MHA6080 WEEK 2 DISCUSSION AND PROJECT
MHA6080 WEEK 2 DISCUSSION AND PROJECT
Week 2 continues the discussion of strategic planning by exploring the first two steps in the planning process. First, we will discuss how an effective market strategy requires the completion of an internal and external assessment. Market research tools are necessary during this step to better ascertain the market condition of an organization. Second, we will explore the mission, vision, and critical success factors and their implications for market strategies.
Your Learning Objectives for the Week:
Identify the elements of a successful healthcare marketing plan.
Examine and apply business strategies necessary to define and grow a healthcare organization.
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The strengths, weaknesses, opportunities, and threats (SWOT) analysis is a useful tool in strategic planning. Conducting a SWOT analysis includes investigation of the organization’s environment. The strengths and weaknesses of an organization are internal factors, while opportunities and threats are considered external factors. Each element will be discussed as it can provide helpful information about the current condition of the organization. The SWOT analysis also allows for areas of growth by looking externally at its contributing factors.
The strength of an organization refers to any type of characteristic that gives itself a competitive advantage over a similar-type organization. For instance, if a hospital partnered with a local restaurant and was able to provide non-intensive care to its patients such as an option of receiving meals delivered from the restaurant to their room, this would be a strength over an organization that only provided in-house meals. MHA6080 WEEK 2 DISCUSSION AND PROJECT
The weakness of an organization refers to any type of disadvantage it has compared to its competition. For instance, if a nursing home located in a metropolitan area has limited handicap parking, this would be a weakness over a similar organization nearby that has ample handicap parking spaces.
The opportunities of an organization refer to elements in the external environment that may benefit the organization in the future. For instance, if the nursing home with limited parking is offered to purchase the lot next door and expand parking, this is considered an opportunity.
The threats of an organization refer to elements in the external environment that may potentially cause trouble for the organization. For instance, if a new hospital is looking to enter an existing market, this would be a threat for the existing hospitals in the area.
Additional Materials
From your course textbook, Health Care Market Strategy, read the following chapter:
· Step 1: Conducting the Internal/External Assessment
From the South University Online Library, read the following article:
· SWOT Analysis: A Theoretical Review
From the Internet, review the following:
· Harrison, J. P. (2010). Strategic planning and SWOT analysis. In Essentials of Strategic Planning in Healthcare (pp. 91–97). Chicago, IL: Health Administration Press. Retrieved from https://www.ache.org/pdf/secure/gifts/Harrison_Chapter5.pdf
Porter’s Five Forces Model
Another assessment tool used for strategic planning is Porter’s Five Forces model. Unlike the SWOT analysis, the five forces model allows for organizational risks and opportunities to be further scrutinized. This model asserts that there are forces, or influencers, that ultimately determine the competitive advantage of an organization. This model specifically illustrates the security of the organization in its respective market.
The model seeks to answer the following five questions:
· How easy is it for suppliers to drive up prices?
· How easy is it for buyers to drive down prices?
· Is there a threat of substitution?
· Is there a threat of new entry by a similar provider?
· How much competitive rivalry exists?
In healthcare, suppliers refers to the providers of healthcare services. Buyers refers to the individuals receiving care or purchasing medical supplies (patients). The first two questions aim to assess the level of ease for which a supplier can increase prices for services, and the level of ease for which a buyer can ultimately reduce prices. Supply and demand are proponents of this concept. As the demand of services increases, the supply decreases. Likewise, as the demand of services decreases, the supply increases.
The model continues to seek if there is an opportunity for a different type of service available for existing buyers. For instance, patients discharging from a hospital requiring assistance with activities of daily living commonly find services in a skilled nursing facility. However, if the patient elects to receive healthcare services at home instead, they are substituting services.
Similarly, if your nursing home enters the market where the patient requires services, this is a threat of a new entry by a similar provider. The question that remains is, what competitive rivalry exists in any organization’s strategic path? Porter’s Five Forces model aims to identify these in an effort to determine the competitive advantage of the organization.
Porter’s Five Forces Model
Review each icon to know more about Porter’s five forces model.
