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 - – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, increasing commodity prices,
competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, 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 -
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.
Highly skilled collaborators
– Davita Reimbursements 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 and DaVita: Leadership Challenges in Building and Growing a Great Company HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
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.
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.
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.
Superior customer experience
– The customer experience strategy of Davita Reimbursements in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
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.
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 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.
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 -
Capital Spending Reduction
– Even during the low interest decade, Davita Reimbursements 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.
Increasing silos among functional specialists
– The organizational structure of Davita Reimbursements is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Davita Reimbursements needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Davita Reimbursements to focus more on services rather than just following the product 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.
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.
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.
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.
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.
Slow decision making process
– As mentioned earlier in the report, Davita Reimbursements 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 Reimbursements 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.
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.
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.
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.
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 -
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.
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.
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.
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. Davita Reimbursements can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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.
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.
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.
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.
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.
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 -
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 .
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.
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.
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 dependence on third party suppliers
– Davita Reimbursements 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 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.
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.
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.
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.
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 .
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.
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.
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.
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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