Kent Thiry: "Mayor" of DaVita SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Kent Thiry: "Mayor" of DaVita
Kent Thiry, CEO of dialysis provider DaVita, is considering how to integrate employees from recently acquired Gambro Healthcare without damaging DaVita's robust, unconventional internal culture. When Thiry joined DaVita in 1999, breaking an important promise to his family in order to do so, he was determined to create a differentiated company with a community-like culture. Over six years, he had engineered an impressive financial turnaround and successfully developed the strong culture he had envisioned. In late 2004, DaVita acquired arch-rival Gambro Healthcare, whose 12,000 employees would nearly double DaVita in size once the integration is completed in fall 2005. Confident that the deal makes business sense but worried about potential adverse impacts of the integration-especially in light of rumors that Gambro employees are suspicious of Thiry's authenticity and critical of DaVita's arguably eccentric culture-Thiry is considering whether to impose DaVita's culture on the new arrivals, or just allow Gambro to operate independently for a period of time.
Swot Analysis of "Kent Thiry: "Mayor" of DaVita" written by William W. George, Natalie Kindred includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Davita Gambro facing as an external strategic factors. Some of the topics covered in Kent Thiry: "Mayor" of DaVita case study are - Strategic Management Strategies, Communication, Informal leadership, Leadership, Motivating people, Strategy, Workspaces and Organizational Development.
Some of the macro environment factors that can be used to understand the Kent Thiry: "Mayor" of DaVita casestudy better are - – digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs,
challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Kent Thiry: "Mayor" of DaVita
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Kent Thiry: "Mayor" of DaVita case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Davita Gambro, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Davita Gambro 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 Kent Thiry: "Mayor" of DaVita can be done for the following purposes –
1. Strategic planning using facts provided in Kent Thiry: "Mayor" of DaVita case study
2. Improving business portfolio management of Davita Gambro
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Davita Gambro
Strengths Kent Thiry: "Mayor" of DaVita | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Davita Gambro in Kent Thiry: "Mayor" of DaVita Harvard Business Review case study are -
Learning organization
- Davita Gambro 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 Davita Gambro is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Kent Thiry: "Mayor" of DaVita Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Davita Gambro is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Davita Gambro 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.
Innovation driven organization
– Davita Gambro is one of the most innovative firm in sector. Manager in Kent Thiry: "Mayor" of DaVita Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the Kent Thiry: "Mayor" of DaVita Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Low bargaining power of suppliers
– Suppliers of Davita Gambro in the sector have low bargaining power. Kent Thiry: "Mayor" of DaVita has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Davita Gambro to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Davita Gambro digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Davita Gambro has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Successful track record of launching new products
– Davita Gambro has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Davita Gambro 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.
Sustainable margins compare to other players in Organizational Development industry
– Kent Thiry: "Mayor" of DaVita firm has clearly differentiated products in the market place. This has enabled Davita Gambro to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Davita Gambro to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Davita Gambro has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Kent Thiry: "Mayor" of DaVita - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Davita Gambro has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Kent Thiry: "Mayor" of DaVita Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Highly skilled collaborators
– Davita Gambro 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 Kent Thiry: "Mayor" of DaVita HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Kent Thiry: "Mayor" of DaVita | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kent Thiry: "Mayor" of DaVita are -
Capital Spending Reduction
– Even during the low interest decade, Davita Gambro 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.
Need for greater diversity
– Davita Gambro has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High cash cycle compare to competitors
Davita Gambro 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Kent Thiry: "Mayor" of DaVita HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Davita Gambro has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study Kent Thiry: "Mayor" of DaVita has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Davita Gambro 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Davita Gambro 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. Davita Gambro 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.
No frontier risks strategy
– After analyzing the HBR case study Kent Thiry: "Mayor" of DaVita, it seems that company is thinking about the frontier risks that can impact Organizational Development 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 Kent Thiry: "Mayor" of DaVita, in the dynamic environment Davita Gambro has struggled to respond to the nimble upstart competition. Davita Gambro has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring
– The stress on hiring functional specialists at Davita Gambro has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Davita Gambro is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Kent Thiry: "Mayor" of DaVita can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As Kent Thiry: "Mayor" of DaVita HBR case study mentions - Davita Gambro takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Opportunities Kent Thiry: "Mayor" of DaVita | 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 Kent Thiry: "Mayor" of DaVita are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Davita Gambro 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. Davita Gambro 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Davita Gambro 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 Davita Gambro to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Davita Gambro can use the latest technology developments to improve its manufacturing and designing process in Organizational Development segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Leveraging digital technologies
– Davita Gambro can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Davita Gambro can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Davita Gambro 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.
Creating value in data economy
– The success of analytics program of Davita Gambro has opened avenues for new revenue streams for the organization in the industry. This can help Davita Gambro to build a more holistic ecosystem as suggested in the Kent Thiry: "Mayor" of DaVita case study. Davita Gambro can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Davita Gambro can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Kent Thiry: "Mayor" of DaVita suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Developing new processes and practices
– Davita Gambro can develop new processes and procedures in Organizational Development industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Davita Gambro can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Kent Thiry: "Mayor" of DaVita, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Davita Gambro has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Kent Thiry: "Mayor" of DaVita - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Davita Gambro to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Davita Gambro 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Davita Gambro can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Threats Kent Thiry: "Mayor" of DaVita External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Kent Thiry: "Mayor" of DaVita are -
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
– Davita Gambro 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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Davita Gambro in the Organizational Development industry. The Organizational Development 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.
Environmental challenges
– Davita Gambro 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. Davita Gambro can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Kent Thiry: "Mayor" of DaVita, Davita Gambro may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Davita Gambro needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Davita Gambro high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Technology acceleration in Forth Industrial Revolution
– Davita Gambro has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Davita Gambro needs to keep up with the evolution of technology in the Organizational Development 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.
Consumer confidence and its impact on Davita Gambro 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Davita Gambro can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Kent Thiry: "Mayor" of DaVita .
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Davita Gambro will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Davita Gambro with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Kent Thiry: "Mayor" of DaVita 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 Kent Thiry: "Mayor" of DaVita 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 Kent Thiry: "Mayor" of DaVita 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 Kent Thiry: "Mayor" of DaVita 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 Kent Thiry: "Mayor" of DaVita 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 Davita Gambro needs to make to build a sustainable competitive advantage.
