Based on various researches at Oak Spring University , Axsome Therapeutics Inc is operating in a macro-environment that has been destablized by – increasing commodity prices, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, geopolitical disruptions, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs,
increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Axsome Therapeutics Inc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Axsome Therapeutics Inc can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Axsome Therapeutics Inc, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Axsome Therapeutics Inc 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 Axsome Therapeutics Inc can be done for the following purposes –
1. Strategic planning of Axsome Therapeutics Inc
2. Improving business portfolio management of Axsome Therapeutics Inc
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 Axsome Therapeutics Inc
Strengths of Axsome Therapeutics Inc | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Axsome Therapeutics Inc are -
Training and development
– Axsome Therapeutics Inc 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.
Strong track record of project management in the Biotechnology & Drugs industry
– Axsome Therapeutics Inc is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Axsome Therapeutics Inc 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.
Organizational Resilience of Axsome Therapeutics Inc
– The covid-19 pandemic has put organizational resilience at the centre of everthing Axsome Therapeutics Inc does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Biotechnology & Drugs industry
- digital transformation varies from industry to industry. For Axsome Therapeutics Inc digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Axsome Therapeutics Inc 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.
Analytics focus
– Axsome Therapeutics Inc is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the Biotechnology & Drugs industry. The technology infrastructure of United States 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.
Sustainable margins compare to other players in Biotechnology & Drugs industry
– Axsome Therapeutics Inc has clearly differentiated products in the market place. This has enabled Axsome Therapeutics Inc to fetch slight price premium compare to the competitors in the Biotechnology & Drugs industry. The sustainable margins have also helped Axsome Therapeutics Inc to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Axsome Therapeutics Inc 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.
Highly skilled collaborators
– Axsome Therapeutics Inc 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 Axsome Therapeutics Inc have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Axsome Therapeutics Inc is one of the most innovative firm in Biotechnology & Drugs sector.
Learning organization
- Axsome Therapeutics Inc 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 Axsome Therapeutics Inc is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Axsome Therapeutics Inc emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Axsome Therapeutics Inc in the Healthcare sector have low bargaining power. Axsome Therapeutics Inc has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Axsome Therapeutics Inc to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses of Axsome Therapeutics Inc | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Axsome Therapeutics Inc are -
High dependence on Axsome Therapeutics Inc ‘s star products
– The top 2 products and services of Axsome Therapeutics Inc 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 Axsome Therapeutics Inc has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the Biotechnology & Drugs industry, Axsome Therapeutics Inc 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, Axsome Therapeutics Inc 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.
Aligning sales with marketing
– From the outside it seems that Axsome Therapeutics Inc 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 Axsome Therapeutics Inc can leverage the sales team experience to cultivate customer relationships as Axsome Therapeutics Inc is planning to shift buying processes online.
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 Axsome Therapeutics Inc supply chain. Even after few cautionary changes, Axsome Therapeutics Inc is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Axsome Therapeutics Inc vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee of Axsome Therapeutics Inc 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
Axsome Therapeutics Inc 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 operating costs
– Compare to the competitors, Axsome Therapeutics Inc 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 Axsome Therapeutics Inc lucrative customers.
Slow to strategic competitive environment developments
– As Axsome Therapeutics Inc is one of the leading players in the Biotechnology & Drugs industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Biotechnology & Drugs industry in last five years.
Ability to respond to the competition
– As the decision making is very deliberative at Axsome Therapeutics Inc, in the dynamic environment of Biotechnology & Drugs industry it has struggled to respond to the nimble upstart competition. Axsome Therapeutics Inc has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though Axsome Therapeutics Inc has some of the most successful models in the Biotechnology & Drugs industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Axsome Therapeutics Inc should strive to include more intangible value offerings along with its core products and services.
Axsome Therapeutics Inc Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Axsome Therapeutics Inc are -
Manufacturing automation
– Axsome Therapeutics Inc 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.
Using analytics as competitive advantage
– Axsome Therapeutics Inc 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 Axsome Therapeutics Inc to build a competitive advantage using analytics. The analytics driven competitive advantage can help Axsome Therapeutics Inc to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Axsome Therapeutics Inc has opened avenues for new revenue streams for the organization in Biotechnology & Drugs industry. This can help Axsome Therapeutics Inc to build a more holistic ecosystem for Axsome Therapeutics Inc products in the Biotechnology & Drugs industry by providing – data insight services, data privacy related products, data based consulting services, 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, Axsome Therapeutics Inc can use these opportunities to build new business models that can help the communities that Axsome Therapeutics Inc operates in. Secondly it can use opportunities from government spending in Biotechnology & Drugs sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Axsome Therapeutics Inc 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 Axsome Therapeutics Inc to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Axsome Therapeutics Inc 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.
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. Axsome Therapeutics Inc can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Axsome Therapeutics Inc 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.
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. Axsome Therapeutics Inc 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. Axsome Therapeutics Inc 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.
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 Axsome Therapeutics Inc 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Axsome Therapeutics Inc 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Axsome Therapeutics Inc is facing challenges because of the dominance of functional experts in the organization. Axsome Therapeutics Inc 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Axsome Therapeutics Inc can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Axsome Therapeutics Inc External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Axsome Therapeutics Inc are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Axsome Therapeutics Inc 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 Axsome Therapeutics Inc prominent markets.
High dependence on third party suppliers
– Axsome Therapeutics Inc 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Axsome Therapeutics Inc 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.
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. Axsome Therapeutics Inc needs to understand the core reasons impacting the Biotechnology & Drugs industry. This will help it in building a better workplace.
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. Axsome Therapeutics Inc 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.
Consumer confidence and its impact on Axsome Therapeutics Inc 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.
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 Axsome Therapeutics Inc business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Axsome Therapeutics Inc
– 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 Axsome Therapeutics Inc.
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. Axsome Therapeutics Inc can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Biotechnology & Drugs industry are lowering. It can presents Axsome Therapeutics Inc with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Biotechnology & Drugs sector.
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.
Technology acceleration in Forth Industrial Revolution
– Axsome Therapeutics Inc has witnessed rapid integration of technology during Covid-19 in the Biotechnology & Drugs industry. As one of the leading players in the industry, Axsome Therapeutics Inc 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
– Axsome Therapeutics Inc 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.
Weighted SWOT Analysis of Axsome Therapeutics Inc Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Axsome Therapeutics Inc 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 Axsome Therapeutics Inc 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 Axsome Therapeutics Inc 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 Axsome Therapeutics Inc 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 Axsome Therapeutics Inc needs to make to build a sustainable competitive advantage.