Strategic Management of Health Care Organizations

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Strategic Management of Health Care Organizations

Strategic Management of Health Care Organizations
HSA 403 Answer three of the questions that appear below.  Your total submission should not exceed five (5) pages.  Set your margins at one inch on all sides, one and a half spaces and twelve-point font. Keep in mind that each question has more than one part.  Be sure to answer all parts of the questions. Make certain that you cite sources appropriately.  If you do indeed cite a source, explain it – explain why is helps answer the particular question. CHOOSE THREE FROM THESE FOUR QUESTIONS!!!!!   Explain what resources, competencies, capabilities are, and how they can be used to create value (not the value chain) and competitive advantage.  Be sure to consider capabilities and how do they affect resources and competencies. How does the use of the Five Forces Model help to identify the major forces that impact recruiting and retaining customers is a specific service area Define, compare and contrast Strategic Planning, Strategic Thinking and how they impact and shape Strategy and Strategic Management. Define Mission, Vision and Values and explain how they are the foundation for strategy development and implementation. Make sure that you cite sources appropriately and include references.  DO NOT USE SOURCES OTHER THAN THE TEXT AND ASSIGNED ARTICLES. Text: Strategic Management of Health Care Organization 8th Edition Ginter, Duncan, Swayne Submit your test through Blackboard.  It is Due 3/20, 11:59 PM
Strategic Management of Health Care Organizations
More of Market Segmentation Eric Berkowitz is a Professor of Marketing at the University of Massachusetts and has written many textbooks on Health Care Marketing. This document summarizes concepts from his textbook, The Essentials of Health Care Marketing (Jones and Bartlett). Market segmentation is when we identify groups of consumers who have similar needs and we focus on those needs so that we can recruit and retain customers or patients. In health care we can look at obvious segment like diagnosis (diabetes), age (geriatrics) ethnic groups (Asian Americans) and any combination. We can also look at other factors to help us recruit groups/segments. By segmenting the market, we are in a better position to understand it and apply the four “P’s” of marketing used to recruit and retain customers: product or service mix that the customer wants, price that the customer is willing to pay, promotion necessary to make the customer aware of the product or service and the place necessary to distribute the serves (how many clinics are needed to recruit and retain customers. Segmentation can help us our organization take a mixed group of patients and make it more homogeneous and easier to serve. The South Bronx has a large number of children who are obese, diabetic and asthmatic. However, when we segment this market, we may find neighborhoods that have greater proportions of children who are just obese, or just diabetic, or just diabetic and obese. This helps us tailor the services to the specific needs (this is where epidemiological data is very helpful as market data). Our organization is in a better position to develop specific messages to potential customers that are narrow – written specifically for this group. This is known as targeted marketing. Our organization may decide on a concentration strategy focusing our resources on one segment of the market (concentration = segmentation). It could be the largest segment in terms of the number of people affected or the smallest. Small or narrow segments of the market are known as niches. The organization can take their basic product, modify to meet the needs of potential customers (product differentiation) and go after multi-segments of the market. So how to segment the market; there are a number of ways: Socio-demographic factors: Age, gender ethnicity, Income Geographic segmentation: what neighborhoods or service areas are we getting customers from or where do we want to compete Lifestyle or social class Usage segments the market based upon the service that is actually utilized by the market being served. Usage can be analyzed based on usage rates, type of usage (i.e. what clinical services are used based upon diagnosis/medical problem ), brand loyalty (i.e. patients who will only go to the Montefiore Medical Group clinics) and benefits (i.e. toothpaste – some want whitening, some want better mouth wash features, some want gum disease features) Age cohorts segmentation Depression cohort – seniors today, who have specific health care needs World War II, came of age during the second world war, the so called greatest generation Post War, came of age after World War II Baby Boomers born between 1946-54 and a subgroup of “late boomers” 55-66 who have different behavior from the older cohort members Generation X born 1966-1977 N-Gen born 1978 to 1985 Millennial born 1986 thru 2000 These groups have certain unique characteristic that make them different from each other. They also have different health care needs based upon the stage of life that they are in.
Strategic Management of Health Care Organizations
Porter’s Five Forces Model helps managers understand the competitive dynamics in specific service area. Strategic managers can use this analysis to determine if this specific service area is worth entering or remaining if the organization is already in it. The model helps us understand how hard it is for an enterprise to compete in such a service area. It does this by identifying the forces that drive competition. New entrants to a service area are a threat to the existing service providers. They can increase the overall competitive intensity in the service area. When they enter the service area they often force lower prices for services or increase the cost to operate because of enhancement that are required to retain customers. Porter identifies a number of barriers that make it hard for new organizations to enter the market. Even though the potential new entrants can be limited by these barriers, any new entrant can increase the competitive intensity of the service area. Bargaining powers of Suppliers and Buyers can also increase the competitive intensity of a service area. Buyers (i.e.: patients, MD groups that provide the patients or third