Discuss about the Information Technology And Business-Level Strategy.
The main aim of this paper is to explain business activities and operations of the firm. Novo Nordisk Corporation has been selected in the report. It is the biggest pharmaceutical company which renders pharma and drugs products to the customers. Apart from this, it provides brief information about the external and internal environment of the company. It depicts how the firm is overcoming on the competitors by using porter five forces analysis, corporate and business level strategies. Internal and external environment play a significant role in the organization. No company can survive its activities without evaluating and analyzing the macro as well as micro environment. Further details of the task have been detailed below.
Novo Nordisk A/S is a Danish multinational pharmaceutical corporation with it’s headquarter is located in Bagsvaerd, Denmark. The corporation was incorporated in 1989 through a merger of two companies. The firm provides its products in more than eight countries and its offices are situated in approx 75 countries. The organization manufactures and delivers pharmaceutical products and services such as diabetes care medications and devices (Novo Nordisk, 2018). The firm manufactures enormous brands under the various brand names which include Novoseven, Victoria, Levemir, Novoeight and Novolin R. There are approx 40000 employees employed in the firm. The organization is a member of the Europeon federation of pharmaceutical industries and associations (EFPIA).
An external environment is composed of all the outside elements that influence the business activities and operations (Brandon, 2014). An organization cannot control on external environment. There are two types of external environment such as micro environment and macro environment.
There are various external factors such as political, economic, social, technological, legal and environmental that influences the growth and success of the firm (Chitour, 2013). These external factors have been discussed below.
Political: Nono Nordisk (A Danish pharmaceutical) company is facing various challenges due to political instability. Political factors are major challenges for the pharmaceutical industry. Political factors include bureaucracy, trade control, corruption level, education law, and antitrust law. These factors are became a cause of worry for the drug distributors, investors and drug makers who are worried that under increasing pricing pressure. The firm needs to focus on political factors to beat the competitors in the global market (Hannigan, 2014).
Economic: Economic factors also influence the business activities and operations of Nono Nordisk (A Danish pharmaceutical) company. The growth and success of the pharmaceutical company is connected with GDP. It is assumed that economic situation of several countries has not yet fully recovered. Furthermore, the condition of the healthcare industry is not good. The economic factors include employment rate, interest rate, exchange rate, inflation rate, and foreign exchange rate. The firm is trying to improve the rate of employment and economic situation of the country.
Social: The socio-cultural elements present opportunities and threats as well. These factors include customs, values, beliefs, culture of the people. These factors affect the growth rate of the company. Some other problems such as obesity which is common problem across the world, affects the all age groups. Social factors also influence the demand of the company’s products (Epstein and Buhovac, 2014).
Technological: Technology can bring several opportunities for the Novo Nordisk Company as well as healthcare sector. Increasing of social networking has given several new and innovative opportunities for the pharmaceutical industry. In addition, social media also plays a significant role in healthcare sector. Innovative technologies help to reduce production costs of the firm.
Environmental: There are enormous environmental risks are connected with pharmaceuticals. Several types of pharmaceutical residues may pollute the environment of the country. In addition, people are getting ill due to low quality of environment such as water pollution, as well as air pollution. It also influences the hygiene environment of the country (Van Wormer and Besthorn, 2017).
Legal: The legal factors are one of the biggest challenges before the Novo Nordisk Company. In today’s era, financial penalties on pharma companies have also become more frequent. Along with this, corruption laws are also challenges before this sector. The other challenges include cyber security, abuse of sales, anti corruption and antitrust issues.
Industry analysis is important to overcome the competitors in the global market. Porter five forces analysis is done to evaluate and measure the strategies, policies and plans of the rivalries (Rothaermel, 2015). The porter five analysis has been discussed below.
Competitors in the industry: There are various competitors exist in the market such as Eli Lilly, Biocon, AstraZeneca and Abbott Laboraties. Therefore, their ability is a threaten for the company. If the buyers and suppliers are unable to receive an appropriate deal, they seek out the competitors of the firm. If the firm wants achieve higher profits and sales, it should focus on the marker rivalries (Frynas and Mellahi, 2015).
Potential of new entrants into an industry: Nono Nordisk power and authority is also influenced by the force of new competitors in the marketplace. Government regulations also affect the operations and activities of the organization (Lidstone and MacLennan, 2017).
