Swisse Corporate Strategy Analysis

This report analyzes the corporate strategy of Swisse, a natural health company in Australia. It discusses their strategic capability, competitive strategy, and business strategy statement. The report also includes a cultural web of Swisse and suggestions for future growth opportunities.

Running head: CORPORATE STRATEGY
Business Strategy and Analysis
Part 3
Name of Student:
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CORPORATE STRATEGY
Executive summary
In this report critical aspects of strategy of a company named Swisse is discussed which is a
successful natural health company in Australia that is operating in vitamins and dietary
supplements markets and was established in 1969 at Melbourne by Kevin Ring. Their core
competence is their continuous investments in product development and R&D formulation. In
order to maintain leading position in industry they make continuous capital flow for development
of their knowledge capabilities to build innovation and maintain effectiveness in operations and
customer centricity. In this report strategic capability of Swisse is discussed along with their
competitive strategy applied to respond effectively to industry and macro environment factors to
attain competitive edge. Moreover the strategy statement of Swisse is summarised to describe
their mission, vision and purpose in future to present a clear picture of their strategic options.
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CORPORATE STRATEGY
Contents
Executive summary.....................................................................................................................................1
Strategic capability......................................................................................................................................3
Strategy and culture....................................................................................................................................7
Competitive strategy...................................................................................................................................8
Business Strategy Statement.......................................................................................................................9
Conclusion.................................................................................................................................................10
References.................................................................................................................................................11
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CORPORATE STRATEGY
Strategic capability
In this section strategic capability of Swisse will be analyzed using VRIO and SWOT analysis
1. VRIO
The strategic capabilities and core competency of Swisse are:
Resources: Swisse has a wide category of vitamin and dietary supplement products and being a
leading company in nutrition industry it has strong brand awareness and recognition in markets.
Also it has extensive presence in markets in both online and offline platforms such as health food
outlets, pharmacies and practitioner markets which make Swisse enjoy a strong physical resource
capability. According to Place and Talen (2013) other than this Swisse has strong financial
resource capabilities as it is one of the leaders in industry and has strong market hold which is
expanding through direct sales in markets of China where demand is huge for vitamin and
dietary supplement products. Also Swisse enjoys a strong dominance of improved sales and
profits which is increasingly in growth trend. Further as stated by Vukanović (2016) Swisse has a
strong human resource with skilled workforce and trained employees who are competent in
customer centric skills and knowledge. Swisse provides their talent resources with ideal growth
possibilities through career secondments that helps them deliver benefits across the business and
with their consistent workforce improvement structure, training programs etc the expertise of
employees are improved to develop leadership capability which is Swisse major priority.
Competencies: Swisse enjoys a leading position in nutrition market because of their knowledge
and research based innovative health products and constant investments in R&D and
improvement of skills of their workforce supports their growth objectives. According to
Mitchell-Paterson, Pearson and Hudson (2012) improvement in warehousing and distribution
helps Swisse achieve more sales in both domestic and international market. Swisse maintains
low operational costs with effective capital management by focusing on minimizing short term
partnerships with suppliers and enhancing their sales in markets of China.
VRIO evaluation:
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CORPORATE STRATEGY
VRIO is a tool that examines the internal resources and capabilities to evaluate Swisse’s
sustained competitive edge based on:
Value: Swisse enjoys its leading presence in market with huge brand recognition and value
proposition to customers and is a highly trusted brand in nutrition category. They use active
communication strategies and marketing approaches to connect with customers and serve their
needs with better understanding which supports their sustained sales growth. Further as stated by
Zhou (2017) Swisse is present in other extensive markets which diversifies their products and
supports expansion of markets with China being their most high demanding market. Moreover
Swisse has extensive distribution arrangement and supplier positioning that helps to extend reach
of their products to customers. Their products are in mid to high price range and due to
operational efficiency they deliver high quality products and services.
Rare: Swisse has a unique market demand in Superfood range that is specially formulated to
protect cells from free radical damage and these are highly demandable in both Australian and
Asian markets. Also as stated by Stroetmann (2013) Swisse entered in global partnership with
PGT healthcare in 2014 which helped them maintain expansion of premium quality vitamins,
minerals and supplements in Europe, Asia and Latin America. In 2016 Swisse entered in
partnership with major infant nutrition producers in Asia named Biostime which strengthened
collaboration interest to expand capacity.
Inimitability: as Swisse is a leading producer in nutritional market it is difficult for competitors
to imitate their resources and also as they have strong presence and financial capability so their
resources are almost inimitable. For instance as stated by Doran and Thomson (2017) Swisse
Australia’s significant presence in China markets is difficult to imitate because of the country’s
stringent tariffs and regulations on supply of health and nutrition products.
