From Seeking Alpha
Synergy: The Illusion Of Success Or Grounded Potential? A SWOT Analysis
Mar. 20, 2018
From the SWOT analysis
Weaknesses
- Management decision-making, critical thinking: This is the biggest weakness any firm could have. Successful firms are noted for capable management
From the conclusion:
There are two points I wish to conclude with:
First, as should be noted, I did not discuss or debate the question of whether Trulance is superior to Linzess for the very reason that the superiority of a differentiated product does not mean consumers (patients) will purchase it. To suggest otherwise exposes one to a quality trap. Without getting too far into history, one can look back at Sony’s (NYSE:
SNE) Betamax video recorder as being a very high quality, highly differentiated product that failed to win over the video recording market and was defeated by Matsushita’s (now Panasonic (
OTCPKCRFY)) VHS recorder that appealed to customers and offset the question of quality.
Second,
my experience suggests that the companies that are the most successful are those with talented management. What I learned was to “bet” on and invest in talent, specifically management talent. Now, let me be clear about that. It does not mean management that is beyond criticism, or those having never made a mistake, or those that analysts fall in love with. The truth is talented and successful management operates with an understanding of its strengths and weaknesses, thereby recognizing the full capabilities it can employ in strategic ways to offset its weaknesses and threats (as all companies have weaknesses and face threats). The key is to take advantage of the opportunities in the competitive environment.
But this does require management awareness.
I readily acknowledge that I became infatuated with a drug (Trulance), believing its differentiated potential in an organically growing product market would be the affirmed basis for success.
Alas, in so doing, I ignored the Synergy management talent; which it seems, retrospectively, lacks true, complex operational experience. This means it is missing certain contextual knowledge that would be the basis for all decisions within the company. And, we need to be clear, management decides everything – What to invest in, whom to hire, what strategies should be employed, how to execute… everything! The biggest problem when making a decision is the failure to recognize not only the external challenges but also the weaknesses inherent within the firm’s internal capabilities. This ignorance can cripple or kill strategic initiatives.
Capabilities are born of experience and, thus, learned over time. This is important because it involves making mistakes, addressing failures, figuring things out, fixing things, and having successes, all of which play into the decision making process and inform one’s instinct or intuition. Let’s face it, when facing a novel situation in a different context, people can fail spectacularly and not even know it because their measure of success is stunted by their limited vision. To this end, I fear Synergy management and its board of directors may suffer the indignities of the
Dunning-Kruger Effect.
Having been part of a due diligence team for a company that made numerous acquisitions and, having done a number of competitive analyses on companies that might be the target for acquisition, I find myself back to where I was when I first wrote about Synergy.
Whether conducting a SWOT analysis or simply reading tea leaves, I remain convinced that Synergy cannot achieve “Linzess-like” success as a stand-alone business. I admire its effort and understand that the commercialization of Trulance improves the intrinsic value of the company when being considered for acquisition. However, the reality is that the sooner management moves toward being acquired, the sooner the shorts exit, the better for long-term shareholders.