H Lundbeck AS (HLUYY) SWOT Analysis / TOWS Matrix / MBA Resources
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for H Lundbeck AS (United States)
Based on various researches at Oak Spring University , H Lundbeck AS is operating in a macro-environment that has been destablized by – challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, technology disruption, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google,
geopolitical disruptions, increasing household debt because of falling income levels, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that H Lundbeck AS can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the H Lundbeck AS, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which H Lundbeck AS 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 H Lundbeck AS can be done for the following purposes –
1. Strategic planning of H Lundbeck AS
2. Improving business portfolio management of H Lundbeck AS
3. Assessing feasibility of the new initiative in United States
4. Making a sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of H Lundbeck AS
Strengths of H Lundbeck AS | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of H Lundbeck AS are -
Diverse revenue streams
– H Lundbeck AS is present in almost all the verticals within the industry. This has provided H Lundbeck AS 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 industry
– H Lundbeck AS has clearly differentiated products in the market place. This has enabled H Lundbeck AS to fetch slight price premium compare to the competitors in the industry. The sustainable margins have also helped H Lundbeck AS to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that H Lundbeck AS 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.
Ability to recruit top talent
– H Lundbeck AS is one of the leading players in the 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.
Innovation driven organization
– H Lundbeck AS is one of the most innovative firm in sector.
Ability to lead change in
– H Lundbeck AS is one of the leading players in the industry in United States. Over the years it has not only transformed the business landscape in the industry in United States but also across the existing markets. The ability to lead change has enabled H Lundbeck AS in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– H Lundbeck AS has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. H Lundbeck AS 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.
Low bargaining power of suppliers
– Suppliers of H Lundbeck AS in the sector have low bargaining power. H Lundbeck AS has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps H Lundbeck AS to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of H Lundbeck AS in industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy of H Lundbeck AS comprises – understanding the underlying the factors in the 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.
Learning organization
- H Lundbeck AS 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 H Lundbeck AS is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at H Lundbeck AS emphasize – knowledge, initiative, and innovation.
Digital Transformation in industry
- digital transformation varies from industry to industry. For H Lundbeck AS digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. H Lundbeck AS 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.
Weaknesses of H Lundbeck AS | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of H Lundbeck AS are -
High cash cycle compare to competitors
H Lundbeck AS has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Ability to respond to the competition
– As the decision making is very deliberative at H Lundbeck AS, in the dynamic environment of industry it has struggled to respond to the nimble upstart competition. H Lundbeck AS has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring in industry
– The stress on hiring functional specialists at H Lundbeck AS 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.
Aligning sales with marketing
– From the outside it seems that H Lundbeck AS needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department at H Lundbeck AS can leverage the sales team experience to cultivate customer relationships as H Lundbeck AS is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of H Lundbeck AS is dominated by functional specialists. It is not different from other players in the industry, but H Lundbeck AS needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help H Lundbeck AS to focus more on services in the industry rather than just following the product oriented approach.
Interest costs
– Compare to the competition, H Lundbeck AS has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High operating costs
– Compare to the competitors, H Lundbeck AS has high operating costs in the industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract H Lundbeck AS lucrative customers.
Low market penetration in new markets
– Outside its home market of United States, H Lundbeck AS needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the industry, H Lundbeck AS 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.
High dependence on H Lundbeck AS ‘s star products
– The top 2 products and services of H Lundbeck AS still accounts for major business revenue. This dependence on star products in industry has resulted into insufficient focus on developing new products, even though H Lundbeck AS has relatively successful track record of launching new products.
Products dominated business model
– Even though H Lundbeck AS has some of the most successful models in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. H Lundbeck AS should strive to include more intangible value offerings along with its core products and services.
H Lundbeck AS Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of H Lundbeck AS are -
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. H Lundbeck AS can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Use of Bitcoin and other crypto currencies for transactions in industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for H Lundbeck AS in the industry. Now H Lundbeck AS can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– H Lundbeck AS 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for H Lundbeck AS 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 H Lundbeck AS to hire the very best people irrespective of their geographical location.
Manufacturing automation
– H Lundbeck AS can use the latest technology developments to improve its manufacturing and designing process in 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, H Lundbeck AS 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.
Using analytics as competitive advantage
– H Lundbeck AS has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in sector. This continuous investment in analytics has enabled H Lundbeck AS to build a competitive advantage using analytics. The analytics driven competitive advantage can help H Lundbeck AS to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, H Lundbeck AS can use these opportunities to build new business models that can help the communities that H Lundbeck AS operates in. Secondly it can use opportunities from government spending in sector.
Building a culture of innovation
– managers at H Lundbeck AS 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 industry.
Buying journey improvements
– H Lundbeck AS can improve the customer journey of consumers in the 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.
Learning at scale
– Online learning technologies has now opened space for H Lundbeck AS 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in industry, but it has also influenced the consumer preferences. H Lundbeck AS can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, H Lundbeck AS is facing challenges because of the dominance of functional experts in the organization. H Lundbeck AS can utilize new technology in the field of industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats H Lundbeck AS External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of H Lundbeck AS are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, H Lundbeck AS 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 H Lundbeck AS prominent markets.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for H Lundbeck AS in industry. The 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 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 wage structure of H Lundbeck AS
– 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 H Lundbeck AS.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, H Lundbeck AS may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of sector.
Environmental challenges
– H Lundbeck AS 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. H Lundbeck AS can take advantage of this fund but it will also bring new competitors in the industry.
Stagnating economy with rate increase
– H Lundbeck AS 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 industry.
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 H Lundbeck AS.
Technology acceleration in Forth Industrial Revolution
– H Lundbeck AS has witnessed rapid integration of technology during Covid-19 in the industry. As one of the leading players in the industry, H Lundbeck AS needs to keep up with the evolution of technology in the 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.
Shortening product life cycle
– it is one of the major threat that H Lundbeck AS is facing in sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– H Lundbeck AS 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 industry regulations.
Easy access to finance
– Easy access to finance in industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. H Lundbeck AS 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 industry are lowering. It can presents H Lundbeck AS with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of H Lundbeck AS Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at H Lundbeck AS 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 H Lundbeck AS 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 H Lundbeck AS 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 H Lundbeck AS 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 H Lundbeck AS needs to make to build a sustainable competitive advantage.