Organized to capture value: According to Noran and Panetto (2013) Swisse exploits supplier
management opportunities with extensive checks to procure only high grade quality materials
and makes continued investments in training of employees to insure effectiveness of their
workforce in assisting their customer needs with strong communication approach. Also Swisse
makes regular investments in new healthcare research studies for innovating and developing
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CORPORATE STRATEGY
products and they collaborate with many universities and research centers to regularly launch
new products with relevant research application.
Resource/
capability
Value Rare Costly to
Imitate
Organized
value
Value
creation
Marketing and
communication
√ X X √ Competitive
parity
R&D √ X √ √ Competitive
parity
Talent √ X X √ Competitive
parity
Supplier
relationship
√ X X √ Competitive
parity
Brand Recognition √ √ √ √ Sustained
advantage
High Quality √ √ √ √ Sustained
advantage
Product
differentiation
√ √ √ √ Sustained
advantage
VRIO matrix
(Source: Author)
SWOT:
Strength Weakness
Swiss has a strong product portfolio ranging
from men/women health supplements, skin
care, super food to sports nutrition products
Although Swisse is making significant
investments in R&D and innovation but it is
not enough to compete with leading rivals like
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CORPORATE STRATEGY
and with their go to market approach they have
strong market presence and financial
capability. Also as they are leading in market
so they make strong investments to expand to
new markets, product development and
launches. According to Papacharalampous
(2017) Swisse has strong operational
effectiveness due to their extensive and reliable
supply networks, approach to technology
investments and with their significant
collaborations with Biostime they have build a
high demand market in Asia.
Blackmores that are high on products based on
tested attributes. Moreover Swisse has limited
core business and has yet not moved to other
product segments to diversify business
challenges outside their present industry.
Opportunities Threats
Swisse can be successful in integrated products
segments by using their competence in
healthcare research. Also with new technology
they can ensure differentiated pricing and value
proposition in new markets to attract customers
and can exploit opportunities in online sales by
meeting customer needs better with application
of big data. Further as stated by Gauthier and
Wac (2015) as Swisse is a natural healthcare
product so government support of various
countries to green products can increase
distribution and supplies of their products. The
opportunities of market development will also
help them reduce competition by enhancing
their capabilities.
Swisse can encounter threats due to new
technology which has created competition with
disruptive innovation in market and variation
of regulations in different markets related to
healthcare is also a concern to meet standards.
Moreover intense competition with rivals in
industry exerts pressure on their profits and
economies of scale. Further as they operate in
various markets so currency fluctuation and
political, environmental policies and change in
consumer preferences are possible threats that
can affect operations and supply chains.
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CORPORATE STRATEGY
Strategy and culture
According to Buller and McEvoy(2012) the strategy directs the business to goals with imperative
differentiation and focus while culture is the reality of organizational alignment that drives to
successful strategy implementation. There is direct relationship between strategy and culture. As
strategy is story of company’s mission, vision, values, expectations and intent of business which
is turned true when culture is embraced and understands this story. So culture drives the spirit on
the manner strategy is executed and attained with desire of people who are engaged with
business.
Relationship between culture-strategy
Source: Torbenrick.eu (2018)
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CORPORATE STRATEGY
The cultural web of Swisse describes the cultural paradigm or assumptions based on elements
that are true for company and their employees which guide them to competitive reality.
Cultural web of Swisse
(Source: Author)
9
Paradigm
Swisse is leading
provider of
natural healthcare
Stories
Wonderful
products and
natural cure
Symbols
Swisse logo,
language
Control systems
Quality and
development
Organisational
structure
Hierarchical
Power structure
Innovation
Rituals and
routines
Consultation,
Research studies,
product trails

CORPORATE STRATEGY
Competitive strategy
Swisse’s competitive strategy is based on differentiation that includes uniqueness along certain
dimensions that are highly valued by customers which allows them premium pricing for vitamin
and dietary supplement products. According to Johnson et al. (2017) the differentiation strategy
of Swisse is primary based on two drivers which are product and service features and customer
relationships. The products of Swisse offer better features compared to others for customers as
these are based on extensive innovation and formulation that are developed by sourcing high
grade ingredients and after meeting robust quality checks and standards these are distributed in
market form customer use. Swisse makes continuous investments for enhancing their research
capability and leveraging expertise to improve the knowledge base of natural healthcare for
product innovation and development and this unique nurturing formulation gives them global
advantage in markets. Currently they have grown across Asian markets and are in plan to exploit
other new markets. As stated by Banker, Mashruwala and Tripathy (2014) this will help Swisse
effectively respond to competitive pressures in industry and meet the changing needs of
customers to maintain sustained growth. Swisse has high focus to tap the consumers of China
and other locations in Asia as they are largely conscious to vitamin and supplement products and
based on identification of this customer need Swisse focuses on differentiation that is based on
product leadership in area of research and innovation. Moreover the other differentiator driver
for Swisse is customer relationship where product value is leveraged on better customer
connection and services. Swisse invests substantially to build deep customer connections through
digital technology to improve customer experiences and engagement and with their operational
effectiveness they have simplified and streamlined their supply process to make their products
widely and easily available which offers successful value differentiation.
