Case study and comparative strategic analysis of Roche AG and Health's Angels

Term Paper, 2017

22 Pages, Grade: 1,0


Table of Contents

1. Introduction
1.1 Core Competency Analysis
1.1.1 Core Competencies of Roche AG
1.1.2 Core Competencies of Health’s Angels
1.2 Stakeholder Analysis
1.2.1 Stakeholder Analysis of Roche AG
1.2.2 Stakeholder Analysis of Health’s Angels
1.3 PEST-Analysis for Pharmaceutical Industrie
1.3.1 Political Factors
1.3.2 Economical Factors
1.3.3 Social Factors
1.3.4 Technological Factors

2. Main Analysis
2.1 Portfolio Analysis
2.2. Value Net Analysis
2.2.1.Threat of new entrants
2.2.2.Threat of substitute goods
2.2.3 Bargaining power of buyers
2.2.3 Bargaining power of suppliers
2.3.4 Rivalry among existing competitors
2.3. Value Chain Analysis
2.3.1 Value Chain Analysis of Roche AG
2.3.2 Value Chain Analysis of Healths Angels

3. Conclusion & SWOT Analysis
3.1.1 SWOT Roche AG
3.1.2 SWOT Health’s Angels
3.2. Overall Recommendation & Discussion

1. Introduction

“ Strategy without tactics is the slowest way to victory. Tactics without strategy is the noise to defeat. ”

Sun Tzu, 544-496 BC

The digital transformation of the health market is gathering pace.The health sector is also expected to grow enormously in the next few years. The global market volume is expected to more than double from almost $ 80 billion $ by 2015 to more than 200 billion $ by 2020.1 Innovative business models ensure that new suppliers are able to get shares in the market. Thus, they are becoming a direct competition for traditional companies across the entire value chain. As a result, the question is clear for all parties involved:

“ How can companies in the pharmaceutical sector benefit from digitalization and thus grow? ”

A possible answer to this can be the business model "Healths Angels”, which was developed as part of the "Agorize e-pocrate" student challenge. Therefore, the developed business model is to be compared with that of the pharmaceutical company F. Hoffmann-La Roche AG in order to determine a useful strategic alignment.

In the first place, an analysis of the current market situation is offered, to provide an overview of the status quo. Both, Roche AG and the business model of “Healths Angels”, are first presented with their core competencies, in order to identify the stakeholders afterwards. Subsequently, the political, economic, sociological and technological factors will be shown for an external analysis. This step also leads to the next point, the Porter’s Five Forces model, which helps to gain a holistic view of an industry by considering barriers to entry, supplier power, buyer power, threat of substitution and competition.

An additional internal analysis provides a good help to identify strengths and weaknesses. However, before a final recommendation about the strategic alignment can be made, the value chain of both companies must be analysed and shown. A portfolio analysis provides the foundation for a possible strategy development and investment decisions for Roche AG. The final SWOT analysis identifies the strengths, weaknesses, opportunities and threats for both companies. After this, a final recommendation will be drawn for both companies, in order to draw a conclusion, how both can not only grow but also benefit from it in the course of digitization.

1.1 Core Competency Analysis

To evaluate companies about their strategic orientation, competitive advantage is at the core of firm’s success or failure2. According to Prahalad and Hamel, core competence of a corporation is its “collective knowledge about how to coordinate diverse production skills and technologies”.3 Hafeez et al refer to core competencies as “the crown jewels of a company”4 Taking into account intense competitive rivalry in pharmaceutical industry, Roche faces the importance of sustaining strong core competencies, such as innovation, product range and quality, and knowledge. Javidan notes that core competencies represent the highest point of development of company’s strategic business units and respond directly to the mission and vision statements of the company as well as corporate strategy. 5

1.1.1 Core Competencies of Roche AG

The major concept that refers to core competency is harmonization of processes and operations, which is characteristic for Roche. The purpose of Roche is “Doing now what patients need next”.6 This statement reveals innovative strategy of the company as well as signifies its aim to be always ahead of its time and rivals. Thus, Roche has a competitive edge in the pharmaceutical market and industry due to its commitment to innovations. As of 2014, 17,566 employees of the company were employed in research and development of pharmaceutical and diagnostics products7. Roche's diagnostics division leads in the area of in-vitro diagnostics. Roche's pharmaceuticals division has several marketed products in five main therapeutic areas such as oncology, immunology, ophthalmology, infectious diseases and neuroscience. According to the data, the number of patients who participated in phase I-IV clinical trials in 2014 equalled 367,283, while the amount of research and development investments equalled 8.9 billion CHF. Therefore t can be concluded, that beside the named factors, R&D is one of the key factors of Roches success.8

1.1.2 Core Competencies of Health’s Angels

According to the definition of core competency, the concept of harmonization of processes and operations can also be found at the business model of “Health’s Angels”. The Main purpose of “Health’s Angels” is “We take care of your health”. In order to achieve that goal, “Health’s Angels” is offering express deliver drugs to their customers. This service can be identified as the core competency of the business of “Health’s Angels”. Since this business model is in the very beginning of its operations, we cannot provide further data in order to evaluate other core competencies.

