Strategic Management for Healthcare Organizations (points from the whole book)

Service Delivery (location on value chain and components)
(Top of Value Chain)
Pre-Service Activities
Point of Service Activities
After-Service Activities
Pre-Service Activities
(Top of value chain, Service delivery). Planning and activities that enable the organization to determine its customers and services that will be delivered to them.
-Marketing/Market Research
-Target Market
-Services Offered/Branding
-Pricing
-Distribution/Logistics
-Promotion
Marketing/Market Research
(Top of value chain, Service delivery, Pre-service activity)Any data gathering about the potential market itself. Customer wants and needs. Identification of recognizable groups (segments) that make up the market; information gathering to improve quality
Target Market
(Top of value chain, Service delivery, Pre-service Activity) Determination of the appropriate segment to satisfy with healthcare services. The customer, physicians, etc.
Services Offered/Branding
(Top of value chain, Service delivery, Pre-service Activity) Dissemination of information to prospective patients and other stakeholders regarding the prices, range of products and location of available services by an identified healthcare organization
Pricing
(Top of value chain, Service delivery, Pre-service activity) Determination of the charge schedule for available services
Distribution/Logistics
(Top of value chain, Service delivery, pre-service activity) actions that aid in patient/customer entry into the healthcare delivery system including appointments, registration and parking
Point of Service Activities
(Top of value chain, Service delivery)
-Clinical operations
-Quality
-Process Innovation
-Marketing
-Patient Satisfaction
Clinical Operations
(Top of value chain, Service delivery, point of service activities)- actions related to the actual delivery of healthcare to patients
Quality
(Top of value chain, Service delivery, point of service activities)- improvements in the efficiency and effectiveness of healthcare services
Process Innovation
(Top of value chain, Service delivery, point of service activities)- improvements in existing or new operational processes
Marketing
(Top of value chain, Service delivery, Point of service activity) Determination of new products, prices, identification of new customers, provision of information to customers
Patient Satisfaction
(Top of value chain, Service delivery, Point of Service Activity) Enhancement of the patient/customer health care experience
After Service Activities (Components)
(Top of value chain, Service delivery)
Follow up
Clinical
Marketing
Billing
Follow on
Clinical
Marketing
Follow up
(Top of value chain, Service delivery, After-service activity) Determination of additional services needed to supplement the initial healthcare (described in book as calling a patient in a couple weeks to see how they are feeling)
Clinical
(Top of value chain, Service delivery, after-service activity) Under both follow up and follow on. Under Follow up: Additional procedures, appointments, tracking. Under follow on: referrals to proper clinical settings.
marketing
(Top of value chain, Service delivery, after-service activity) Provision of information concerning follow on clinical settings for future (extended care) tracking of outcomes of care
Follow on
(Top of value chain, Service delivery, After Service Activity) Facilitation of the patient/customer into another healthcare setting
Support activities
(Bottom of value chain)- The activities in the value chain that are designed to aid in the efficient and effective delivery of health services. Components:
-Organization culture
-Organization Structure
-Strategic Resources
Organizational Culture
(Bottom of value chain, Support activity) The overarching environment within which the health services organization operates
-Shared assumptions
-Shared values
-Behavioral Norms
Shared assumptions
(Bottom of value chain, Support activity, organizational Culture) The assumptions employees and others share in the organization regarding all aspects of services delivery (eg: needs of patients, goals, etc)
Shared Values
(Bottom of value chain, Support activity, organizational culture) The guiding principles of the organization and its employees. The understandings people in the organization have regarding excellence, risk taking, etc)
Behavioral norms
(Bottom of value chain, Support activity, organizational culture) Understandings about behavior in the organization that can create value for patients
Organizational Structure
(Bottom of value chain, Support Activities)- Those aspects of the organizational structure that are capable of creating value for customers/patients.
