SWOT Analysis / TOWS Matrix for NanJing Pharm (China)
Based on various researches at Oak Spring University , NanJing Pharm is operating in a macro-environment that has been destablized by – banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs,
cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that NanJing Pharm can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the NanJing Pharm, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which NanJing Pharm 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 NanJing Pharm can be done for the following purposes –
1. Strategic planning of NanJing Pharm
2. Improving business portfolio management of NanJing Pharm
3. Assessing feasibility of the new initiative in China
4. Making a Biotechnology & Drugs sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of NanJing Pharm
Strengths of NanJing Pharm | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of NanJing Pharm are -
Digital Transformation in Biotechnology & Drugs industry
- digital transformation varies from industry to industry. For NanJing Pharm digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. NanJing Pharm 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.
High brand equity
– NanJing Pharm has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled NanJing Pharm to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– NanJing Pharm 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 NanJing Pharm have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of NanJing Pharm in the Healthcare sector have low bargaining power. NanJing Pharm has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps NanJing Pharm to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– NanJing Pharm 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
– NanJing Pharm is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– NanJing Pharm is one of the leading players in the Biotechnology & Drugs industry in China. It is in a position to attract the best talent available in China. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that NanJing Pharm 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.
Sustainable margins compare to other players in Biotechnology & Drugs industry
– NanJing Pharm has clearly differentiated products in the market place. This has enabled NanJing Pharm to fetch slight price premium compare to the competitors in the Biotechnology & Drugs industry. The sustainable margins have also helped NanJing Pharm to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of NanJing Pharm in Biotechnology & Drugs industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the NanJing Pharm 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.
Effective Research and Development (R&D)
– NanJing Pharm has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – NanJing Pharm 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 NanJing Pharm | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of NanJing Pharm are -
High cash cycle compare to competitors
NanJing Pharm 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.
Workers concerns about automation
– As automation is fast increasing in the Biotechnology & Drugs industry, NanJing Pharm 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 NanJing Pharm is dominated by functional specialists. It is not different from other players in the Biotechnology & Drugs industry, but NanJing Pharm needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help NanJing Pharm to focus more on services in the Biotechnology & Drugs industry rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, NanJing Pharm has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Biotechnology & Drugs industry over the last five years. NanJing Pharm even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Aligning sales with marketing
– From the outside it seems that NanJing Pharm 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 NanJing Pharm can leverage the sales team experience to cultivate customer relationships as NanJing Pharm is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative at NanJing Pharm, in the dynamic environment of Biotechnology & Drugs industry it has struggled to respond to the nimble upstart competition. NanJing Pharm 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 NanJing Pharm 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. NanJing Pharm should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee of NanJing Pharm 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, NanJing Pharm is slow explore the new channels of communication. These new channels of communication can help NanJing Pharm to provide better information regarding Biotechnology & Drugs products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As NanJing Pharm 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.
Lack of clear differentiation of NanJing Pharm products
– To increase the profitability and margins on the products, NanJing Pharm needs to provide more differentiated products than what it is currently offering in the marketplace.
NanJing Pharm Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of NanJing Pharm are -
Leveraging digital technologies
– NanJing Pharm 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.
Learning at scale
– Online learning technologies has now opened space for NanJing Pharm 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.
Loyalty marketing
– NanJing Pharm 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.
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. NanJing Pharm 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. NanJing Pharm 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, NanJing Pharm is facing challenges because of the dominance of functional experts in the organization. NanJing Pharm 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, NanJing Pharm 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 NanJing Pharm to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, NanJing Pharm 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for NanJing Pharm 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for NanJing Pharm 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 NanJing Pharm to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– NanJing Pharm can develop new processes and procedures in Biotechnology & Drugs industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
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 NanJing Pharm 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.
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. NanJing Pharm can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of NanJing Pharm has opened avenues for new revenue streams for the organization in Biotechnology & Drugs industry. This can help NanJing Pharm to build a more holistic ecosystem for NanJing Pharm products in the Biotechnology & Drugs industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Threats NanJing Pharm External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of NanJing Pharm are -
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 NanJing Pharm business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– NanJing Pharm 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.
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 NanJing Pharm in the Biotechnology & Drugs sector and impact the bottomline of the organization.
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. NanJing Pharm needs to understand the core reasons impacting the Biotechnology & Drugs industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– NanJing Pharm 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for NanJing Pharm 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.
Consumer confidence and its impact on NanJing Pharm 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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, NanJing Pharm 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Biotechnology & Drugs industry are lowering. It can presents NanJing Pharm with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Biotechnology & Drugs sector.
Shortening product life cycle
– it is one of the major threat that NanJing Pharm is facing in Biotechnology & Drugs sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Increasing wage structure of NanJing Pharm
– 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 NanJing Pharm.
Weighted SWOT Analysis of NanJing Pharm Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at NanJing Pharm 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 NanJing Pharm 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 NanJing Pharm 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 NanJing Pharm 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 NanJing Pharm needs to make to build a sustainable competitive advantage.