1.2 Stakeholder Analysis

The aim of stakeholder analysis is to provide decision makers with information about the individuals and groups that may affect the achievement or otherwise of their goals. This makes it easier to anticipate problems, gain the support of the most influential stakeholders, and improve what the organisation offers to different groups and individuals and how it communicates with them.9

In order to evaluate to which degree the claims of the different stakeholders can affect a company, it is necessary to classify the stakeholders based on power to influence, the legitimacy of each stakeholder’s relationship with the organization, and the urgency of the stakeholder’s claim on the organization.10

1.2.1 Stakeholder Analysis of Roche AG

Abbildung in dieser eseprobe nicht enthalten

Figure 1: Stakeholders Matrix of Roche AG 11

According to the information about their stakeholder engagement, Roche has a variety of external stakeholders they need to work with very closely. Beside the classical key players, such as shareholders or suppliers, it is a key factor for Roche to work together with the government of the different markets they operate. This kind of Cooperation will be very important to develop or strengthen healthcare infrastructures, in order to create new sales markets such as Africa or Asia.12

Since Roche is dependent on their R&D department, it is important to keep the employees satisfied. It’s also recommended to have a enforceable executive Board on top of such big organisations.Last but not least should the patients be mentioned, as well as healthcare professionals, since the have a big influence on Roche’s sales volume. These groups should be very well informed about the activities of Roche.13

1.2.2 Stakeholder Analysis of Health’s Angels

Abbildung in dieser eseprobe nicht enthalten

Figure 2: Stakeholders of Health’s Angels according to Mitchell

The Stakeholder analysis of Health’s Angels shows a very typical allocation for a new started business.So it can be concluded, that business angels, belong to the most important stakeholders of a start up company, alongside the co founders, customers an partner companies. While the Venture Capitalists should be kept satisfied, on the other hand the mentors of a start up can be kept informed about the developments.

1.3 PEST-Analysis for Pharmaceutical Industrie

Aside from the company’s internal resources and industry factors, there are several other macro-economic factors that can have a profound impact on the performance of a company. In particular situations such as new ventures or product launch ideas, these factors need to be carefully analyzed in order to determine how big their role in the organization’s success would be.14

1.3.1 Political Factors

In terms of political factors it is important to mention the risk of changing regulations in the sphere. By all means, the major task of the government is to ensure safety of pharmaceutical products since they directly affect people’s well-being, health and life overall. Despite the fact that people can react differently to various pharmaceuticals, the government establishes registration procedures in order to check them for general health risks. In particular, the European Medicines Agency recently introduces new approach to the management of adverse reactions15. While Roche operates in Switzerland, the company’s products are distributed worldwide, which implies that the company has to deal with a vast variety of local, regional and international laws. Regulations can also represent market entry barriers. Besides specific legislation that regulates production and distribution of pharmaceuticals, Roche, similarly to any other company, is subject to laws of every country it operates in as well as regional and international laws.


1 Roland Berger: Kaltenbach, T.; Bösch, L.; Erharter, M.; Fath, S.; Hosseini, M.; Magunia, P.: Digital and disrupted: All change for healthcare. In: Think Act 2016, Nr. 3, p. 3,7

2 Porter, M. Competitive advantage. New York: Free Press. 1985.

3 Prahalad, Coimbatore K., and Gary Hamel. "The core competence of the corporation." In Strategische unternehmungsplanung — strategische unternehmungsf ü hrung, pp. 275-292. Springer Berlin Heidelberg, 2006. P. 275.

4 Hafeez, Khalid, YanBing Zhang, and Naila Malak. "Core competence for sustainable competitive advantage: A structured methodology for identifying core competence."IEEE transactions on engineering management 49, no. 1, 2002, p.28.

5 Javidan, Mansour. "Core competence: what does it mean in practice?."Long range planning 31, no. 1, 1998, p.60-71.

6 Roche: About Us. , 2017. (accessed 29 January 2017).

7 Ibid.

8 Ibid.

9 Fletcher, A., et al. (2003). "Mapping stakeholder perceptions for a third sector organization." in: Journal of Intellectual Capital 4(4): 505 - 527.

10 Mitchell, R. K., B. R. Agle, and D.J. Wood. (1997). "Toward a Theory of Stakeholder Identification and Salience: Defining the Principle of Who and What really Counts." in: Academy of Management Review 22(4): 853 - 888.

11 Ibid.

12 160215_stakeholder_engagement_2015_en.pdf 2017 (accessed 29 January 2017).

13 Ibid.

14 Müller-Stewens, G., & Lechner, C. (2005). Strategisches Management: Wie strategische Initiativen zum Wandel führen; der St. Galler General Management Navigator (3rd ed.). Stuttgart: Schäffer-Poeschel.

15 PWC. “From vision to decision: Pharma 2020”, assets/pwc-pharma-success-strategies.pdf, 2016, (accessed 29 January 2017).

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Case study and comparative strategic analysis of Roche AG and Health's Angels
BSP Business School Berlin (form. Potsdam)
Strategic Managment & Controlling
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ISBN (Book)
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case, roche, health, angels
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Oguzcan Dur-Schmid (Author), 2017, Case study and comparative strategic analysis of Roche AG and Health's Angels, Munich, GRIN Verlag,


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