Axsome Therapeutics, Inc. SWOT Analysis / Matrix

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

The Axsome Therapeutics, Inc. is one of the leading organizatations in its industry. Axsome Therapeutics, 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 helps 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 Axsome Therapeutics, Inc. to develop four types of strategies:

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

SWOT Matrix Strategies Objective

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

Step by Step Guide to Axsome Therapeutics, Inc. SWOT Analysis

Strengths of Axsome Therapeutics, Inc. – Internal Strategic Factors

As one of the leading companies in its industry, Axsome Therapeutics, Inc. has numerous strengths that enable 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 Axsome Therapeutics, Inc. are –

Read - Axsome Therapeutics, Inc. Porter 5 Forces Analysis & Industry Analysis
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• Successful track record of developing new products – product innovation.
• Superb Performance in New Markets – Axsome Therapeutics, 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.
• Good Returns on Capital Expenditure – Axsome Therapeutics, Inc. is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
• Strong Free Cash Flow – Axsome Therapeutics, Inc. has strong free cash flows that provide resources in the hand of the company to expand into new projects.
• 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.
• 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.
• Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
• Strong Brand Portfolio – Over the years Axsome Therapeutics, Inc. has invested in building a strong brand portfolio. The SWOT analysis of Axsome Therapeutics, Inc. just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.

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Weakness of Axsome Therapeutics, Inc. – Internal Strategic Factors

Weakness are the areas where Axsome Therapeutics, Inc. can improve upon. Strategy is about making choices and weakness are the areas where a company can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

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• Not highly successful at integrating firms with different work culture. As mentioned earlier even though Axsome Therapeutics, Inc. is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
• Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Axsome Therapeutics, Inc. 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.
• 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.
• High attrition rate in work force – compare to other organizations in the industry Axsome Therapeutics, Inc. has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
• 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.
• The marketing of the products left a lot to be desired. Even though the product is a success in terms of sale but its positioning and unique selling proposition is not clearly defined which can lead to the attacks in this segment from the competitors.
• 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. Axsome Therapeutics, Inc. has to build internal feedback mechanism directly from sales team on ground to counter these challenges.

Opportunities for Axsome Therapeutics, Inc. – External Strategic Factors

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• Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Axsome Therapeutics, 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.
• 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.
• The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Axsome Therapeutics, Inc. to increase its profitability.
• The new technology provides an opportunity to Axsome Therapeutics, Inc. to practices differentiated pricing strategy in the new market. It will enable the firm to maintain its loyal customers with great service and lure new customers through other value oriented propositions.
• 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 Axsome Therapeutics, 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.
• Government green drive also opens an opportunity for procurement of Axsome Therapeutics, Inc. products by the state as well as federal government contractors.
• The market development will lead to dilution of competitor’s advantage and enable Axsome Therapeutics, Inc. to increase its competitiveness compare to the other competitors.
• Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Axsome Therapeutics, Inc..

Threats Axsome Therapeutics, Inc. Facing - External Strategic Factors

• Liability laws in different countries are different and Axsome Therapeutics, Inc. may be exposed to various liability claims given change in policies in those markets.
• Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Axsome Therapeutics, Inc.
• The demand of the highly profitable products is seasonal in nature and any unlikely event during the peak season may impact the profitability of the company in short to medium term.
• No regular supply of innovative products – Over the years the company has developed numerous products but those are often response to the development by other players. Secondly the supply of new products is not regular thus leading to high and low swings in the sales number over period of time.
• New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
• Rising raw material can pose a threat to the Axsome Therapeutics, Inc. profitability.
• Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Axsome Therapeutics, Inc.   in those markets.
• New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .

Limitations of SWOT Analysis for Axsome Therapeutics, 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 Axsome Therapeutics, 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 Axsome Therapeutics, 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 Axsome Therapeutics, 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 Axsome Therapeutics, 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)