Background
Biotech Health and Life Product is one of the leading companies operating within the nutraceutical market in the United States offering its products to other countries including Australia, Brazil, and Canada among others. The company, founded in 1922, engages in the production of dietary supplements that include both vitamins and food supplements. Over the years, the company has focused much of its attention towards promoting overall flexibility in its approaches towards maintaining its competitive advantage. However, it is equally important to take note of the fact that the company has been facing increased competition from some of the other leading brands and multinational companies offering similar products. In that view, the focus for this report is to engage in an in-depth analysis of Biotech Health highlight its SWOT and PESTEL analysis, as well as, reflecting on the impacts of Porter’s five forces on its business approach.
SWOT Analysis
Strengths
Based on the analysis of the Biotech Health and Life Products' company profile, it is important to take note of the key strengths that seek to define the company's positive approach to its business structure. The first key strength noted is that the company has invested heavily in promoting its capabilities in research and development. D'Aquino (2000) argues that research and development in the pharmaceutical industry is one of the key elements that seek to build overall capacity for enhanced company performance. In this case, Biotech Health uses research and development to help in the production of quality products to match consumer expectations. The second key strength for the company is that has a strong geographical presence considering that it operates in six countries around the world. That is important in highlighting its overall structure of performance considering that it has been able to position itself as a leading brand in the nutraceutical market. Thirdly, Biotech Health and Life Products maintain an unrivaled product and brand portfolio focusing on the idea of product diversification in a bid to capturing a bigger market share. The company has been able to create a diverse range of products matching customer needs and expectations, which has been of value in building the company's overall positioning as a leading brand.
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Weaknesses
In the area of weaknesses, one of the key weakness noted with regard to Biotech Health and Life Products revolves around the fact that the company has faced notable criticism focusing on the quality of its products. The company has experienced instances where some of the products it offers to its clients have been contaminated, which is an aspect that has impacted on its position significantly
Opportunities
Regarding its opportunities, Biotech Health and Life Products have the opportunity of elevating its brand position through investment in the small Silicon Valley-based nutritional-based companies'startups. Investment in these companies would help in ensuring that the company is able to reach out to a bigger consumer platform as a way of improving its performance capacities significantly (Jain, Roy, Damle, & Jagani, 2016). Another key opportunity for the company relates to the fact that the company may invest in other global markets including Europe, Asia, and Africa, which are some of the leading consumer markets in the world today. Investment in these markets will be of value for the company, as it will help in building its global market portfolio, which is important in projecting its overall market share (Fristoe, 2018). The third opportunity for the company revolves around the need for acquisitions and merges in a bid to ensuring that the company is able to perform effectively within the consumer market. Through acquisition and mergers, Biotech Health and Life Products would be in a better position from which to establish itself as a leading brand considering that this would help increase its market share significantly.
Threats
An overview of the threats facing Biotech Health and Life Products indicates that the company is facing intense competition from some of its key competitors in the consumer market. That has posed a major challenge for the company in its bid towards increasing its market share, which has also impacted its customer base. Another key threat that the company is facing is on the issue of economic crunches, which has affected demand for its products in some of the consumer locations significantly.
PESTEL Analysis
PESTLE analysis will focus on political, economic, social, technological, legal, and environmental factors affecting Biotech Health and Life Products’ performance within the consumer market. These are:
Political Factors
Biotech Health and Life Products operate in different countries, as has been indicated above. Thus, this means that the company is facing notable political dynamics including taxation, importation excise duties, as well as, restrictions in some of the consumer markets. The company requires special licenses from the different governments in the consumer markets considering that it operates under the pharmaceutical industry, which is a highly regulated market. That has affected Biotech’s global reach considering that it has experienced major challenges in trying to match some of the set expectations in different countries.
Economic Factors
From an economic perspective, Biotech Health and Life Products have been facing notable challenges attributed to financial crises and economic crunches experienced in some of the countries it operates. The United States was hit by the global financial crisis in 2008 and 2009, which has a major impact on the economic positioning of a country, as well as, affected consumer spending capacities (Giuseppe Cicero, Cicero, & Prasad, 2017). That had a major impact on companies operating in the pharmaceutical industry including Biotech Health and Life Products among others. However, the company has come up with different economic policies for the different countries to avert such challenges.
Social Factors
From a social perspective, the main factor that has influenced Biotech Health and Life Products’ performance is the changing consumer lifestyles, which reduces demand for supplements. The company has encountered major changes in consumer attitudes towards the products that it is offering, thus, affecting its overall capacity to deliver on set objectives. That has created the need for the company to come up with an effective approach to help understand changing customer behaviors and related dynamics (Bröring, Martin Cloutier, & Leker, 2006). The approach allows the company to evaluate customer demands for its products as a key determinant of its performance within some of the leading consumer markets.
Technological Factors
Technology has had a major influence on the pharmaceutical industry not only with regard to the production of medication and supplements but also on the delivery of these products to consumers around the world. On its part, Biotech Health and Life Products have set up an automated production plant with an aim of reducing human interaction considering that this would result in contamination. The company has also adopted the idea of using its website as part of ensuring that customers are able to order for their products through the company website without having to visit the company.
Legal Factors
The main legal factor that has influenced Biotech Health and Life Products is on the issue of workplace safety and minimum wages for its employees. It is within the expectation for the company to conform with the set limitations on minimum wage, as well as, ensuring that it promotes safety for its workers. However, the company has focused on building this approach by engaging with workers’ unions in and outside the United States.
