Allergan Strategic Management of Technology Harvard Case Solution & Analysis

Allergan Strategic Management of Technology Case Study Solution

Introduction:

Allergan’s pharmaceutical brand products are in the following therapeutic specialties: Dermatology and Esthetics, Central Nervous System, Eye Care, Women's Health and Urology, Gastroenterology and Cardiovascular ailment and Infectious illness.

This case synopsis represents the issues of the insufficient use of modern day technology, social media platforms and operating system migration. The improper use of technology may also result, in an adverse impact towards the company’s reputation and brand recognition.

As Allergan wants to expand its products in the international market such as in, Europe, Japan and China, different marketing models, tools and technical software programs are required for the success to enter the global market. The revolution of modern day technology, will result in the increase of competitive advantage, product brand awareness, and smart use of the internet is imperative to reduce the cost of marketing.

This research and analysis will include a strategic discussion of open source software, sustaining technologies and a look at B2B and B2C social media models, as the company explores new opportunities for the future. Also, the following factors will be assessed:

  • Disruptive Sustaining Technologies
  • Challenges associated with E-business
  • Challenges of social networking

Information technology experts are spending less time implementing and maintaining the basics of IT strategy, and are now adding more value to core business practices for a company. (Levie, A., 2011)

An example is the IBM survey of executive respondents, to measure several security concerns with social media business tools. Including challenges related to their brands, legal, data security privacy and unintended disclosure of company information. (Miller, D., 2012)

Also, the traditional measures of patient and healthcare experience, are no longer relevant in the emerging digital marketplace. Corporations are required to evolve into social media data and manage their online reputations. (Padmananham, P., 2017)

Disruptive vs. Sustaining Technologies:  

To measure disruptive or sustainable capabilities, data mining is formed by three categories operational, tactical and strategic business intelligence. The company will then utilize the information, to implement strategies toward business operations and technology. Using this information to formulate and implement effective strategies, to align its BI towards the business processes. These analyses help the company to evaluate, what it needs to change in its operations to move towards progress and growth. Operational activities generate data in real time, to effectively analyze the data generated and enhance the decisions making the power of the managers or operational user. Once the corporate decision is selected, the company must then strategically plan and standardize software systems, with global functionality and user accessibility.
Challenges associated with E-business:

  1. Identifying limited market segments
  2. Managing consumer trust
  3. Ensuring consumer protection

Challenges of social networking:

  1. Cyber threats
  2. Managing consumer trust
  3. Ensuring consumer protection

Challenges of new data operating system migration

  1. Mapping data process, to meet the demand of operations from local to global
  2. Train user, build functionality and practicality
  3. Pre-launch and post launch measures

Financial Analysis:

Basing on past 5 years financials, average revenue growth of Allergan is 22%, which is above average in this industry. But, comparing this is not so ideal if we consider its operating expenses growth, which is 51% on average. This means that, Allergan is failing to control its expenses. That is why even after this much growth its sales is equal to its operating expenses,by adding sales and other expenses to the figure turns profits into losses. Current year loss of US$1826m confirms the fact that Allergan’s expenses significantly exceeds its revenues just like in past 5 years.

Further considering the balance sheet figures it can be noted that, Allergan’s cash and cash equivalent have been rising rapidly,since last 2 years and have grown to US$ 1,724m in current year. This may be to facilitate growing sales in past few years, but is not a wise decision to keep cash in reserve when you have losses to deal with. However, this reserve could be to back support the current short term-investment of US$ 11,502m.

It seems that Allergan is still receiving earning from some discontinuing operations, perhaps it should re-consider the reason for cutting off those operations and may invest more in them in future, as these discontinued operations are the only reason why equity holders are still getting their dividends. Hence, the EPS figure cannot be relied upon, as the reason for its boost is merely reflecting company’s performance...................

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