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 - – challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, increasing commodity prices, increasing energy prices, geopolitical disruptions,
central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, 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 -
Effective Research and Development (R&D)
– Davita Reimbursements 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 and DaVita: Leadership Challenges in Building and Growing a Great Company - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy in the Kent Thiry and DaVita: Leadership Challenges in Building and Growing a Great Company 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.
High switching costs
– The high switching costs that Davita Reimbursements 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.
Organizational Resilience of Davita Reimbursements
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Davita Reimbursements does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
Training and development
– Davita Reimbursements has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Kent Thiry and DaVita: Leadership Challenges in Building and Growing a Great Company 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.
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.
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.
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.
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.
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.
Strong track record of project management
– Davita Reimbursements is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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 -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Kent Thiry and DaVita: Leadership Challenges in Building and Growing a Great Company, it seems that the employees of Davita Reimbursements don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
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.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Davita Reimbursements is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Kent Thiry and DaVita: Leadership Challenges in Building and Growing a Great Company 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 and DaVita: Leadership Challenges in Building and Growing a Great Company HBR case study mentions - Davita Reimbursements 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.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Davita Reimbursements needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
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.
Products dominated business model
– Even though Davita Reimbursements has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Kent Thiry and DaVita: Leadership Challenges in Building and Growing a Great Company should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Davita Reimbursements 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.
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 -
Using analytics as competitive advantage
– Davita Reimbursements 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 and DaVita: Leadership Challenges in Building and Growing a Great Company - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Davita Reimbursements to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Reimbursements 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.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Davita Reimbursements 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.
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.
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.
Creating value in data economy
– The success of analytics program of Davita Reimbursements has opened avenues for new revenue streams for the organization in the industry. This can help Davita Reimbursements to build a more holistic ecosystem as suggested in the Kent Thiry and DaVita: Leadership Challenges in Building and Growing a Great Company case study. Davita Reimbursements can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Davita Reimbursements 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.
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Davita Reimbursements can use these opportunities to build new business models that can help the communities that Davita Reimbursements operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
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.
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 -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Davita Reimbursements 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.
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.
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.
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 .
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Davita Reimbursements in the Organizational Development sector and impact the bottomline of the organization.
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.
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 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.
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.
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.
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.
Consumer confidence and its impact on Davita Reimbursements 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.
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.
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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