Achillion Pharmaceuticals, Inc. SWOT Analysis / Matrix

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SWOT analysis is a strategic planning tool that can be used by Achillion Pharmaceuticals, Inc. managers to do a situational analysis of the organization . It is a useful technique to understand the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Achillion Pharmaceuticals, Inc. is facing in its current business environment.

The Achillion Pharmaceuticals, Inc. is one of the leading firms in its industry. Achillion Pharmaceuticals, Inc. maintains its dominant position in market by critically 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.

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The SWOT Analysis framework facilitates 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 known as SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix enables the managers of the Achillion Pharmaceuticals, Inc. to develop four types of strategies:

SO (strengths-opportunities) Strategies
WO (weaknesses-opportunities) Strategies
ST (strengths-threats) Strategies
WT (weaknesses-threats) Strategies

Achillion Pharmaceuticals, Inc. swot analysis / matrix

SWOT Matrix Strategies Objective

The primary purpose of SWOT matrix is to identify the strategies that a company can use to exploit external opportunities, counter threats, and build on & protect Achillion Pharmaceuticals, Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to Achillion Pharmaceuticals, Inc. SWOT Analysis

Strengths of Achillion Pharmaceuticals, Inc. – Internal Strategic Factors

As one of the leading companies in its industry, Achillion Pharmaceuticals, Inc. 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 Achillion Pharmaceuticals, Inc. are –

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Strong Brand Portfolio – Over the years Achillion Pharmaceuticals, Inc. has invested in building a strong brand portfolio. The SWOT analysis of Achillion Pharmaceuticals, Inc. just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
Strong Free Cash Flow – Achillion Pharmaceuticals, Inc. has strong free cash flows that provide resources in the hand of the company to expand into new projects.
Successful track record of integrating complimentary firms through mergers & acquisition. It has successfully integrated number of technology companies in the past few years to streamline its operations and to build a reliable supply chain.
Highly skilled workforce through successful training and learning programs. Achillion Pharmaceuticals, Inc. 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.
High level of customer satisfaction – the company with its dedicated customer relationship management department has able to achieve a high level of customer satisfaction among present customers and good brand equity among the potential customers.
Strong distribution network – Over the years Achillion Pharmaceuticals, Inc. has built a reliable distribution network that can reach majority of its potential market.
Superb Performance in New Markets – Achillion Pharmaceuticals, Inc. 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.
Highly successful at Go To Market strategies for its products.

Weakness of Achillion Pharmaceuticals, Inc. – Internal Strategic Factors

Weakness are the areas where Achillion Pharmaceuticals, Inc. can improve upon. Strategy is about making choices and weakness are the areas where an organization can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

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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 Achillion Pharmaceuticals, Inc.
Investment in Research and Development is below the fastest growing players in the industry. Even though Achillion Pharmaceuticals, Inc. is spending above the industry average on Research and Development, it has not been able to compete with the leading players in the industry in terms of innovation. It has come across as a mature firm looking forward to bring out products based on tested features in the market.
Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
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.
Financial planning is not done properly and efficiently. The current asset ratio and liquid asset ratios suggest that the company can use the cash more efficiently than what it is doing at present.
Not very good at product demand forecasting leading to higher rate of missed opportunities compare to its competitors. One of the reason why the days inventory is high compare to its competitors is that Achillion Pharmaceuticals, Inc. is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
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. Achillion Pharmaceuticals, Inc. has to build internal feedback mechanism directly from sales team on ground to counter these challenges.

Opportunities for Achillion Pharmaceuticals, Inc. – External Strategic Factors

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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 Achillion Pharmaceuticals, Inc. to drive home its advantage in new technology and gain market share in the new product category.
Government green drive also opens an opportunity for procurement of Achillion Pharmaceuticals, Inc. products by the state as well as federal government contractors.
New trends in the consumer behavior can open up new market for the Achillion Pharmaceuticals, Inc. . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Achillion Pharmaceuticals, Inc.’s products thus providing an opportunity to the company - either to boost its profitability or pass on the benefits to the customers to gain market share.
Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Achillion Pharmaceuticals, Inc. to capture new customers and increase its market share.
Organization’s core competencies can be a success in similar other products field. A comparative example could be - GE healthcare research helped it in developing better Oil drilling machines.
New customers from online channel – Over the past few years the company has invested vast sum of money into the online platform. This investment has opened new sales channel for Achillion Pharmaceuticals, Inc.. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Achillion Pharmaceuticals, Inc. an opportunity to enter a new emerging market.

Threats Achillion Pharmaceuticals, Inc. Facing - External Strategic Factors

Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Achillion Pharmaceuticals, Inc. in those markets.
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.
Rising raw material can pose a threat to the Achillion Pharmaceuticals, Inc. profitability.
Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Achillion Pharmaceuticals, Inc.
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 .
Imitation of the counterfeit and low quality product is also a threat to Achillion Pharmaceuticals, Inc.’s product especially in the emerging markets and low income markets.
Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.

Limitations of SWOT Analysis for Achillion Pharmaceuticals, Inc.

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 Achillion Pharmaceuticals, Inc.
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.

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Weighted SWOT Analysis of Achillion Pharmaceuticals, Inc.

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 Achillion Pharmaceuticals, Inc. 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 Achillion Pharmaceuticals, Inc.

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)