PacifiCare's African American Health Solutions (AAHS) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of PacifiCare's African American Health Solutions (AAHS)
PacifiCare's African American Health Solutions (AAHS) focused on improving the health outcomes of African Americans by providing culturally sensitive health education, health improvement opportunities, and access to high-quality health care services. By early 2006, approximately two years after the program's inception, the initiative had made significant headway in its two primary markets of Dallas and Los Angeles. In the new year, however, AAHS would face new challenges. Limited information was captured and tracked regarding the program's potential effect on the level of risk in the company's portfolio, and little was known about the profitability of the target community. Also, was AAHS making a positive contribution to the company? Finally, competition for African Americans' business was intensifying among health insurance providers. In 2006, AAHS had to define its purpose more clearly in the face of growing competition. The initiative also needed to decide on a customer acquisition approach. Was it really a goodwill program designed primarily to educate and inform African Americans? Or, was AAHS a powerful acquisition tool that should be integrated more directly into PacifiCare's mainstream customer acquisition strategy?
Authors :: Brian Lowery, S. Christian Wheeler, Lyn Denend
Swot Analysis of "PacifiCare's African American Health Solutions (AAHS)" written by Brian Lowery, S. Christian Wheeler, Lyn Denend includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Aahs Pacificare's facing as an external strategic factors. Some of the topics covered in PacifiCare's African American Health Solutions (AAHS) case study are - Strategic Management Strategies, Diversity, Marketing, Race, Sales and Sales & Marketing.
Some of the macro environment factors that can be used to understand the PacifiCare's African American Health Solutions (AAHS) casestudy better are - – supply chains are disrupted by pandemic , increasing household debt because of falling income levels, increasing transportation and logistics costs, technology disruption, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions,
increasing commodity prices, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of PacifiCare's African American Health Solutions (AAHS)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in PacifiCare's African American Health Solutions (AAHS) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Aahs Pacificare's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Aahs Pacificare's 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 PacifiCare's African American Health Solutions (AAHS) can be done for the following purposes –
1. Strategic planning using facts provided in PacifiCare's African American Health Solutions (AAHS) case study
2. Improving business portfolio management of Aahs Pacificare's
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Aahs Pacificare's
Strengths PacifiCare's African American Health Solutions (AAHS) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Aahs Pacificare's in PacifiCare's African American Health Solutions (AAHS) Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Aahs Pacificare's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Aahs Pacificare's is present in almost all the verticals within the industry. This has provided firm in PacifiCare's African American Health Solutions (AAHS) 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
– Aahs Pacificare's is one of the most innovative firm in sector. Manager in PacifiCare's African American Health Solutions (AAHS) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Aahs Pacificare's 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.
Learning organization
- Aahs Pacificare's 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 Aahs Pacificare's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in PacifiCare's African American Health Solutions (AAHS) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Aahs Pacificare's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Aahs Pacificare's has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Sustainable margins compare to other players in Sales & Marketing industry
– PacifiCare's African American Health Solutions (AAHS) firm has clearly differentiated products in the market place. This has enabled Aahs Pacificare's to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Aahs Pacificare's to invest into research and development (R&D) and innovation.
Ability to lead change in Sales & Marketing field
– Aahs Pacificare's 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 Aahs Pacificare's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Aahs Pacificare's 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 PacifiCare's African American Health Solutions (AAHS) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Aahs Pacificare's is one of the leading recruiters in the industry. Managers in the PacifiCare's African American Health Solutions (AAHS) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Aahs Pacificare's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Aahs Pacificare's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Aahs Pacificare's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Aahs Pacificare's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses PacifiCare's African American Health Solutions (AAHS) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of PacifiCare's African American Health Solutions (AAHS) are -
Low market penetration in new markets
– Outside its home market of Aahs Pacificare's, firm in the HBR case study PacifiCare's African American Health Solutions (AAHS) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Brian Lowery, S. Christian Wheeler, Lyn Denend suggests that, Aahs Pacificare's 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 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 Aahs Pacificare's supply chain. Even after few cautionary changes mentioned in the HBR case study - PacifiCare's African American Health Solutions (AAHS), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Aahs Pacificare's vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Aahs Pacificare's products
– To increase the profitability and margins on the products, Aahs Pacificare's needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Aahs Pacificare's 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. Aahs Pacificare's 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.
Products dominated business model
– Even though Aahs Pacificare's 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 - PacifiCare's African American Health Solutions (AAHS) should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Aahs Pacificare's is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Aahs Pacificare's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Aahs Pacificare's to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study PacifiCare's African American Health Solutions (AAHS), in the dynamic environment Aahs Pacificare's has struggled to respond to the nimble upstart competition. Aahs Pacificare's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As PacifiCare's African American Health Solutions (AAHS) HBR case study mentions - Aahs Pacificare's 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 operating costs
– Compare to the competitors, firm in the HBR case study PacifiCare's African American Health Solutions (AAHS) 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 Aahs Pacificare's 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Aahs Pacificare's 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.
Opportunities PacifiCare's African American Health Solutions (AAHS) | 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 PacifiCare's African American Health Solutions (AAHS) are -
Developing new processes and practices
– Aahs Pacificare's can develop new processes and procedures in Sales & Marketing 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Aahs Pacificare's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Aahs Pacificare's 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.
Better consumer reach
– The expansion of the 5G network will help Aahs Pacificare's to increase its market reach. Aahs Pacificare's 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Aahs Pacificare's 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. Aahs Pacificare's 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, Aahs Pacificare's 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, PacifiCare's African American Health Solutions (AAHS), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Aahs Pacificare's 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 Aahs Pacificare's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Aahs Pacificare's 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Aahs Pacificare's is facing challenges because of the dominance of functional experts in the organization. PacifiCare's African American Health Solutions (AAHS) case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Aahs Pacificare's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Aahs Pacificare's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. PacifiCare's African American Health Solutions (AAHS) 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Aahs Pacificare's can use these opportunities to build new business models that can help the communities that Aahs Pacificare's operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Threats PacifiCare's African American Health Solutions (AAHS) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study PacifiCare's African American Health Solutions (AAHS) are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Aahs Pacificare's in the Sales & Marketing industry. The Sales & Marketing 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.
High dependence on third party suppliers
– Aahs Pacificare's 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.
Environmental challenges
– Aahs Pacificare's 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. Aahs Pacificare's can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Regulatory challenges
– Aahs Pacificare's 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 Sales & Marketing industry regulations.
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.
Shortening product life cycle
– it is one of the major threat that Aahs Pacificare's is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Aahs Pacificare's.
Technology acceleration in Forth Industrial Revolution
– Aahs Pacificare's has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Aahs Pacificare's needs to keep up with the evolution of technology in the Sales & Marketing 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.
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 Aahs Pacificare's in the Sales & Marketing sector and impact the bottomline of the organization.
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.
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. Aahs Pacificare's 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
– Aahs Pacificare's 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.
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. Aahs Pacificare's needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Weighted SWOT Analysis of PacifiCare's African American Health Solutions (AAHS) 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 PacifiCare's African American Health Solutions (AAHS) 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 PacifiCare's African American Health Solutions (AAHS) 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 PacifiCare's African American Health Solutions (AAHS) 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 PacifiCare's African American Health Solutions (AAHS) 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 Aahs Pacificare's needs to make to build a sustainable competitive advantage.
