margins on the products, Anavex Life Sciences needs to provide more differentiated products than what it is currently offering in the marketplace.

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Anavex Life Sciences Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Anavex Life Sciences are -

Low interest rates

– Even though inflation is raising its head in most developed economies, Anavex Life Sciences 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.

Creating value in data economy

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

Use of Bitcoin and other crypto currencies for transactions in Biotechnology & Drugs industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Anavex Life Sciences in the Biotechnology & Drugs industry. Now Anavex Life Sciences can target international markets with far fewer capital restrictions requirements than the existing system.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Anavex Life Sciences 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.

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. Anavex Life Sciences can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Using analytics as competitive advantage

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

Building a culture of innovation

– managers at Anavex Life Sciences 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.

Learning at scale

– Online learning technologies has now opened space for Anavex Life Sciences 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.

Buying journey improvements

– Anavex Life Sciences 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.

Increase in government spending

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

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. Anavex Life Sciences 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. Anavex Life Sciences 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Anavex Life Sciences can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Anavex Life Sciences is facing challenges because of the dominance of functional experts in the organization. Anavex Life Sciences 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.

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Threats Anavex Life Sciences External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Anavex Life Sciences are -

High dependence on third party suppliers

– Anavex Life Sciences 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.

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. Anavex Life Sciences can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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 Anavex Life Sciences.

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.

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 Anavex Life Sciences in the Biotechnology & Drugs sector and impact the bottomline of the organization.

Increasing wage structure of Anavex Life Sciences

– 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 Anavex Life Sciences.

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. Anavex Life Sciences needs to understand the core reasons impacting the Biotechnology & Drugs industry. This will help it in building a better workplace.

Environmental challenges

– Anavex Life Sciences 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. Anavex Life Sciences can take advantage of this fund but it will also bring new competitors in the Biotechnology & Drugs industry.

Stagnating economy with rate increase

– Anavex Life Sciences 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.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Anavex Life Sciences 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 Anavex Life Sciences prominent markets.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Biotechnology & Drugs industry are lowering. It can presents Anavex Life Sciences with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Biotechnology & Drugs sector.

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 Anavex Life Sciences business can come under increasing regulations regarding data privacy, data security, etc.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Anavex Life Sciences 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.

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Weighted SWOT Analysis of Anavex Life Sciences Template, Example

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

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