party payers) seek the least costly service and/or the service with the most enhancement. A limited number of buyers have strong bargaining power. They can force lower prices and enhancements that increase cost. Suppliers want the highest possible prices for the goods and services that they provide. When there are a limited number of suppliers, their bargaining power is enhanced. As a result the organizations may compete with each other for patients by lowering prices. They may compete with enhancements that are seen in the supplies and extra service offered. This means that they have to agree to pay more for the better supplies and extra service, which increase the cost to operate. These factors increase the intensity of competition in this service area. The impact of substitutes can be a significant force in the service areas’ competitive dynamics. Substitutes compete for customers and create a problem for the existing organizations. The existing organizations do not offer the same service and often find that the substitute has a lower price and/or better perceived quality. The existing providers must find a way to offset this advantage. They will lower price and/or offer other services to try to retain their customers. These additional services increase the cost to operate in this service area… These actions increase the competitive intensity or a service area. These factors are the fuel for the fifth force – the competitive intensity of the service area. The rivalry between competitors can be identified by the prices they charge, the additional service they provide and other enhancements. The greater the intensity of competition, the lower the price and/or extra service built into the existing price. This analysis helps manager understand if a particular service area is desirable. The Poughkeepsie service area is not very desirable for nursing homes. There are too many nursing homes in the marketing competing for too few potential patients. The substitutes also negatively impact the availability of potential patients. The bargaining power of supplier and buyers is very strong since they are limited. As a result the cost to operate in this market is high and the price is likely low. Given this structure, I would not want to enter this service area
Strategic Management of Health Care Organizations
Recorded Lecture – Strategy Part 1 – Chapter 1 Attached Files:  Defining Strategy Part 1.mp3 (13.3 MB) In addition to listening to this lecture and reading chapter 1, article identified in the syllabus as Porter 1 and Mintzberg.  You can find the articles in the library, via a Google search, or you can purchase them from the Harvard Business School.  The digital copy is only $3.   Please use the following links to Youtube: This is a two minute video of Professor Michael Porter presenting some essential elements on strategy. http://www.youtube.com/watch?v=4srFC0de4ww&playnext=1&list=PL288C3224441BDB6B&feature=results_main http://www.youtube.com/watch?v=_NRWtd_SiU8&feature=related The second is a video that features Professor Henry Mintzberg presenting elements of strategy that need to considered too. Defining Strategy Part 2 – Chapter 1 = More on Operational Effectiveness Attached Files:  Defining Strategy Part 2.mp3 (15.54 MB) Please use this link.  It will present an article that should help you understand Porter’s concept of operational effectiveness. http://khn.org/news/hospitals-seeking-an-edge-turn-to-unlikely-adviser-a-car-maker/?utm_campaign=KHN%3A+Daily+Health+Policy+Report&utm_source=hs_email&utm_medium=email&utm_content=21083476&_hsenc=p2ANqtz-87fbO-sVmCiTN_Ia6uBrsx5mpXEolQCElohMxwPcZWTSkcD41R9kqDY8cJjPely6D4h7EXQ0W5v3rJvn1myuVqaP-0Ng&_hsmi=21083476 The Situational Analysis Attached Files:  The Situational Analysis.doc (43 KB) Recorded Lecture – Chapters 2 & 3 Attached Files:  External and Competitor Analysis.mp3 (7.213 MB) In addition view the following You Tube Videos: https://www.youtube.com/watch?v=H8_W8tAEsfQ – for Chapter 2 https://www.youtube.com/watch?v=e8MymzF6CPU – for Chapter 3 External Analysis – Supplemental Lecture Attached Files:  External Analysis Supplemental.mp3 (6.221 MB) Five Forces – Sample Essay Attached Files:  Five forces Models.docx (17.984 KB) Students often feel frustrated when it come to writing.  What does my instructor want?  To address this issue, please see the attached sample essay related to the Five Forces Assignment.  Notice the organization:  clear topic sentences, support sentences that explain the topic sentence, very few commas and how both part of the assignment are addressed. Please use this as a model for your writing going forward Recorded Lecture – The Internal Analysis – Chapter 4 Attached Files:  Internal Environment.mp3 (12.123 MB) This lecture covers the one component of the Situational Analysis – the internal analysis.  This Youtube video presents a component of the internal analysis — the Value Chain http://www.youtube.com/watch?v=3P92Enc06wc Market Segmentation Attached Files:  More of Market Segmentation.doc (75.5 KB) This is an addendum to chapter 4 of the text More of Porter’s Five Forces – pages 89 – 104 Attached Files:  More on Porter’s Fives Forces.doc (178.5 KB) View the following videos on Youtube: http://www.youtube.com/watch?v=5JjNUxxsDP0 http://www.youtube.com/watch?v=mYF2_FBCvXw Recorded Lecture – Mission, Vision and Values Attached Files:  MVV and Strategies.mp3 (10.756 MB) Mission, vision and values are important strategically – they can help our organization differentiate itself from the competition. Chapters 6 & 7 Attached Files:  Strategy Development Part 1.mp3 (14.385 MB) This lecture presents Corporate Strategies.  Read the following articles from The New York Times, found at: http://www.nytimes.com/2013/08/13/business/bigger-hospitals-may-lead-to-bigger-bills-for-patients.html?hp  and http://www.nytimes.com/2014/02/05/business/economy/health-law-goals-face-antitrust-hurdles.html?ribbon-ad-idx=4&rref=business&module=Ribbon&version=origin&region=Header&action=click&contentCollection=Business%20Day&pgtype=article (for this article cut and paste into your browser) Strategy Selection Process Part II Chapters 6 & 7 Attached Files:  Strategy Development Part 2.mp3 (9.53 MB) Second Part that describes SBU and Operational Unit Strategies. For chapter 7, read pages 245-252, 264 to the thop 0f 269, 274-287

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