Eckert&Ziegler AG (EUZG) SWOT Analysis / TOWS Matrix / MBA Resources
Biotechnology & Drugs
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Eckert&Ziegler AG (Germany)
Based on various researches at Oak Spring University , Eckert&Ziegler AG is operating in a macro-environment that has been destablized by – supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, increasing government debt because of Covid-19 spendings, increasing energy prices,
technology disruption, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Eckert&Ziegler AG
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Eckert&Ziegler AG can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Eckert&Ziegler AG, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Eckert&Ziegler AG 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 Eckert&Ziegler AG can be done for the following purposes –
1. Strategic planning of Eckert&Ziegler AG
2. Improving business portfolio management of Eckert&Ziegler AG
3. Assessing feasibility of the new initiative in Germany
4. Making a Biotechnology & Drugs sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Eckert&Ziegler AG
Strengths of Eckert&Ziegler AG | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Eckert&Ziegler AG are -
Training and development
– Eckert&Ziegler AG 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.
Organizational Resilience of Eckert&Ziegler AG
– The covid-19 pandemic has put organizational resilience at the centre of everthing Eckert&Ziegler AG does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Eckert&Ziegler AG has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Eckert&Ziegler AG 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.
Learning organization
- Eckert&Ziegler AG 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 Eckert&Ziegler AG is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Eckert&Ziegler AG emphasize – knowledge, initiative, and innovation.
High brand equity
– Eckert&Ziegler AG has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Eckert&Ziegler AG to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Eckert&Ziegler AG is present in almost all the verticals within the Biotechnology & Drugs industry. This has provided Eckert&Ziegler AG 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
– Eckert&Ziegler AG has clearly differentiated products in the market place. This has enabled Eckert&Ziegler AG to fetch slight price premium compare to the competitors in the Biotechnology & Drugs industry. The sustainable margins have also helped Eckert&Ziegler AG to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy of Eckert&Ziegler AG 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
– Eckert&Ziegler AG 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 Eckert&Ziegler AG have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Eckert&Ziegler AG in the Healthcare sector have low bargaining power. Eckert&Ziegler AG has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Eckert&Ziegler AG to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Eckert&Ziegler AG 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.
Successful track record of launching new products
– Eckert&Ziegler AG has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Eckert&Ziegler AG 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.
Weaknesses of Eckert&Ziegler AG | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Eckert&Ziegler AG are -
Products dominated business model
– Even though Eckert&Ziegler AG 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. Eckert&Ziegler AG should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, Eckert&Ziegler AG 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. Eckert&Ziegler AG 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 Eckert&Ziegler AG 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 Eckert&Ziegler AG can leverage the sales team experience to cultivate customer relationships as Eckert&Ziegler AG is planning to shift buying processes online.
High operating costs
– Compare to the competitors, Eckert&Ziegler AG 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 Eckert&Ziegler AG lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Eckert&Ziegler AG is dominated by functional specialists. It is not different from other players in the Biotechnology & Drugs industry, but Eckert&Ziegler AG needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Eckert&Ziegler AG to focus more on services in the Biotechnology & Drugs industry rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Eckert&Ziegler AG 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.
Interest costs
– Compare to the competition, Eckert&Ziegler AG 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.
Slow to strategic competitive environment developments
– As Eckert&Ziegler AG 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 Eckert&Ziegler AG, in the dynamic environment of Biotechnology & Drugs industry it has struggled to respond to the nimble upstart competition. Eckert&Ziegler AG 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 Biotechnology & Drugs industry
– The stress on hiring functional specialists at Eckert&Ziegler AG 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Eckert&Ziegler AG is slow explore the new channels of communication. These new channels of communication can help Eckert&Ziegler AG to provide better information regarding Biotechnology & Drugs products and services. It can also build an online community to further reach out to potential customers.
Eckert&Ziegler AG Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Eckert&Ziegler AG are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Eckert&Ziegler AG 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.
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 Eckert&Ziegler AG in the Biotechnology & Drugs industry. Now Eckert&Ziegler AG 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 Eckert&Ziegler AG 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.
Loyalty marketing
– Eckert&Ziegler AG 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.
Building a culture of innovation
– managers at Eckert&Ziegler AG 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Eckert&Ziegler AG 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 Eckert&Ziegler AG to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Eckert&Ziegler AG has opened avenues for new revenue streams for the organization in Biotechnology & Drugs industry. This can help Eckert&Ziegler AG to build a more holistic ecosystem for Eckert&Ziegler AG products in the Biotechnology & Drugs industry by providing – data insight services, data privacy related products, data based consulting services, 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. Eckert&Ziegler AG 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. Eckert&Ziegler AG 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.
Leveraging digital technologies
– Eckert&Ziegler AG 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.
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 Eckert&Ziegler AG 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. Eckert&Ziegler AG can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Eckert&Ziegler AG can use these opportunities to build new business models that can help the communities that Eckert&Ziegler AG operates in. Secondly it can use opportunities from government spending in Biotechnology & Drugs sector.
Developing new processes and practices
– Eckert&Ziegler AG 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.
Threats Eckert&Ziegler AG External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Eckert&Ziegler AG are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Eckert&Ziegler AG 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 Eckert&Ziegler AG prominent markets.
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 Eckert&Ziegler AG business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Eckert&Ziegler AG
– 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 Eckert&Ziegler AG.
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. Eckert&Ziegler AG needs to understand the core reasons impacting the Biotechnology & Drugs industry. This will help it in building a better workplace.
Consumer confidence and its impact on Eckert&Ziegler AG 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Eckert&Ziegler AG 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.
Regulatory challenges
– Eckert&Ziegler AG 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.
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. Eckert&Ziegler AG 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.
Environmental challenges
– Eckert&Ziegler AG 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. Eckert&Ziegler AG can take advantage of this fund but it will also bring new competitors in the Biotechnology & Drugs industry.
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.
High dependence on third party suppliers
– Eckert&Ziegler AG 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. Eckert&Ziegler AG 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 Eckert&Ziegler AG with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Biotechnology & Drugs sector.
Weighted SWOT Analysis of Eckert&Ziegler AG Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Eckert&Ziegler AG 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 Eckert&Ziegler AG 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 Eckert&Ziegler AG 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 Eckert&Ziegler AG 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 Eckert&Ziegler AG needs to make to build a sustainable competitive advantage.