-Function
-Division
-Matrix
Function
(Bottom of value chain, Support activity, Organizational Structure) structure based on process or activities used by employees (EG surgery, finance, human resources)
Division
(Bottom of value chain, Support activity, Organizational structure) Major units operate relatively autonomously subject to overarching policy guidelines (EG hospital division, outpatient division, northwest division)
Matrix
(Bottom of value chain, Support activity, Organizational structure) 2 dimensional structure where more than a single authority structure operates simultaneously (Eg interdisciplinary team with representatives from medicine, nursing, administration)
Strategic resources
(Bottom of value chain, support activity) Value-creating financial, human, informational resources and technology necessary for the delivery of health services.
-financial
-human
-information
-technology
Financial
(Bottom of value chain, Support activity, Strategic resource) Resources required to provide the facilities, equipment, and specialized competencies demanded by the delivery of health services
Human (Located under resources)
(Bottom of value chain, Support activity, strategic resource) individuals with the specialized skills and commitment to delivery health services
Information (Located under resources)
(Bottom of value chain, Support activity, strategic resource) Hardware, software, and information processing systems needed to support the delivery of health services.
Resources
Stocks of non-human factors that are available for use in producing goods and services. May be tangible (land, labor, capital), may be intangible (intellectual property, reputation, goodwill)
Porter’s 5 Forces
The level of intensity within the industry is the most critical factor in an organization’s environment.
Intensity is a function of the threat of
1. new entrants into the market
2. the level of rivalry among existing organizations
3. the threat of substitute products and services
4. bargaining power of buyers (customers)
5. bargaining power of suppliers.
Service area structural analysis
(another name for Porter’s 5 forces) provides considerable insight into the attractiveness of an industry and provides framework for understanding the competitive dynamics (the future viability of an industry). Analyzes external environment.
Strategy formulation
development of strategic alternatives, evaluation of alternatives and strategic choice. Directional strategies, adaptive strategies, market entry strategies, competitive strategies.
Development of strategy formulation
5 categories
1. directional strategies
2. adaptive strategies
3. market entry strategies
4. competitive strategies
5. implementation strategies
Directional strategies
(Step 1 of development of strategy formulation) the broadest strategies that set the fundamental direction of the organization by establishing a mission for the organization and what it wants to do. Vision: who are we? What should we be? Specify values and strategic goals. Mission, values, vision, goals
Adaptive strategies
Step 2 of development of strategy formulation. More specific than directional strategies and provide primary methods for achieving the vision (adapting to the environment). Determine the scope of the organization and specify how the organization will expand more, reduce scope, or maintain scope. (Expansion of scope, reduction of scope, maintenance of scope).
Market Entry Strategies
Step 3 of the development of strategy formulation. Provide method of carrying out the adaptive strategies (expansion of scope and the maintenance of scope strategies) through purchase, cooperation, or internal development. Not used for reduction of scope strategies.
Competitive strategies
Step 4 of the development of strategy formulation. 2 types of strategies, one that determines an organization’s strategic posture and that positions the organization vis a vis other organizations within the market. Market oriented and best articulate competitive advantage. Strategic positioning
Implementation strategies
Step 5 of the development of strategy formulation. The most specific strategies and are directed toward value-added service delivery and the value-added support areas. Individual organizational units develop objectives and action plans that carry out the value added service delivery and value-added support strategies. Service delivery, support, unit action plans.
Strategic thinking map
Hierarchy of strategic decisions and alternatives:
1. Directional strategies. 2. adaptive strategies. 3. market entry strategies. 4. competitive strategies. 5. implementation strategies.
Expansion of Scope
(Adaptive strategy) Diversification, vertical integration, market development, product development, penetration
Reduction of scope
(Adaptive strategy) divestiture, liquidation, harvesting, retrenchment
Maintenance of scope
(Adaptive strategy) enhancement, status quo
Purchase Strategy
(market entry strategy) acquisition, licensing, venture capital investment). Allow an organization to use its financial resources to enter a market quickly, thereby initiating the adaptive strategies.
Cooperation strategy
(market entry strategy) merger, alliance, joint venture. Mergers, alliances and joint ventures. Most used and most talked about strategies of the 1990’s
Development strategies
(market entry strategy) Organizations may enter new markets by using internal resources in what are called __. Takes the form of internal development, internal ventures, or reconfiguring the value chain.
