Kent Thiry and DaVita: Leadership Challenges in Building and Growing a Great Company SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Kent Thiry and DaVita: Leadership Challenges in Building and Growing a Great Company
DaVita, one of the largest operators of kidney dialysis centers in the United States, underwent a remarkable turnaround between 2000 and 2005, a transformation based on building a strong values-driven culture, with an emphasis on fact-based decision making and the theme of "one for all, all for one" and an emphasis on company as community. Now the company's top management faces a number of challenges, including the integration of one of its largest competitors just acquired in a merger, ensuring management succession and not being too CEO-centric, and dealing with the operational issues confronting a company heavily dependent on Medicare and Medicaid reimbursements that do not fully cover the cost of treatment while competing for employees in the health care industry.
Swot Analysis of "Kent Thiry and DaVita: Leadership Challenges in Building and Growing a Great Company" written by Jeffrey Pfeffer includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Davita Reimbursements facing as an external strategic factors. Some of the topics covered in Kent Thiry and DaVita: Leadership Challenges in Building and Growing a Great Company case study are - Strategic Management Strategies, Growth strategy, Human resource management, Leadership, Mergers & acquisitions, Organizational culture and Organizational Development.
Some of the macro environment factors that can be used to understand the Kent Thiry and DaVita: Leadership Challenges in Building and Growing a Great Company casestudy better are - – increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models, increasing commodity prices,
technology disruption, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Kent Thiry and DaVita: Leadership Challenges in Building and Growing a Great Company
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Kent Thiry and DaVita: Leadership Challenges in Building and Growing a Great Company case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Davita Reimbursements, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Davita Reimbursements 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 and DaVita: Leadership Challenges in Building and Growing a Great Company can be done for the following purposes –
1. Strategic planning using facts provided in Kent Thiry and DaVita: Leadership Challenges in Building and Growing a Great Company case study
2. Improving business portfolio management of Davita Reimbursements
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 Reimbursements
Strengths Kent Thiry and DaVita: Leadership Challenges in Building and Growing a Great Company | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Davita Reimbursements in Kent Thiry and DaVita: Leadership Challenges in Building and Growing a Great Company Harvard Business Review case study are -
Ability to lead change in Organizational Development field
– Davita Reimbursements 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 Davita Reimbursements in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Davita Reimbursements has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Davita Reimbursements 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.
Learning organization
- Davita Reimbursements 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 Reimbursements is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Kent Thiry and DaVita: Leadership Challenges in Building and Growing a Great Company Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Organizational Development industry
– Kent Thiry and DaVita: Leadership Challenges in Building and Growing a Great Company firm has clearly differentiated products in the market place. This has enabled Davita Reimbursements to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Davita Reimbursements to invest into research and development (R&D) and innovation.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Davita Reimbursements digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Davita Reimbursements 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.
Innovation driven organization
– Davita Reimbursements is one of the most innovative firm in sector. Manager in Kent Thiry and DaVita: Leadership Challenges in Building and Growing a Great Company Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Davita Reimbursements is one of the leading recruiters in the industry. Managers in the Kent Thiry and DaVita: Leadership Challenges in Building and Growing a Great Company are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Davita Reimbursements 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.
Diverse revenue streams
– Davita Reimbursements is present in almost all the verticals within the industry. This has provided firm in Kent Thiry and DaVita: Leadership Challenges in Building and Growing a Great Company 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.
High brand equity
– Davita Reimbursements has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Davita Reimbursements to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Davita Reimbursements in the sector have low bargaining power. Kent Thiry and DaVita: Leadership Challenges in Building and Growing a Great Company has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Davita Reimbursements to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Davita Reimbursements 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 Jeffrey Pfeffer 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.
