Difficult Choices - An Introduction to Cost Effectiveness Analysis SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of Difficult Choices - An Introduction to Cost Effectiveness Analysis
The media frequently report on the high cost of various health-related treatments. As there is a limit to the resources available to public and private health plans, they are not able to make all new treatments available. This raises questions about how to determine which treatments should be offered under a health plan. Cost effectiveness analysis has emerged as a powerful tool to help determine priorities and guide these policy decisions. This note is intended as a background reading for a first class on pharmacoeconomics or cost effectiveness analysis.
Swot Analysis of "Difficult Choices - An Introduction to Cost Effectiveness Analysis" written by Gregory S. Zaric includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Treatments Cost facing as an external strategic factors. Some of the topics covered in Difficult Choices - An Introduction to Cost Effectiveness Analysis case study are - Strategic Management Strategies, Health and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Difficult Choices - An Introduction to Cost Effectiveness Analysis casestudy better are - – digital marketing is dominated by two big players Facebook and Google, technology disruption, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%,
central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Difficult Choices - An Introduction to Cost Effectiveness Analysis
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Difficult Choices - An Introduction to Cost Effectiveness Analysis case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Treatments Cost, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Treatments Cost operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Difficult Choices - An Introduction to Cost Effectiveness Analysis can be done for the following purposes –
1. Strategic planning using facts provided in Difficult Choices - An Introduction to Cost Effectiveness Analysis case study
2. Improving business portfolio management of Treatments Cost
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Treatments Cost
Strengths Difficult Choices - An Introduction to Cost Effectiveness Analysis | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Treatments Cost in Difficult Choices - An Introduction to Cost Effectiveness Analysis Harvard Business Review case study are -
Highly skilled collaborators
– Treatments Cost has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Difficult Choices - An Introduction to Cost Effectiveness Analysis HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Treatments Cost has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Successful track record of launching new products
– Treatments Cost has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Treatments Cost has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Diverse revenue streams
– Treatments Cost is present in almost all the verticals within the industry. This has provided firm in Difficult Choices - An Introduction to Cost Effectiveness Analysis case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Ability to lead change in Finance & Accounting field
– Treatments Cost is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Treatments Cost in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Treatments Cost are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Analytics focus
– Treatments Cost is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Gregory S. Zaric can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
High brand equity
– Treatments Cost has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Treatments Cost to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Treatments Cost in the sector have low bargaining power. Difficult Choices - An Introduction to Cost Effectiveness Analysis has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Treatments Cost to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Treatments Cost in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Treatments Cost is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Treatments Cost is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Difficult Choices - An Introduction to Cost Effectiveness Analysis Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Finance & Accounting industry
– Difficult Choices - An Introduction to Cost Effectiveness Analysis firm has clearly differentiated products in the market place. This has enabled Treatments Cost to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Treatments Cost to invest into research and development (R&D) and innovation.
Weaknesses Difficult Choices - An Introduction to Cost Effectiveness Analysis | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Difficult Choices - An Introduction to Cost Effectiveness Analysis are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Difficult Choices - An Introduction to Cost Effectiveness Analysis, is just above the industry average. Treatments Cost needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High cash cycle compare to competitors
Treatments Cost has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Increasing silos among functional specialists
– The organizational structure of Treatments Cost is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Treatments Cost needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Treatments Cost to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Difficult Choices - An Introduction to Cost Effectiveness Analysis, it seems that company is thinking about the frontier risks that can impact Finance & Accounting strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Difficult Choices - An Introduction to Cost Effectiveness Analysis, in the dynamic environment Treatments Cost has struggled to respond to the nimble upstart competition. Treatments Cost has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners
– Because of the regulatory requirements, Gregory S. Zaric suggests that, Treatments Cost is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Treatments Cost is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Difficult Choices - An Introduction to Cost Effectiveness Analysis can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Treatments Cost supply chain. Even after few cautionary changes mentioned in the HBR case study - Difficult Choices - An Introduction to Cost Effectiveness Analysis, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Treatments Cost vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Treatments Cost has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Treatments Cost even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Capital Spending Reduction
– Even during the low interest decade, Treatments Cost has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Lack of clear differentiation of Treatments Cost products
– To increase the profitability and margins on the products, Treatments Cost needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Difficult Choices - An Introduction to Cost Effectiveness Analysis | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Difficult Choices - An Introduction to Cost Effectiveness Analysis are -
Learning at scale
– Online learning technologies has now opened space for Treatments Cost to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Treatments Cost to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Treatments Cost can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Treatments Cost to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Treatments Cost to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Treatments Cost can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Treatments Cost can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Building a culture of innovation
– managers at Treatments Cost can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Finance & Accounting segment.
Creating value in data economy
– The success of analytics program of Treatments Cost has opened avenues for new revenue streams for the organization in the industry. This can help Treatments Cost to build a more holistic ecosystem as suggested in the Difficult Choices - An Introduction to Cost Effectiveness Analysis case study. Treatments Cost can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Treatments Cost in the consumer business. Now Treatments Cost can target international markets with far fewer capital restrictions requirements than the existing system.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Treatments Cost can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Treatments Cost can use these opportunities to build new business models that can help the communities that Treatments Cost operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Treatments Cost in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Treatments Cost is facing challenges because of the dominance of functional experts in the organization. Difficult Choices - An Introduction to Cost Effectiveness Analysis case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Better consumer reach
– The expansion of the 5G network will help Treatments Cost to increase its market reach. Treatments Cost will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Threats Difficult Choices - An Introduction to Cost Effectiveness Analysis External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Difficult Choices - An Introduction to Cost Effectiveness Analysis are -
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Treatments Cost can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Treatments Cost demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Treatments Cost business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Treatments Cost with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Treatments Cost has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Treatments Cost needs to keep up with the evolution of technology in the Finance & Accounting sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Environmental challenges
– Treatments Cost needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Treatments Cost can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Treatments Cost.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Difficult Choices - An Introduction to Cost Effectiveness Analysis, Treatments Cost may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Increasing wage structure of Treatments Cost
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Treatments Cost.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Stagnating economy with rate increase
– Treatments Cost can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Treatments Cost in the Finance & Accounting industry. The Finance & Accounting industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Regulatory challenges
– Treatments Cost needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Finance & Accounting industry regulations.
Weighted SWOT Analysis of Difficult Choices - An Introduction to Cost Effectiveness Analysis Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Difficult Choices - An Introduction to Cost Effectiveness Analysis needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Difficult Choices - An Introduction to Cost Effectiveness Analysis is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Difficult Choices - An Introduction to Cost Effectiveness Analysis is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Difficult Choices - An Introduction to Cost Effectiveness Analysis is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Treatments Cost needs to make to build a sustainable competitive advantage.