Strategic posture
(competitive strategy) defender, prospector, analyzer
Positioning Strategies
(competitive strategy)
-marketwide- cost leadership, differentiation
-market segment- focus/cost leadership, focus/differentiation
Step 4 of the development of strategy formulation. Generic strategies: they were general strategies that any organization could use to position itself within a market.
Service delivery
(implementation strategies) pre-service, point of service, after service
Support Strategies
(implementation strategies) culture, structure, strategic resources
Unit action plans
(implementation strategies) objectives, actions, timeliness, responsibilities
Diversification
(Adaptive strategies, expansion of scope) Markets have been identified outside the organization’s core business that offer potential for growth. Related or unrelated.
Related diversification
(Adaptive strategies, expansion of scope) concentric- organization chooses to enter a market that is similar to its present operations. Develops a “concentric” “circle” of related businesses. Some level of synergy Within the same industry (pharmaceuticals, medical supplies, etc).
Unrelated diversification
(Adaptive strategies, expansion of scope) conglomerate- organization enters a market that is unlike its present operations. “portfolio” of separate services. Generally involves semi-autonomous divisions or strategic service units. Hospital diversifying into the operation of a restaurant, parking lot, etc.
Vertical integration
(Adaptive strategies, expansion of scope) Strategy to grow along the channel of distribution to the core operations
Forward vertical integration
(Adaptive strategies, Expansion of scope) downstream. Toward the consumer or patient. Used if: control the flow of patients through the system, faster delivery required, high level of coordination between one stage and another. industry, market seen as profitable for long term gain. Gain bargaining power.
backward vertical integration
(Adaptive strategies, Expansion of scope) Upstream: When an organization grows along channel of distribution back towards its suppliers. Control the flow of patients through the system. Scarcity of raw materials or essential inventory, deliveries are unreliable, lack of materials or supply shut down. industry/market seen as profitable long term.
Market development
(Adaptive strategies, Expansion of scope) a divisional strategy used to enter new markets with present products or services. Strategy designed to achieve greater volume through geographic service area development. Geographic market development or segment market development.
Divestiture
(adaptive strategy, reduction of scope) selling an operating unit or division to another organization. typically the unit will continue in operation. Used if: industry in long term-decline, cash needed to enter new, higher growth area, lack of expected synergy with core operation, required investment in new technology seen as too high, unbundling, too much regulation
harvesting
(Adaptive strategy, reduction of scope) products or services typically in late stages of the product life cycle. Late maturity and decline. Where industry wide revenues are expected to decline but are still currently making money. These products will ultimately be discontinued.
product development
(Adaptive strategies, Expansion of scope) Improving present products or services or extending the present product line. Enhancement or development.
liquidation
(adaptive strategy, reduction of scope). selling all or part of the organization’s assets (facilities, inventory, equipment, etc) to obtain cash. The purchaser may use the assets in a variety of ways and businesses. Used in: bankruptcy, to trim/reduce assets, superseded by new technology, organization can no longer operate.
retrenchment
(adaptive strategy, reduction of scope) Reducing the scope of operations, redefining the target market, cutting geographic coverage, reducing the segments served or reducing the product line. Market has become too diverse, market is too geographically spread out, personnel costs are too high, too many products or services, marginal or non-productive facilities.
Penetration
(Adaptive strategies, Expansion of scope). Seeking to increase market share for present products or services in present markets through marketing efforts (promotion, distribution and price)
Enhancement
(Adaptive strategies, maintenance of scope) Seeking to improve operations within present product or service categories through quality programs, increasing flexibility, increasing efficiency, spread of delivery, etc. Used if: Organization has operational inefficiencies, need to lower costs, need to improve quality
Status quo
(Adaptive strategies, maintenance of scope) Seeking to maintain relative market share within a market. Used if: Maintain market share position, maturity/late maturity in the product life cycle, product/market generating cahs bu has little potential for future growth.
Acquisitions
Part of step 3 of the development of strategy formulation. Market entry strategies (purchase strategy) for expansion through the purchase of an existing organization, a unit of an organization or a product/service.