Power of suppliers: The bargaining power of supplier is considered low competitive force. The power of suppliers address that how suppliers can increase the price of products and services. Suppliers hold higher power and authority, thus the firm depends upon the suppliers (Tukdeo et al, 2016).
Power of customers: The bargaining of power of customers is low competitive force in the global market. This power focuses that how buyers can decrease the prices of product and service. Nono Nordisk needs to analyze and identify the wants, desires and requirements of the customers to maximize the revenue and returns.
Threats of substitutes: Threats of substitutes is a biggest challenge for the organization because it affects the financial image of the company in the marketplace. The firm needs to differentiate the products from the competitors to stay in the competitive market.
The opportunities and threats of external environment have been stated below.
The Company’s internal environment is composed of the various factors within the organization including management , employees, and culture of people (van Wijngaarden, Scholten and van Wijk, 2012). All these elements influence the business operations in the global market.
Organization resources play an integral role in each and every firm. The tangible resources include financial assets and physical assets while intangible assets include company’s reputation, skills, and human technology (Gassmann, Reepmeyer and von Zedtwitz, 2013). No company can survive its business operations without resources and technologies.
The core competencies of Nono Nordisk include integrity, collaboration, patient focus, innovation and superior performance. These core competencies help to improve and enhance the image of the firm and it will also help to attract more and more candidates in the international market (Kongstvedt, 2012).
Value chain may be defined as a set of activities that a company operating and managing in a specific industry performs in order to deliver attractive and valuable products and service for the customers. It is an effective and flexible strategy which is used by Novo Nordisk Company for looking at the competitors and business. This analysis helps to gain competitive advantages in the global market. Along with this, it also provides much understanding of strengths and weaknesses of the firm.
SWOT analysis stands for strengths, weaknesses, opportunities and threats. SWOT analysis is done to identify and evaluate the strengths, weaknesses, opportunities and threats of the competitors in the marketplace. SWOT analysis has been discussed below.
|
Strengths |
Weaknesses |
|
· There are approx 33,000well trained employees working in the organization. · It is one of the biggest most suitable companies in the world. · The firm maintains great senior management team within the organization. |
· High and immense competition exists in the market. · Past legal actions also influence the image of the firm. |
|
Opportunities |
Threats |
|
· Increasing number of health conscious people. · Biosimilar market is the biggest growth opportunity in the market. |
· Rising public debt in European countries. · Negative consequences of healthcare reforms in major markets. |
The corporate level and business level strategies play a vital role in the organization to meet its long term goals and objectives (Wheelen et al, 2017).
Corporate level strategies: The corporate level strategies are initiated in the firm to gain revenue and returns. The corporate level strategies have been stated below.
Growth strategy: The main aim of the growth strategy is to win a large market share in the global world. The growth strategies include product development, diversification, market development and market penetration. This strategy focuses on the profits and sales of the company. By using this strategy, Novo Nordisk has been able to control the quality, supply needs and requirements.
Diversification strategy: This strategy looks at the company’s products and services and the firm manufactures diversify and dynamic products in the marketplace. There are two types of diversification strategy such as single business strategy and dominant business strategy (Benito-Osorio et al, 2012).
Stability strategy: This strategy is used by the firm to sustain a good image in the global market. It provides an effective and unique platform to the workers to attain optimal market share. Stability strategy also focuses on the customer retention.
Business level strategies: The business level strategy may be defined as a detail action taken by the company to provide value to customers and to gain competitive benefits by rendering core competencies in individual, specific products and service markets (Drnevich and Croson, 2013). The business level strategies have been discussed below.
Cost leadership strategy: This strategy is based on the pricing factors in the market. This strategy helps to minimize the cost structure of the firm by maintaining control on the prices. Cost leadership strategy is based on the internal efficiency of the employees (Peng, 2013).
Differentiation strategy: The main objective of this strategy is to differentiate the company’s products and services from the rivalries products and services in order to maintain goodwill in the international market. It focuses on the quality, customer service and products of the competitors globally (Vanderstraeten and Matthyssens, 2012).
Focused low cost: This strategy focuses on the prices of the products that are being provided by the company to its potential customers in the market. In this strategy, the company needs to focus on the requirements, desires and wants of the consumers to reduce the prices of the products and services.