Weaknesses Kent Thiry and DaVita: Leadership Challenges in Building and Growing a Great Company | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kent Thiry and DaVita: Leadership Challenges in Building and Growing a Great Company are -
Interest costs
– Compare to the competition, Davita Reimbursements has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High cash cycle compare to competitors
Davita Reimbursements 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 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 Davita Reimbursements supply chain. Even after few cautionary changes mentioned in the HBR case study - Kent Thiry and DaVita: Leadership Challenges in Building and Growing a Great Company, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Davita Reimbursements vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Davita Reimbursements, firm in the HBR case study Kent Thiry and DaVita: Leadership Challenges in Building and Growing a Great Company needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Davita Reimbursements 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Kent Thiry and DaVita: Leadership Challenges in Building and Growing a Great Company, is just above the industry average. Davita Reimbursements 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.
No frontier risks strategy
– After analyzing the HBR case study Kent Thiry and DaVita: Leadership Challenges in Building and Growing a Great Company, 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Kent Thiry and DaVita: Leadership Challenges in Building and Growing a Great Company 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 Reimbursements 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Kent Thiry and DaVita: Leadership Challenges in Building and Growing a Great Company, in the dynamic environment Davita Reimbursements has struggled to respond to the nimble upstart competition. Davita Reimbursements 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, Jeffrey Pfeffer suggests that, Davita Reimbursements 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.
Aligning sales with marketing
– It come across in the case study Kent Thiry and DaVita: Leadership Challenges in Building and Growing a Great Company that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Kent Thiry and DaVita: Leadership Challenges in Building and Growing a Great Company can leverage the sales team experience to cultivate customer relationships as Davita Reimbursements is planning to shift buying processes online.
Opportunities Kent Thiry and DaVita: Leadership Challenges in Building and Growing a Great Company | 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 and DaVita: Leadership Challenges in Building and Growing a Great Company are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Davita Reimbursements 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 and DaVita: Leadership Challenges in Building and Growing a Great Company, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Davita Reimbursements can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Davita Reimbursements 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.
Better consumer reach
– The expansion of the 5G network will help Davita Reimbursements to increase its market reach. Davita Reimbursements 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.
Learning at scale
– Online learning technologies has now opened space for Davita Reimbursements 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Davita Reimbursements 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 Reimbursements to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Davita Reimbursements in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
Manufacturing automation
– Davita Reimbursements 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.
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 Reimbursements 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 Reimbursements 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 Davita Reimbursements 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 Organizational Development segment.
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 Davita Reimbursements in the consumer business. Now Davita Reimbursements can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Davita Reimbursements can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Kent Thiry and DaVita: Leadership Challenges in Building and Growing a Great Company 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.
Loyalty marketing
– Davita Reimbursements has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Threats Kent Thiry and DaVita: Leadership Challenges in Building and Growing a Great Company 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 and DaVita: Leadership Challenges in Building and Growing a Great Company are -
Environmental challenges
– Davita Reimbursements 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 Reimbursements can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
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 Reimbursements needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Davita Reimbursements 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 and DaVita: Leadership Challenges in Building and Growing a Great Company .
Regulatory challenges
– Davita Reimbursements 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 Organizational Development industry regulations.
Increasing wage structure of Davita Reimbursements
– 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 Davita Reimbursements.
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 and DaVita: Leadership Challenges in Building and Growing a Great Company, Davita Reimbursements 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 .
Technology acceleration in Forth Industrial Revolution
– Davita Reimbursements has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Davita Reimbursements 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.
Stagnating economy with rate increase
– Davita Reimbursements 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.
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 Davita Reimbursements.
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Davita Reimbursements can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Davita Reimbursements with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Reimbursements 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.
Shortening product life cycle
– it is one of the major threat that Davita Reimbursements is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Kent Thiry and DaVita: Leadership Challenges in Building and Growing a Great Company 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 and DaVita: Leadership Challenges in Building and Growing a Great Company 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 and DaVita: Leadership Challenges in Building and Growing a Great Company 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 and DaVita: Leadership Challenges in Building and Growing a Great Company 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 and DaVita: Leadership Challenges in Building and Growing a Great Company 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 Reimbursements needs to make to build a sustainable competitive advantage.
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