Horizontal integration
method of obtaining growth across markets by acquiring or affiliating with direct competitors rather than using internal operational/functional strategies to take market share from them. Creation of multihospital systems.
Licensing
(Part of step 3 of the development of strategy formulation. Purchase strategy, market entry strategy). Acquiring a technology or product may be used as an alternative to acquiring a complete company. Obviate the need for costly and time-consuming product development and provide rapid access to proven technologies generally with reduced financial and marketing risk to the organization. Franchising is a common form).
Venture capital investments
(Part of step 3 of the development of strategy formulation. purchase strategy, market entry strategy) offer an opportunity to enter or try out a market while keeping risks low. Used to become involved in the growth and development of a small organization that has the potential to develop a new or innovative technology.
Internal development
uses the existing organizational structure, personnel, and capital to generate new products/services or distribution strategies. Most appropriate for products/services that are closely related to other products/services. Common for growing organizations. (Part of step 3 of the development of strategy formulation. Market entry strategies . Development strategy)
Mergers
Similar to acquisitions, however the 2 organizations combine through mutual agreement to form a new single organization often with a new name. Has been used to create integrated systems through vertical integration.
-improve efficiency and effectiveness
-enhance access
-enhance financial position
-overcome concerns about survival
Part of step 3 of the development of strategy formulation. Market entry strategies . Cooperation strategy. )
Alliances
Loosely coupled arrangements among existing organizations that are designed to achieve some long term strategic purpose not possible by any single organization. Include federations, consortiums, networks and systems. cooperative contractual agreements that go beyond normal company to company dealings but fall short of partnership.
Part of step 3 of the development of strategy formulation. Market entry strategies . Cooperation strategy.
Joint ventures
A combination of the resources of 2 or more separate organizations to accomplish a designated task. 4 most common in healthcare are
1. contractual agreements
2. subsidiary corporations
3. partnerships
4. not-for partner title holdings
Part of step 3 of the development of strategy formulation. Market entry strategies . Cooperation strategy.
Contractual agreements
Cooperation strategy. joint venture. 2 or more organizations sign a contract agreeing to work together toward a specific objective. Part of step 3 of the development of strategy formulation. Market entry strategies.
subsidiary corporations
Cooperation strategy. joint venture: a new corporation is formed (called an equity JV) usually to operate non-hospital activities. Part of step 3 of the development of strategy formulation. Market entry strategies .
partnerships
Cooperation strategy. joint venture: a formal or informal arrangement in which 2 or more parties engage in activities of mutual benefit. Part of step 3 of the development of strategy formulation. Market entry strategies .
not-for profit title holding corporation
Cooperation strategy. joint venture: tax legislation enacted in 1986 allowing not for profit organizations to form tax-exempt title hodling corporations (providing significant benefits to health care organizations engaged in real-estate ventures). Part of step 3 of the development of strategy formulation. Market entry strategies .
Internal ventures
) typically set up separate, relatively independent entities (businesses) within the organization. may be most appropriate for products/services that are unrelated to the current produces/services. (Part of step 3 of the development of strategy formulation. Market entry strategies)
Reconfiguring the value chain
changing the activities or sequence of activities it performs and therefore change how value is delivered to the customer. Requires rethinking the ways in which existing organizations serve customers. (Part of step 3 of the development of strategy formulation. Market entry strategies .)
Strategic posture
Defenders, prospectors, analyzers, and reactors. How an organization behaves within its market segment. Step 4 of the development of strategy formulation. Competitive strategies.
Defender strategic posture
focusses on a narrow market with a limited number of products or services. Organizations that engage in little search for opportunities for growth and seldom make adjustments in existing technologies, structures or strategies. Step 4 of the development of strategy formulation. Competitive strategies.
prospector strategic posture
organizations that frequently search for new market opportunities and regularly engage in experimentation and innovation. Major capability is that of finding and exploiting new products and market opportunities. Domain is usually broad and in a state of continuous development. Step 4 of the development of strategy formulation. Competitive strategies.
