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 commodity prices, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, technology disruption, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic ,
increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, 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 -
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Lack of clear differentiation of Davita Reimbursements products
– To increase the profitability and margins on the products, Davita Reimbursements needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
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.
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 -
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.
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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Davita Reimbursements can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 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.
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.
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.
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.
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.
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 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.
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.
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 .
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 .
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.
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.
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.
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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