Competitive Rivalry
Competitive rivalry refers to the competition that may deter revenue from your organization. This also refers to the strength of the competition and its potential implication on your organization.
Suppliers Power
Suppliers have a unique bargaining power of affecting the final cost of a product (or service). When the suppliers change the price of their product, it creates a ripple effect throughout the remaining individuals and organizations. MHA6080 WEEK 2 DISCUSSION AND PROJECT
The Threat of Substitution
When a product or a service is introduced, its success can be eliminated (or at a minimum, its popularity can be shortened) when a similar product or service potentially enters the same market.
Buyers Power
Similar to the bargaining power of suppliers, buyers also have a unique bargaining power over the demand for a product or a service. As more buyers become interested, the demand increases and the supply decreases. When buyers change their buying patterns, this impacts the suppliers’ demand for the product and the sellers’ opportunity to market the product.
The Threat of New Entry
The threat of a new entrant refers to the difficulty a new entrant may experience in the market. If the market is easy to enter with minimal competition, the new entrant will have a greater opportunity to enter the market compared to a market that is difficult to enter as a result of substantial competition present in the market.
Additional Materials
From your course textbook, Health Care Market Strategy, read the following chapter:
· Step 2: Creating the Mission, Vision, and Critical Success Factors
From the South University Online Library, read the following article:
· Administration of Emergency Medicine: The Economic Role of the Emergency Department in the Health Care Continuum: Applying Michael Porter’s Five Forces Model to Emergency Medicine
From the Internet, review the following:
· Rigby, D. K. (2010). Management tools 2011: An executive’s guide. Boston, MA: Bain.
Mission and Vision
“I have a dream.” Those are the famous words spoken by the renowned American civil rights activist, Dr. Martin Luther King, Jr. Without a dream and vision for the future, there can be no growth. The same principle applies to strategic planning with the development of the mission and vision statements of an organization.
An organization’s mission and vision statements are important in strategic planning. Without having an understanding of where an organization is now, and where the organization desires to go in the future, there is minimal opportunity for growth. This is why it is important to have a mission statement and a vision statement.
Oftentimes, the mission statement is mistaken for the vision statement. However, they are different. The mission statement is a reflection of the organization’s current market position, while a vision statement is a reflection of the organization’s future market position. The mission statement communicates what an organization is doing today, while the vision statement communicates what an organization will be doing in the future.
The mission statement helps identify the customers and markets, the primary services provided, the geographical area included in the provision of services, the philosophy of the organization and an understanding of its values, the organization’s self-perception of its market strength, and finally, the public’s perception of the organization.
The vision statement helps identify where the organization should be in the future. Most commonly, the vision of an organization encompasses five to ten years into the future. Considering a mission statement is a snapshot of where the organization currently is in the marketplace, this statement is seldom amended. However, considering a vision statement is an anticipation of where the organization will be in the future, this statement is amended oftentimes during the strategic planning process.
Elements of Mission and Vision Statement
Displays a media that presents the key elements of an effective mission and vision statement of an organization. MHA6080 WEEK 2 DISCUSSION AND PROJECT
An effective mission statement effectively communicates the commitment of an organization. The mission statement answers the following questions:
· Who is the organization?
· Where are they right now in the market?
· What does this organization provide?
· Who can receive their products or services?
For example, the following mission statement answers the four aforementioned questions successfully:
“The mission of Happy Healthcare is to provide the highest quality of family healthcare services to the surrounding community regardless of income.”
Similarly, a vision statement includes basic identifiers; however, the vision communicates where the organization would like to be.
For example, the following vision statement communicates the intended direction of the organization:
“The vision of Happy Healthcare is to become the community’s preferred choice for family healthcare services in the southeast region of North Carolina.”
Additional Materials
From your course textbook, Health Care Market Strategy, read the following chapter:
· Step 2: Creating the Mission, Vision, and Critical Success Factors
From the South University Online Library, read the following article:
· Mission, Vision and Values Statements: The Physician Leader’s Role
From the Internet, review the following:
· Robert, M. (2006). The new strategic thinking, pure and simple. New York, NY: McGraw-Hill.
MHA6080 WEEK 2 DISCUSSION AND PROJECT