Analyzer strategic posture
combination of the prospector and defender strategic postures. Tries to balance stability and change. Maintain stable operations in some areas, usually their core products or businesses, but also search for new opportunities and engage in market innovations. Step 4 of the development of strategy formulation. Competitive strategies.
Reactor strategic posture
Do not have a strategy or plan and therefore such organizations are both inconsistent and unstable in their response to the environment. perceive opportunities and turbulence, but are not able to adapt effectively. Lack consistent approaches to strategy and structure and make changes primarily in response to the environmental pressures. Step 4 of the development of strategy formulation. Competitive strategies
Marketwide strategies
Determine a product or service’s place in the market vis-a-vis competitors and position the products/services of the organization to appeal to a broad audience (the entire market. Part of Step 4 of the development of strategy formulation. Competitive strategies
Market segment strategies
directed toward the particular needs of a well defined segment such as women’s health or oncology. Often called focus strategies
Cost leadership
Positioning strategy designed to gain an advantage over competitors by producing a product or proving a service at a lower cost than competitors.
Differentiation
strategy to make the product or service different or appear so in the mind of the consumer. Positioning strategy
Focus-cost leadership
low cost/price strategy directed toward a particular market segment
Focus-Differentiation
development of a unique product/service directed toward a particular market segment.
Action Plan
(Step 5: Implementation Plans) Provides consistent objectives that specify how the unit (division, hospital, pharmacy) is going to contribute to the strategy, what actions will be required to achieve the objectives and within what time period. Defines who is responsible for the actions, the resources required to achieve the objectives, and how results will be measured.
Objectives
(Step 5: implementation, part of action planning). Should reinforce strategic goals, should be measurable, should identify the time frame for accomplishment, should be challenging but attainable, should be easy to understand, should be formulated with health from individuals who will partake in their implementation).
Competency
knowledge and skill based, and therefore inherently human and may be a powerful source of sustained competitive advantage.
Technology resources
the facilities and equipment required to provide health services
Product life cycle analysis
Useful in selecting strategic alternatives based on the principle that all goods and services go through several distinct stages (Introductory, growth, maturity, decline). Provides framework for assessing existing activities as well as new products/services.
Introductory stage
(Product life cycle). Market development, product development. Sales are increasing, yet profits are negative. Few competitors. Prices are usually high, promotion is informative about the product category, and there are limited distribution outlets.
Growth Stage
(Product life cycle) Market development, product development, penetration, vertical integration, related diversification. Sales and profits are increased competing organizations enter market (analyzers) to participate in growth. Prices are increased, but begin to decline. Promotion is directed toward specifics and there is rapid growth in number of outlets.
Maturity stage
(Product life cycle) Market development, product development, penetration, enhancement, status quo, retrenchment, divestiture, unrelated diversification. End of growth and beginning of consolidation. Prices have stabilized or decreased, price promotion is common. Distribution is widespread, competitors are concerned with maintaining market share (defenders).
Decline stage
(Product life cycle) Divestiture, liquidation, harvesting, unrelated diversification. Total revenues and profits for the product or service are decreasing and will likely decrease over time.
Delphi Method
Popular, practical and useful approach for analyzing environmental data. May be used to identify and study current and emergent trends within each environmental category.
Nominal Group Technique (NGT)
a group is convened to address an issue, such as the impact of consolidation within the health care industry. Each individual independently generates a list of ideas surrounding the issue. Following, members take turns reporting one idea at a time to the group. Members are encouraged to build on the ideas of the others.
Brainstorming group
convened for the purpose of understanding the issue, the impact of an issue on an organization or generating strategic alternatives. Stimulates creativity. Can bring up even risky ideas.
Focus groups
bring together 10 to 15 key individuals to develop, evaluate, and reach conclusions regarding environmental issues.
Strategic management
Fundamental in leading organizations in dynamic environments. Provides direction and momentum for change. Helps an individual organization respond to state and federal policy/planning efforts as well as other external forces.
Health Policy/Planning
Implementation of local, state, and federal health policy and affects a variety of local, state, and federal health policy. Designed to 1. Enhance qual of care. 2. Provide or control access to care and 3. contain costs.
