Valeant Pharmaceuticals International, Inc. SWOT Analysis / Matrix

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

The Valeant Pharmaceuticals International, Inc. is one of the leading firms in its industry. Valeant Pharmaceuticals International, Inc. 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 firm 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 Valeant Pharmaceuticals International, 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 firm can use to exploit external opportunities, counter threats, and build on & protect Valeant Pharmaceuticals International, Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to Valeant Pharmaceuticals International, Inc. SWOT Analysis

Strengths of Valeant Pharmaceuticals International, Inc. – Internal Strategic Factors

As one of the leading organizations in its industry, Valeant Pharmaceuticals International, 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 Valeant Pharmaceuticals International, Inc. are –

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• Strong Free Cash Flow – Valeant Pharmaceuticals International, 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.
• Strong distribution network – Over the years Valeant Pharmaceuticals International, Inc. has built a reliable distribution network that can reach majority of its potential market.
• Good Returns on Capital Expenditure – Valeant Pharmaceuticals International, Inc. is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
• 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.
• Automation of activities brought consistency of quality to Valeant Pharmaceuticals International, Inc. products and has enabled the company to scale up and scale down based on the demand conditions in the market.
• Highly skilled workforce through successful training and learning programs. Valeant Pharmaceuticals International, 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.

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Weakness of Valeant Pharmaceuticals International, Inc. – Internal Strategic Factors

Weakness are the areas where Valeant Pharmaceuticals International, 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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• 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 Valeant Pharmaceuticals International, Inc.
• 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 Valeant Pharmaceuticals International, 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. Valeant Pharmaceuticals International, Inc. has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
• Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
• 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.
• Investment in Research and Development is below the fastest growing players in the industry. Even though Valeant Pharmaceuticals International, 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.
• Limited success outside core business – Even though Valeant Pharmaceuticals International, Inc. is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.

Opportunities for Valeant Pharmaceuticals International, Inc. – External Strategic Factors

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• Government green drive also opens an opportunity for procurement of Valeant Pharmaceuticals International, Inc. products by the state as well as federal government contractors.
• Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Valeant Pharmaceuticals International, Inc..
• Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Valeant Pharmaceuticals International, Inc. to capture new customers and increase its market share.
• The new technology provides an opportunity to Valeant Pharmaceuticals International, 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.
• 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 Valeant Pharmaceuticals International, Inc. in other product categories.
• Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Valeant Pharmaceuticals International, Inc. an opportunity to enter a new emerging market.
• New trends in the consumer behavior can open up new market for the Valeant Pharmaceuticals International, Inc. . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
• The market development will lead to dilution of competitor’s advantage and enable Valeant Pharmaceuticals International, Inc. to increase its competitiveness compare to the other competitors.

Threats Valeant Pharmaceuticals International, Inc. Facing - External Strategic Factors

• 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.
• Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Valeant Pharmaceuticals International, Inc.
• Imitation of the counterfeit and low quality product is also a threat to Valeant Pharmaceuticals International, Inc.’s product especially in the emerging markets and low income markets.
• The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
• Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
• Liability laws in different countries are different and Valeant Pharmaceuticals International, Inc. may be exposed to various liability claims given change in policies 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.
• Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Valeant Pharmaceuticals International, Inc.   in those markets.

Limitations of SWOT Analysis for Valeant Pharmaceuticals International, 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 Valeant Pharmaceuticals International, 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 Valeant Pharmaceuticals International, 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 Valeant Pharmaceuticals International, 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 Valeant Pharmaceuticals International, 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)