Case Study Description of Ekohealth: Developing Price Structures
Founded in 2011 in Mumbai, India, Ekohealth Management Consultants Private Limited helped its subscribing members by negotiating bulk discounts with hospitals for all planned surgeries and reducing their monthly bills by suggesting low-cost generic drugs rather than expensive brand names. It ensured ethical health care practices by removing the referral fees doctors routinely demanded from hospitals, pathology clinics, pharmaceutical companies and other medical professionals in exchange for directing patients to them. The company had entered fiscal year 2013/14 with a high momentum and envisioned recording revenue of INR28.3 million by the end of the year. The existing price metric involved a single price point: the annual membership fee of INR1,500 for up to five members of a family. The company has plans to move into other Indian cities by mid-2014. Is the single price metric appropriate for these new markets? Neeraj Pandey and Gaganpreet Singh are affiliated with National Institute of Industrial Engineering (NITIE).
Swot Analysis of "Ekohealth: Developing Price Structures" written by Neeraj Pandey, Gaganpreet Singh includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ekohealth Metric facing as an external strategic factors. Some of the topics covered in Ekohealth: Developing Price Structures case study are - Strategic Management Strategies, Pricing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Ekohealth: Developing Price Structures casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation,
increasing commodity prices, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Ekohealth: Developing Price Structures
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Ekohealth: Developing Price Structures case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ekohealth Metric, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ekohealth Metric 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 Ekohealth: Developing Price Structures can be done for the following purposes –
1. Strategic planning using facts provided in Ekohealth: Developing Price Structures case study
2. Improving business portfolio management of Ekohealth Metric
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 Ekohealth Metric
Strengths Ekohealth: Developing Price Structures | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ekohealth Metric in Ekohealth: Developing Price Structures Harvard Business Review case study are -
Sustainable margins compare to other players in Sales & Marketing industry
– Ekohealth: Developing Price Structures firm has clearly differentiated products in the market place. This has enabled Ekohealth Metric to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Ekohealth Metric to invest into research and development (R&D) and innovation.
High brand equity
– Ekohealth Metric has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ekohealth Metric to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Ekohealth Metric 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.
Diverse revenue streams
– Ekohealth Metric is present in almost all the verticals within the industry. This has provided firm in Ekohealth: Developing Price Structures 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.
Training and development
– Ekohealth Metric has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Ekohealth: Developing Price Structures 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.
Analytics focus
– Ekohealth Metric 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 Neeraj Pandey, Gaganpreet Singh 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.
Innovation driven organization
– Ekohealth Metric is one of the most innovative firm in sector. Manager in Ekohealth: Developing Price Structures Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Ekohealth Metric is one of the leading recruiters in the industry. Managers in the Ekohealth: Developing Price Structures 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)
– Ekohealth Metric 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 Ekohealth: Developing Price Structures - 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
- Ekohealth Metric 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 Ekohealth Metric is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Ekohealth: Developing Price Structures Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Ekohealth Metric in the sector have low bargaining power. Ekohealth: Developing Price Structures has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ekohealth Metric to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Ekohealth Metric 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.
Weaknesses Ekohealth: Developing Price Structures | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ekohealth: Developing Price Structures are -
Capital Spending Reduction
– Even during the low interest decade, Ekohealth Metric 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.
Interest costs
– Compare to the competition, Ekohealth Metric has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High cash cycle compare to competitors
Ekohealth Metric 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.
Products dominated business model
– Even though Ekohealth Metric 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 - Ekohealth: Developing Price Structures should strive to include more intangible value offerings along with its core products and services.
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 Ekohealth Metric supply chain. Even after few cautionary changes mentioned in the HBR case study - Ekohealth: Developing Price Structures, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ekohealth Metric vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Neeraj Pandey, Gaganpreet Singh suggests that, Ekohealth Metric 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.
No frontier risks strategy
– After analyzing the HBR case study Ekohealth: Developing Price Structures, it seems that company is thinking about the frontier risks that can impact Sales & Marketing 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.
Low market penetration in new markets
– Outside its home market of Ekohealth Metric, firm in the HBR case study Ekohealth: Developing Price Structures needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Ekohealth Metric products
– To increase the profitability and margins on the products, Ekohealth Metric needs to provide more differentiated products than what it is currently offering in the marketplace.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Ekohealth: Developing Price Structures, in the dynamic environment Ekohealth Metric has struggled to respond to the nimble upstart competition. Ekohealth Metric has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring
– The stress on hiring functional specialists at Ekohealth Metric 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.
Opportunities Ekohealth: Developing Price Structures | 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 Ekohealth: Developing Price Structures are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Ekohealth Metric 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ekohealth Metric can use these opportunities to build new business models that can help the communities that Ekohealth Metric operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Loyalty marketing
– Ekohealth Metric 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.
Learning at scale
– Online learning technologies has now opened space for Ekohealth Metric 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.
Manufacturing automation
– Ekohealth Metric can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing 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
– Ekohealth Metric can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Ekohealth: Developing Price Structures 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.
Leveraging digital technologies
– Ekohealth Metric can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Better consumer reach
– The expansion of the 5G network will help Ekohealth Metric to increase its market reach. Ekohealth Metric 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ekohealth Metric can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Ekohealth Metric has opened avenues for new revenue streams for the organization in the industry. This can help Ekohealth Metric to build a more holistic ecosystem as suggested in the Ekohealth: Developing Price Structures case study. Ekohealth Metric can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Ekohealth Metric 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 Sales & Marketing segment.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ekohealth Metric 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 Ekohealth Metric to hire the very best people irrespective of their geographical location.
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 Ekohealth Metric in the consumer business. Now Ekohealth Metric can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Ekohealth: Developing Price Structures External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Ekohealth: Developing Price Structures are -
High dependence on third party suppliers
– Ekohealth Metric 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.
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. Ekohealth Metric needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
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 Ekohealth Metric in the Sales & Marketing sector and impact the bottomline of the organization.
Increasing wage structure of Ekohealth Metric
– 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 Ekohealth Metric.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ekohealth Metric with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Ekohealth: Developing Price Structures, Ekohealth Metric may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ekohealth Metric 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 Ekohealth: Developing Price Structures .
Shortening product life cycle
– it is one of the major threat that Ekohealth Metric is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Ekohealth Metric 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 Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Ekohealth Metric can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ekohealth Metric 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.
Stagnating economy with rate increase
– Ekohealth Metric 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.
Weighted SWOT Analysis of Ekohealth: Developing Price Structures 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 Ekohealth: Developing Price Structures 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 Ekohealth: Developing Price Structures 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 Ekohealth: Developing Price Structures 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 Ekohealth: Developing Price Structures 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 Ekohealth Metric needs to make to build a sustainable competitive advantage.
