Cruzsalud: Health Care for Low-Sectors SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Cruzsalud: Health Care for Low-Sectors
Cruzsalud was a medium-sized company, founded in November 2004. The company's business model was based on the concept pre-paid health care, by means of which low-income subscribers obtain a set of health services in exchange for a fixed monthly payment, with prices ranging from 9 to 40 thousand bolivars (US$ 4.00 to 18.60) per month. Once operations were under way, Cruzsalud had to face several management problems linked to expected sales and subscriber fee collection mechanisms. Moreover, Cruzsalud faced a dilemma related to its business model. The Law for Workplace Prevention, Conditions, and Environment, which was passed in July 2005, forced companies, regardless of size, to provide workplace health and safety services. In response to that mandate, and the determination shown by authorities to comply with it, business demand for health services spiraled. This opportunity, together with the difficulties faced in reaching the required volume of customers, led the shareholders to wonder whether Cruzsalud should continue to focus on the low-income sector, as managers proposed, or move towards the market for employee health plans.
Swot Analysis of "Cruzsalud: Health Care for Low-Sectors" written by Rosa Amelia Gonzalez, Horacio Viana includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cruzsalud Health facing as an external strategic factors. Some of the topics covered in Cruzsalud: Health Care for Low-Sectors case study are - Strategic Management Strategies, Strategic planning and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Cruzsalud: Health Care for Low-Sectors casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, increasing household debt because of falling income levels, wage bills are increasing, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google,
supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Cruzsalud: Health Care for Low-Sectors
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Cruzsalud: Health Care for Low-Sectors case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cruzsalud Health, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cruzsalud Health 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 Cruzsalud: Health Care for Low-Sectors can be done for the following purposes –
1. Strategic planning using facts provided in Cruzsalud: Health Care for Low-Sectors case study
2. Improving business portfolio management of Cruzsalud Health
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Cruzsalud Health
Strengths Cruzsalud: Health Care for Low-Sectors | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cruzsalud Health in Cruzsalud: Health Care for Low-Sectors Harvard Business Review case study are -
Training and development
– Cruzsalud Health has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Cruzsalud: Health Care for Low-Sectors 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.
Operational resilience
– The operational resilience strategy in the Cruzsalud: Health Care for Low-Sectors Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
High brand equity
– Cruzsalud Health has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cruzsalud Health to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Strategy & Execution field
– Cruzsalud Health 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 Cruzsalud Health in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Cruzsalud Health is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Cruzsalud Health 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.
Low bargaining power of suppliers
– Suppliers of Cruzsalud Health in the sector have low bargaining power. Cruzsalud: Health Care for Low-Sectors has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cruzsalud Health to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Cruzsalud Health is one of the most innovative firm in sector. Manager in Cruzsalud: Health Care for Low-Sectors Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Strategy & Execution industry
– Cruzsalud: Health Care for Low-Sectors firm has clearly differentiated products in the market place. This has enabled Cruzsalud Health to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Cruzsalud Health to invest into research and development (R&D) and innovation.
Learning organization
- Cruzsalud Health 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 Cruzsalud Health is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Cruzsalud: Health Care for Low-Sectors Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Cruzsalud Health in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Cruzsalud Health digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cruzsalud Health 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.
Weaknesses Cruzsalud: Health Care for Low-Sectors | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cruzsalud: Health Care for Low-Sectors are -
Aligning sales with marketing
– It come across in the case study Cruzsalud: Health Care for Low-Sectors that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Cruzsalud: Health Care for Low-Sectors can leverage the sales team experience to cultivate customer relationships as Cruzsalud Health is planning to shift buying processes online.
No frontier risks strategy
– After analyzing the HBR case study Cruzsalud: Health Care for Low-Sectors, it seems that company is thinking about the frontier risks that can impact Strategy & Execution 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Cruzsalud: Health Care for Low-Sectors 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 Cruzsalud Health 's lucrative customers.
Products dominated business model
– Even though Cruzsalud Health 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 - Cruzsalud: Health Care for Low-Sectors should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Cruzsalud Health has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow decision making process
– As mentioned earlier in the report, Cruzsalud Health 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. Cruzsalud Health 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Cruzsalud: Health Care for Low-Sectors HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Cruzsalud Health has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Cruzsalud Health 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Cruzsalud: Health Care for Low-Sectors, in the dynamic environment Cruzsalud Health has struggled to respond to the nimble upstart competition. Cruzsalud Health 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 Cruzsalud Health 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.
Lack of clear differentiation of Cruzsalud Health products
– To increase the profitability and margins on the products, Cruzsalud Health needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Cruzsalud: Health Care for Low-Sectors | 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 Cruzsalud: Health Care for Low-Sectors are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cruzsalud Health in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Cruzsalud Health can use these opportunities to build new business models that can help the communities that Cruzsalud Health operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Cruzsalud Health 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 Cruzsalud Health to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Cruzsalud Health 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Cruzsalud Health 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cruzsalud Health can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Cruzsalud Health can develop new processes and procedures in Strategy & Execution 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.
Buying journey improvements
– Cruzsalud Health can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Cruzsalud: Health Care for Low-Sectors 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.
Using analytics as competitive advantage
– Cruzsalud Health 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 Cruzsalud: Health Care for Low-Sectors - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cruzsalud Health to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Cruzsalud Health to increase its market reach. Cruzsalud Health will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Manufacturing automation
– Cruzsalud Health can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Cruzsalud Health is facing challenges because of the dominance of functional experts in the organization. Cruzsalud: Health Care for Low-Sectors 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 Strategy & Execution industry, but it has also influenced the consumer preferences. Cruzsalud Health can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Cruzsalud: Health Care for Low-Sectors External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Cruzsalud: Health Care for Low-Sectors are -
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Cruzsalud Health can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Cruzsalud Health needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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. Cruzsalud Health 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.
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 Cruzsalud Health in the Strategy & Execution sector and impact the bottomline of the organization.
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 Cruzsalud Health.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cruzsalud Health 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 Cruzsalud: Health Care for Low-Sectors .
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Cruzsalud Health with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Cruzsalud Health 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. Cruzsalud Health can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Cruzsalud: Health Care for Low-Sectors, Cruzsalud Health may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
High dependence on third party suppliers
– Cruzsalud Health 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.
Increasing wage structure of Cruzsalud Health
– 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 Cruzsalud Health.
Weighted SWOT Analysis of Cruzsalud: Health Care for Low-Sectors 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 Cruzsalud: Health Care for Low-Sectors 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 Cruzsalud: Health Care for Low-Sectors 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 Cruzsalud: Health Care for Low-Sectors 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 Cruzsalud: Health Care for Low-Sectors 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 Cruzsalud Health needs to make to build a sustainable competitive advantage.