Focused differentiation strategy: By using focused differentiation strategy, Novo Nordisk has been able to meet the needs and requirements of the target market in a more efficient and effective manner. In this way, this strategy plays an integral role to understand the preferences and choices of the target market.
Integrated low cost differentiation strategy: This strategy is adopted by many companies to maintain the low and appropriate prices of the pharmaceutical products and services. By using this strategy, the firm can provide attractive products and services to consumers at minimum price. Now it is assumed that business level strategies help to grow and explore the business activities in the global market (Kim and Mauborgne, 2014).
There are several issues are faced by Novo Nordisk company in the world. These issues affect goodwill and financial position of the firm internationally. The strategic issues are discussed below.
New technologies impact on pharma: It is ongoing issue in pharmaceutical industry which will direct impact on the commercialization and drug development. New and innovative technologies reduce manufacturing costs in the market. Therefore, the company needs to focus on the innovative technologies to maintain a good position in the market.
managementof change: It is one of the biggest issues for the Novo Nordisk firm which is influenced the efficiency and productivity of the employees. The employees do not accept new technologies and other rapid changes within the organization. As a result, absenteeism is increased in the firm (Hayes, 2014).
Slowing growth in emerging markets: Lower economic growth in emerging markets is the biggest challenge for the pharmaceutical industry. Due to slowing growth in emerging markets, the firm has not been able to gain maximum profit and outcome in the market.
All these issues influence the growth and success of the Novo Nordisk adversely. To satisfy the needs and requirements of the consumers, the company should focus on these strategic issues in the marketplace.
There are various suggestion have been given to improve the financial position and to reduce the issues of the firm globally that have been stated below.
Conclusion
On the above mentioned analysis, it can be concluded that Novo Nordisk(A Danish pharmaceutical) is a multinational company which provides pharma products and services to the customers globally. SWOT analysis, pestle analysis and porter’s five analysis are done by the firm to control and manage the activities and plans of the competitors. Apart from this, business and corporate level strategies are implemented by the corporation to determine the progress and growth of the firm. On the other hand, here is the discussion about the strategic issues that are being faced by Novo Nordisk in the marketplace. At the end, some recommendations have been given to reduce the strategic issues of the management.
References
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Brandon, R.N., 2014. Adaptation and environment. Princeton University Press.
Chitour, H.L., 2013. The Key Drivers behind Novo Nordisk’s Growth in the Diabetes Market in China. European Journal of Interdisciplinary Studies, (5(2), p.31).
Drnevich, P.L. and Croson, D.C., 2013. Information technology and business-level strategy: Toward an integrated theoretical perspective. Mis Quarterly, 37(2).
Epstein, M.J. and Buhovac, A.R., 2014. Making sustainability work: Best practices in managing and measuring corporate social, environmental, and economic impacts (2nd ed.,pp.141-157). Berrett-Koehler Publishers.
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Hannigan, J., 2014. Environmental sociology (3rd ed., pp.18-50). Routledge.
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Kongstvedt, P.R., 2012. Essentials of managed health care. Jones & Bartlett Publishers.
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Novo Nordisk. 2018. About Novo Nordisk. [Online]. Available at: https://www.novonordisk.com/about-novo-nordisk.html. [Accessed as on 28th March 2018].
Peng, M.W., 2013. Global strategy. Cengage learning.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.
Tukdeo, R., Kalilombe, E., Onyeugbo, O.C., Okafor, F. and Ebeleghe, R., 2016. The global pharmaceutical industry.
van Wijngaarden, J.D., Scholten, G.R. and van Wijk, K.P., 2012. Strategic analysis for health care organizations: the suitability of the SWOT?analysis. The International journal of health planning and management, (27(1), pp.34-49).
Van Wormer, K. and Besthorn, F., 2017. Human behavior and the social environment, macro level: Groups, communities, and organizations (3rd edition). Oxford University Press.
Vanderstraeten, J. and Matthyssens, P., 2012. Service-based differentiation strategies for business incubators: Exploring external and internal alignment. Technovation, (32(12), pp.656-670).
Wheelen, T.L., Hunger, J.D., Hoffman, A.N. and Bamford, C.E., 2017. Strategic management and business policy (14th ed., pp. 29-33). pearson.
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