IMS Health Holdings SWOT Analysis / Matrix

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SWOT analysis is a vital strategic planning tool that can be used by IMS Health Holdings managers to do a situational analysis of the company . It is a handy technique to evalauate the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) IMS Health Holdings is facing in its current business environment.

The IMS Health Holdings is one of the leading companies in its industry. IMS Health Holdings maintains its dominant position in market by carefully analyzing and reviewing the SWOT analysis.  SWOT analysis an immensenly interactive process and requires effective coordination among various departments within the organization such as – marketing, finance, operations, management information systems and strategic planning.

The SWOT Analysis framework enables an organization to identify the internal strategic factors such as -strengths and weaknesses, & external strategic factors such as - opportunities and threats. It leads to a 2X2 matrix – also called SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix helps the managers of the IMS Health Holdings to develop four types of strategies:

  • SO (strengths-opportunities) Strategies
  • WO (weaknesses-opportunities) Strategies
  • ST (strengths-threats) Strategies
  •  WT (weaknesses-threats) Strategies
IMS Health Holdings swot analysis / matrix

SWOT Matrix Strategies Objective

The central purpose of SWOT matrix is to identify the strategies that a company can utilize to exploit external opportunities, counter threats, and build on & protect IMS Health Holdings strengths, and eradicate its weaknesses.

Step by Step Guide to IMS Health Holdings SWOT Analysis

Strengths of IMS Health Holdings – Internal Strategic Factors

As one of the leading companies in its industry, IMS Health Holdings has numerous strengths that help it to thrive in the market place. These strengths not only help it to protect the market share in existing markets but also help in penetrating new markets. Based on Fern Fort University extensive research – some of the strengths of IMS Health Holdings are –

  • Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
  • Automation of activities brought consistency of quality to IMS Health Holdings products and has enabled the company to scale up and scale down based on the demand conditions in the market.
  • Highly successful at Go To Market strategies for its products.
  • Strong dealer community – It has built a culture among distributor & dealers where the dealers not only promote company’s products but also invest in training the sales team to explain to the customer how he/she can extract the maximum benefits out of the products.
  • Highly skilled workforce through successful training and learning programs. IMS Health Holdings is investing huge resources in training and development of its employees resulting in a workforce that is not only highly skilled but also motivated to achieve more.
  • Strong distribution network – Over the years IMS Health Holdings has built a reliable distribution network that can reach majority of its potential market.
  • Successful track record of developing new products – product innovation.
  • Superb Performance in New Markets – IMS Health Holdings has built expertise at entering new markets and making success of them. The expansion has helped the organization to build new revenue stream and diversify the economic cycle risk in the markets it operates in.

Weakness of IMS Health Holdings – Internal Strategic Factors

Weakness are the areas where IMS Health Holdings can improve upon. Strategy is about making choices and weakness are the areas where a firm can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

  • There are gaps in the product range sold by the company. This lack of choice can give a new competitor a foothold in the market.
  • High attrition rate in work force – compare to other organizations in the industry IMS Health Holdings has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
  • The company has not being able to tackle the challenges present by the new entrants in the segment and has lost small market share in the niche categories. IMS Health Holdings has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
  • Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, IMS Health Holdings needs to put more money in technology to integrate the processes across the board. Right now the investment in technologies is not at par with the vision of the company.
  • Not highly successful at integrating firms with different work culture. As mentioned earlier even though IMS Health Holdings is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
  • The profitability ratio and Net Contribution % of IMS Health Holdings are below the industry average.
  • Days inventory is high compare to the competitors – making the company raise more capital to invest in the channel. This can impact the long term growth of IMS Health Holdings

Opportunities for IMS Health Holdings – External Strategic Factors

  • Stable free cash flow provides opportunities to invest in adjacent product segments. With more cash in bank the company can invest in new technologies as well as in new products segments. This should open a window of opportunity for IMS Health Holdings in other product categories.
  • Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for IMS Health Holdings to capture new customers and increase its market share.
  • The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as IMS Health Holdings to increase its profitability.
  • New trends in the consumer behavior can open up new market for the IMS Health Holdings . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
  • Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided IMS Health Holdings an opportunity to enter a new emerging market.
  • New environmental policies – The new opportunities will create a level playing field for all the players in the industry. It represent a great opportunity for IMS Health Holdings to drive home its advantage in new technology and gain market share in the new product category.
  • Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of IMS Health Holdings.
  • The market development will lead to dilution of competitor’s advantage and enable IMS Health Holdings to increase its competitiveness compare to the other competitors.

Threats IMS Health Holdings Facing - External Strategic Factors

  • Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for IMS Health Holdings   in those markets.
  • Rising raw material can pose a threat to the IMS Health Holdings profitability.
  • As the company is operating in numerous countries it is exposed to currency fluctuations especially given the volatile political climate in number of markets across the world.
  • New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
  • Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
  • The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
  • New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
  • Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of IMS Health Holdings

Limitations of SWOT Analysis for IMS Health Holdings

Although the SWOT analysis is widely used as a strategic planning tool, the analysis does have its share of limitations.

  • Certain capabilities or factors of an organization can be both a strength and weakness at the same time. This is one of the major limitations of SWOT analysis . For example changing environmental regulations can be both a threat to company it can also be an opportunity in a sense that it will enable the company to be on a level playing field or at advantage to competitors if it able to develop the products faster than the competitors.
  • SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself.
  • The matrix is only a starting point for a discussion on how proposed strategies could be implemented. It provided an evaluation window but not an implementation plan based on strategic competitiveness of IMS Health Holdings
  • SWOT is a static assessment - analysis of status quo with few prospective changes. As circumstances, capabilities, threats, and strategies change, the dynamics of a competitive environment may not be revealed in a single matrix.
  • SWOT analysis may lead the firm to overemphasize a single internal or external factor in formulating strategies. There are interrelationships among the key internal and external factors that SWOT does not reveal that may be important in devising strategies.

Weighted SWOT Analysis of IMS Health Holdings

In light of the above mentioned limitations of the SWOT analysis / matrix, corporate managers decided to provide weightage to each internal strength and weakness of the firm. Organizations also assess the likelihood of events taking place in the coming future and how strong their impact could be on company's performance.

This method is called Weighted SWOT analysis. It is better than doing simplistic SWOT analysis because with Weighted SWOT Analysis IMS Health Holdings managers can focus on the most critical factors and discount the non-important one. It also solves the long list problem where organizations ends up making a long list but none of the factors deemed too critical.

Limitation of Weighted SWOT analysis of IMS Health Holdings

This approach also suffers from one major drawback - it focus on individual importance of factor rather than how they are collectively important and impact the business holistically.

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Example of Weighted SWOT Analysis

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SWOT Worksheet & Template

If you like to do your own SWOT analysis or want to make your own Weighted SWOT SWOT matrix then feel free to download Fern Fort University SWOT Analysis Template.

References / Citations & Bibliography

  • M. E. Porter, Competitive Strategy(New York: Free Press, 1980)
  • A. D. Chandler, Strategy and Structure (Cambridge, Mass.: MIT Press, 1962)
  • O. E. Williamson, Markets and Hierarchies(New York: Free Press, 1975);
  • L. Wrigley, Divisional Autonomy and Diversification (PhD, Harvard Business School, 1970)
  • R. E. White, Generic Business Strategies, Organizational Context and Performance: An Empirical Investigation, Strategic Management Journal7 (1986)