Intent of health policy
to provide the context for the development of health care infrastructure as a whole.
Analytical/Rational Approach
In strategic management, rely on the development of a logical steps of steps or processes (linear thinking). Similar to a map.
Emergent models
Relay on intuitive thinking, leadership and learning and are viewed as being part of managing. Similar to a compass.
Compasses
Helpful when leadres are not sure where they are and only have a general sense of direction.
Map
Useful to develop a strategy(____) as best they can from their understanding of the external environment and by determining the capabilities of the organization.
Strategic thinking
individual, intellectual process, a mindset or a method of intellectual analysis that asks people to position themselves as leaders and see the big picture.
Leadership
performing art- a collection of practices and behaviors- not a position.
Strategic planning
the periodic process of developing a set of steps for an organization to accomplish its mission and vision using strategic thinking. Provides sequential step by step process. Involves periodic group thinking. Requires data/info but incorporates consensus and judgment. Establishes organizations focus. Facilitates consistent decision making. Results in documented strategic plan.
Strategy
set of guidelines or plan an organization chooses to ensure decision consistency and move it from where it is today to a desired state some time in the future. Road map to the future. 1. External analysis. 2. Internal environmental analysis and 3. development or refinement of the organization’s directional strategies.
managing strategic momentum
Concerns the day to day activities of managing the strategy to achieve the strategic goals of the organization. The actual work to accomplish objectives, decision making process, style and culture, evaluation and learning, Planning and implementation.
Unrealized strategy
Strategy that does not work out as planned
Emergent strategy
unexpected strategy
Realized strategy
strategy that works out
System
a perceived whole whose elements hang together because they continually affect each other over time. Set of interrelated elements
Systems approach
requires strategic managers to define the organization in broad terms and identify the important variables and interrelationships that will affect decisions.
Corporate level strategy
What business should we be in? Consider multiple, sometimes unrelated markets that are typically based on return on investment, market share or potential market share and system integration.
Division level strategies
More focused and provide direction for a single business type. Most often concerned with position the division to compete.
Organizational level strategy
concern one organization competing within a specific well defined service area.
Unit level strategies
Support organizational strategies through accomplishing specific objectives
Environmental analysis
largely strategic thinking and strategic planning and consists of understanding the issues in the external environment to determine the implications of those issues for the organization
External environmental analysis
attempts to identify, aggregate and interpret environmental issues as well as provide information for the analysis of the internal environment and the development of the directional strategies. Seeks to eliminate surprises of the external environment.
Strategic awareness
thoughtful detection and interpretation of subtle signals of change.
Goals of environmental analysis
1. identify and analyze current important issues and changes that will affect the organization.
2. Detect and analyze early or weak signals of emerging issues and changes that will affect the organization.
3. To speculate on the likely future issues and changes that will have significant impact on the organization.
4. to classify and order issues and changes generated by outside organizations.
5. To provide organized information for the development of the organization’s internal analysis, mission, vision, values, goals, strategy,
6. To foster further strategic thinking throughout the organization
General environment
members may be broadly classified. Government institutions, business organizations, educational institutions, religious institutions, research organizations and foundations, individual consumers.
Health care system (5 segments)
Organizations that regulate primary and secondary providers. Organizations that provide health services (primary providers). Organizations that provide resources for the health care system (secondary providers). Organizations that represent the primary and secondary providers. Individuals involved in health care and patients (consumers of healthcare services).
Primary providers
Organizations that provide health services
Secondary providers
Organizations that provide resources for the health care system.
4 Fundamental processes common to environmental analysis efforts
1. Scanning to identify signals of environmental change.
2. Monitoring identified issues.
3. Forecasting the future direction of the issues.
4. Assessing the organizational implications of the issues.
Scanning
Window/lens to the external world. View external environmental information. Organized information into desired categories. Identify issues within each category.
Monitoring
Tracking of issues identified in the scanning process. Specify the sources of data (organizations, individuals, or publications). Add to the environmental database. Confirm or disprove issues (trends, developments, dilemmas, and possibility of events). Determine the rate of change within issues.