Business Strategy Statement
The mission of Swisse is to boost health and lives of people by offering best in class natural
healthcare solutions. Their vision is to become superior in vitamin and dietary supplement
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CORPORATE STRATEGY
market with business performance, market expansion and focus on providing continually
improved products to maintain sustained success and growth for their company, people and
shareholders. The objectives of Swisse are to maintain ongoing product leadership based on
drivers of innovation, development and customer experiences and their scope is to expand their
operational effectiveness and growth markets in Asia with their core advantage on R&D,
knowledge & talent and financial capabilities.
Strategy statement:
At Swisse the business philosophy is surrounded on delivering healthier and happier lives to
people with focus on innovation, research and development and love for natural healthcare
improvement. To contribute to growing society we nurture best health solutions by devoting on
talent, technology and operational fitness to deliver superior products and services achieved with
our unrivalled heritage and knowledge.
Conclusion
Thus to conclude it can be said that Swisse has maintained their leadership in natural healthcare
sector with competencies of knowledge, expertise of workforce and continued focus on research
and development to create a differentiation value compared to others in market. But in order to
leverage sustained growth and respond to competitive pressure they can enter into integrated
segments like vetcare or related products to expand their portfolio as well as in addition to
markets of China, they can exploit opportunities in emerging markets like India which also has
health conscious consumers.
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CORPORATE STRATEGY
References
Buller, P.F. and McEvoy, G.M. (2012) Strategy, human resource management and performance:
Sharpening line of sight. Human resource management review. 22(1), pp.43-56.
Banker, R. D., Mashruwala, R. and Tripathy, A. (2014) Does a differentiation strategy lead to
more sustainable financial performance than a cost leadership strategy?(Online). United
Kingdom: Emerald Group Publishing Limited: Available from: https://doi.org/10.1108/MD-05-
2013-0282 [Accessed 16 September 2018]
Doran, P. and Thomson, R. (2017). Economic Impact Analysis–Victorian Medical Technologies
& Pharmaceuticals Sector. Centre for Transformative innovation (Online) February. Available
from: http://economicdevelopment.vic.gov.au/__data/assets/pdf_file/0006/1536558/Economic-
Impact-Analysis-Victorian-Medical-Technologies-and-Pharmaceuticals-Sector-February.pdf
[Accessed 16 September 2018]
Gauthier, T. and Wac, K. (2015). A foresight analysis of pervasive healthcare technologies.
Journal of futures studies, 20(1), pp.69-82.
Johnson, G., Whittington, R., Scholes., Angwin, D. and Regnér, P., 2017. Exploring strategy:
Text and cases. 11th ed. Harlow: England. Pearson Education.
Mitchell-Paterson, T., Pearson, B. and Hudson, A. (2012). CEO's report. Journal of the
Australian Traditional-Medicine Society, 18(2), p.72.
Noran, O. and Panetto, H. (2013). Modelling a sustainable cooperative healthcare: An
interoperability-driven approach. In OTM Confederated International Conferences" On the Move
to Meaningful Internet Systems" (pp. 238-249). Springer, Berlin, Heidelberg.
Papacharalampous, M.( 2017). A business opportunity in food industry: natural food products
that boost health and have healing attributes. (Online) Thessaloniki, Greece. International
Hellenic University. Available from:
https://repository.ihu.edu.gr/xmlui/bitstream/handle/11544/15918/Papacharalampous.Magdalini.
EMBA2015.pdf?sequence=1 [Accessed on 16 September 2018]
Place, S. and Talen, M. (2013). Creating a culture of wellness: conversations, curriculum,
concrete resources, and control. The International Journal of Psychiatry in Medicine, 45(4),
pp.333-344.
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Stroetmann, K.A. (2013). Achieving the integrated and smart health and wellbeing paradigm: A
call for policy research and action on governance and business models. International journal of
medical informatics, 82(4), pp.e29-e37.
Vukanović, Z. (2016). The Paradigm Shift: From Static to
Evolutionary/Dynamic/Transformational/Networked/Modular/Dynamic Business Model
Concept. In Foreign Direct Investment Inflows Into the South East European Media Market (pp.
77-94). Springer, Cham.
Zhou, W. (2017). Chinese Investment in Australia: A Critical Analysis of the China-Australia
Free Trade Agreement. Melb. J. Int'l L., 18, p.407.
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