Environmental Factors
The world today maintains a higher level of consciousness on the issue of environment focusing on the need to ensuring the companies conform to the set environmental laws and policies. Biotech Health and Life Products have been on the forefront in ensuring that it matches its goals to set environmental factors as a way of improving capacity for effective delivery (Huggett, 2015). The setting up internal environmental policies has helped in boosting its position as an environmentally conscious company.
Porter’s Five Force Analysis
Porter's five force analysis with a focus on the bargaining power of customers, bargaining power of suppliers, threats of new entrants, threat of substitute products, and competitive rivalry within the company where Biotech Health and Life Products operates. These are:
Bargaining Power of Customers
An in-depth analysis of Biotech Health and Life Products’ customers and their behavior towards the products in the market indicates that these customers have a higher level of bargaining power. The high bargaining power has been brought about by the fact that they tend to have a choice in the selection of dietary supplements (Prasad, Cicero, & Petrini, 2017). Thus, this means that the company is facing a major challenge in its bid towards building its bargaining power against its customers, which has impacted its position significantly.
Bargaining Power of Suppliers
On the other hand, Biotech Health and Life Products has built a strong relationship with its suppliers of different raw materials used in the production of nutritional products delivered to customers in different consumer markets. The strong relationship created has given the company a higher buying power, which is one of the key elements that seek to build on its position in reducing the bargaining power of its suppliers. However, it is equally important to take note of the fact that the company's suppliers still maintain a significant bargaining power when compared to the company attributed to high choices offered for the suppliers. The management at Biotech Health and Life Products has been on the forefront in reducing this power.
Threats of New Entrants
Although Biotech Health and Life Products have been able to build its brand as leading producer of dietary supplements, the nutraceutical industry remains very lucrative for new companies intending to invest in the market. The threat of new entrants remains significantly high, thus, affecting capacity for other companies to increase their overall positioning in terms of building their market shares (Sankaran, & Mouly, 2007). That has created a situation where the industry has experienced a significant increase in the number of new entrants offering the same quality of supplements as those offered by this company. Ultimately, this has acted as one of the key challenges for Biotech Health and Life Products in trying to build its position, as well as, promote its market share.
Threats of Substitute Products
Biotech Health and Life Products have been facing a major challenge in trying to promote customer loyalty considering that it is experiencing a key issue due to increased competition. That has increased the number of substitute products available for its customers within the consumer market. Consequently, this has created a situation where it has become somewhat challenging for the company to establish itself as a leading brand considering that substitute products remain a key threat towards defining its performance. It has become essential for Biotech Health and Life Products to engage in in-depth research and development as part of promoting innovation and uniqueness of its products. Innovation is important, as it works towards building the overall levels of confidence that customers may have with regard to a given product (Singh, Adak, Karmakar, & Banerjee, 2015). In this case, the company is worked on the idea of building its competitive position as a leading brand through production.
Competitive Rivalry
On the issue of competitive rivalry, the pharmaceutical industry, specifically focusing on nutraceutical market, one of the key issues to note is that the number of companies competing in the market is significantly high. Biotech Health and Life Products have been facing immense competition from companies including Nestle, Personal Care- Nestle Skin Care- Galderma, SA, and Hain Celestial Group, Inc. among others. However, Biotech Health and Life Products has focused on the idea of product differentiation as a way of ensuring that it builds its capacity for effective delivery. Through product differentiation, the company has been able to highlight the value of its products when compared to some of its key competitors as a way of ensuring that it achieves its set market goals.
Company’s Vision Statement and Mission Statement
From the analysis conducted in the previous sections, using different tools, the main relationship that exists to the company vision and mission statements is that the company is working tirelessly to ensure that it achieves a higher market share to deliver safe, effective, and affordable products to its clients. The company's vision statement focuses on the idea of ensuring that the company is able to build an avenue from which to provide every individual with a healthy life. A review of the mission statement is to work on the delivery of safe, effective, affordable, and natural products to match customer expectations. The strategic plan that would help in boosting this relationship is embarking on a healthy-people campaign in the countries that it operates (Ronis, Pedersen, & Watt, 2017). The campaign will help in providing its clients with a better understanding of the products that it offers, as well as, the value that this is expected to have with regard to boosting their health.
An argument on Why the New Project Meets the Strategic Plan
The new projects meet the strategic plan, set out in the previous section, considering that it seeks to ensure that the company is able to improve on its position as a leading brand while reflecting on the idea of building customer awareness. The new project in which the company will develop products geared toward the baby boomer market reflects on the need for the company to maintain its strategic positioning by targeting a niche market. In that view, it would become much easier for the company to achieve its goal, which is to build customer awareness on its products while reflecting on its vision and mission statements. The long-term effect of the new project is that it will seek to enhance capacity for the company to achieve its strategic objectives within a limited time.
References
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Fristoe, C. (2018). Health, Sustainability, and the Political Economy of Food Labeling. Cato Journal , 38 (1), 185-201.
Giuseppe Cicero, A. F., Cicero, G., & Prasad, C. (2017). CLINICAL STUDIES WITH NUTRACEUTICALS AND HOW TO CARRY THEM OUT. Current Topics in Nutraceutical Research , 15 (2), 63-66.
Huggett, B. (2015). Biotech's wellspring—a survey of the health of the private sector in 2014. Nature Biotechnology , 33 (5), 470-477.
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Sankaran, J. K., & Mouly, V. S. (2007). Managing innovation in an emerging sector: the case of marine-based nutraceuticals. R&D Management , 37 (4), 329-344.
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