Forecasting
Extend the trends, developments, dilemmas, or occurrence of an event. Identify the interrelationships between issues and between environmental categories. Develop alternative projections.
Assessing
Evaluate the significance of the extended (forecasted issues) to the organization. Identify the forces that must be considered in the formulation of the vision, mission, internal analysis and strategic plan.
Strategic issues
trends, developments, dilemmas, and possible events that affect an organization and its position within its environment.
Issue identification and extrapolation
matter of identifying issues and then, from exiting data anticipating the importance of the issue and likelihood that it will remain an issue.
Expert opinion
Used to monitor, identify, monitor, forecast, and assess environmental trends. Play a key role in shaping and extending the thinking of leaders.
Dialectic inquiry
Point and counterpoint process of argumentation
Stakeholder analysis
based on the belief that there is a reciprocal relationship between an organization and certain other organizations, groups, and individuals.
Stakeholders
organizations, groups, and individuals that have an interest or “stake” in the success of the organization.
scenario
coherent story about the future, using the world of today as a starting point
service area competitor analysis
attempts to further define and understand an organization’s environment through identifying specific service category issues, identifying competitors, determining the strengths and weaknesses of those rivals and anticipating their strategic moves.
competitive advantage
the means by which the organization seeks to develop cost advantage or to differentiate itself from other organizations.
SWOT: Strengths, weaknesses, opportunities, threats
A way to display pertinent external issues and internal strengths and weaknesses. Involves listing the organization’s strengths and weaknesses as well as perceived external opportunities and threats. Does not provide inside into what strategy decisions might result from the list of strengths and weaknesses.
TOWS: Threats, Opportunities, Weaknesses and Strengths
(matrix) was developed to provide a better way to develop and evaluate specific adaptive strategic alternatives. Internal strengths and weaknesses and matched against external environmental opportunities and threats to foster strategic thinking concerning adaptive strategy.
External/Internal Strategy Matrix
adaptive strategic alternatives are suggested by the interactions of the seven sets of variables: long and short term competitive disadvantages and advantages, general, health care, and competitive issues.
BCG portfolio analysis
graphically portrays differences among the various products/services: stars, cash cows, problem children and dogs, in terms of relative relative market share and growth rate.
Strategic Position and Action Evaluation (SPACE)
An external, 2 dimensional portfolio analysis (BCG) is used to determine the appropriate strategic profile of the organization. *This is the numbers and graph one.
Aggressive Profile
SPACE This profile is typical in an attractive service category with little environmental turbulence. The organization enjoys a definite competitive advantage, which it can protect with financial strength. The critical factor is the entry of new competitors. Organizations in this situation should take full advantage of opportunities, look for acquisition candidates in their own or related markets, increase market share and concentrate resources on products having a definite competitive advantage.
Competitive Profile
SPACE Typical in an attractive service category. Organization enjoys a competitive advantage in a relatively unstable environment. Critical factor is financial strength. Should acquire financial resources to increase marketing thrust, add to the sales force, extend or improve the product line, invest in productivity, reduce costs, protect competitive advantage in a declining market and try to merge with cash-rich organization.
Conservative profile
Typical in a stable SPACE market with low growth. Focusses on financial stability. Critical factor is product competitiveness. Organizations in this situation should prune the product line, reduce costs, focus on improving cash flow, protect competitive products, develop new products and gain entry into more attractive markets.
Defensive profile
This profile is typical SPACE of an unattractive service category in which the organization lacks a competitive product and financial strength. The critical factor is competitiveness. Organizations in this situation should prepare to retreat from the market, discontinue marginally profitable products, aggressively reduce cost, cut capacity and defer or minimize investments.
Strategic alternatives for SPACE quadrants: Conservative
Status Quo
Unrelated Diversification
Harvesting
Strategic alternatives for SPACE quadrants: Defensive
Divestiture
Liquidation
Retrenchment
Strategic alternatives for SPACE quadrants: Aggressive
Related diversification
Market development
Product Development
Vertical Integration
Strategic alternatives for SPACE quadrants: Competitive
Penetration
Enhancement
Product Development
Market Development
Status Quo
Program evaluation
Useful in organizations where market share, service category strength and competitive advantage are not particularly important or are not relevant *not for profit, state or federally funded institutions like county public health dept.
Needs/Capacity Assessment
community needs must be assessed vis a vis the organization’s ability/capacity to address those needs
Community need
1. function of a clear community requirements: environmental, sanitation, disease control, etc.
2. The degree to which other institutions fill the identified health care gaps: both public and private
3. Public/Community health objectives
Organizational capacity
The organization’s ability to initiate, maintain and enhance its set of adaptive strategy programs. Composed of 1. funding to support programs. 2. Other organizational resources and skills 3. the program’s fit with the mission and vision of the organization.
Program priority setting
Ranking programs and setting priorities. Significant because community needs: both the need itself and the severity of the need are constantly changing and organizational resources in terms of funding and capacity are limited
Q sort evaluation
useful when experts may differ on what makes one choice preferable over another. Ranking the choices using a ____ procedure, participants see where there is a consensus. Overcomes the problem of all programs being ranked as very important based on some set of assumptions. Decks of cards.
Q Methodology
Set of philosophical, psychological, statistical, and psychometric ideas oriented to research on the individual. .
Market Entry Strategies (list them)
Acquisition, licensing, venture capital investment, merger, alliance, joint venture, internal development, internal venture, and reconfiguring the value chain
Re-engineering
Total redesign of a processes before a strategy can be implemented.
Value adding service delivery strategies
pre-Service, point of service and after service strategies. Critical to the success of the organization because they are the principle methods for creating value.
Point-of-Service
transformational process that incorporates an organization’s resources, competencies, and capabilities into value-adding service delivery.
Mass customization
Can be accomplished by a series of modular approaches to prevention and care, highly articulated and well supported by IT. Clinical pathways are an example.
value-adding support activities
Lower portion of the value chain. Includes the organization’s culture, structure, and strategic resources
Culture
Implicit, invisible, and intrinsic informal consciousness of the organization that guides behavior of individuals and shapes itself out of their behavior: shared assumptions, shared values, and behavioral norms.
Functional structures
organize activities around the mission-critical activities or processes of the organization and are the most prevalent structures for single product/service and narrowly focused organizations.
Divisional structures
common in organizations that have grown through diversification, vertical integration and aggressive market/product development. Used to break down the organization into more manageable and focused parts. Creates several smaller, more focused semi-autonomous strategic business/service units. (SBUs/SSU’s).
Matrix structure
Most appropriate when organization’s have numerous products or projects that draw on common functional expertise. Organize around problems to be solved rather than functions or products geographically. Foster creativity and innovation in the organization. Effective for rapid product development and can accommodate a wide variety of product/projects
Strategic information system (SIS)
Decision support system. Attempts to take vast quanitities of unorganized data and turn them into useful information to enable managers to make better decisions. Involve organizing the data, selecting the models that will be used to analyze the data and interpreting the output.
Strategic technologies
concern the type of facilities, type and sophistication of equipment and management of technology within the organizations.
Facilities
broad term used to delineate the physical environment of the healthcare organization. Shell in which health care is delivered
First of Porter’s 5 forces
Threat of New Entrants into the Market
Second of Porter’s 5 forces
Threat of substitute products or services
Third of Porter’s 5 forces
Bargaining power of customers (buyers)
Fourth of Porter’s 5 Forces
Bargaining power of suppliers
Fifth of Porter’s 5 Forces
Intensity of competitive rivalry
Strategic Management Processes
Strategic Thinking, Strategic Planning, Managing Strategic Momentum
Situational analysis
External analysis, internal analysis, directional strategies
Planning the implementation
service delivery strategies, support strategies, action plans
Managing strategic momentum
managerial action, strategy evaluation, emergent learning, re-initiate strategic thinking
strategic thinking
external orientation, analyze data, question assumptions, generate new ideas.
Strategic Planning
situational analysis, strategy formulation, planning the implementation
Leading strategically
Strategic thinking, strategic planning, managing strategic momentum