Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service
Key State Blue Cross and Blue Shield Plan (a disguised case of an actual BCBS Plan) is the merged product of three state plans. Initially burdened with a reputation of poor customer service, Key State's executives decided to invest heavily in service improvement, eventually achieving superior levels. Key State's high-quality customer service emerged as a true competitive advantage for its customers, who were primarily businesses and health benefits consultants who influenced corporate purchasers of health insurance. The Key State brand came to be synonymous with personal service, security, choice, and dependability. But the health care insurance market was changing under Key State's feet. Spiraling costs meant that high-quality service became less of a competitive advantage as employers were lured by low-cost, low-service providers. Many employers cut or dropped health care benefits entirely, swelling the ranks of the under- and uninsured, who in turn were extremely price-sensitive when shopping for health insurance on their own. Finally, the health care insurance market was being revolutionized by financial institutions willing to hold health benefit accounts and pay providers directly, thereby eliminating the need for Key State as a mediator. Key State executives were aware of these changes but were challenged by the mindset, culture, and organizational design custom-fit to their business accounts. The case asks the reader to consider whether Key State has the right number of target markets, whether it should have one brand or several for its different target markets, what it should do for the uninsured, and how it should improve its brand experience in light of the industry's changing landscape. All of these decisions will have significant implications for the organizational design of Key State.
Swot Analysis of "Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service" written by Robert D. Dewar includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Key Health facing as an external strategic factors. Some of the topics covered in Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service case study are - Strategic Management Strategies, Organizational structure, Personnel policies, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service casestudy better are - – increasing transportation and logistics costs, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, geopolitical disruptions, supply chains are disrupted by pandemic , increasing commodity prices,
increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Key Health, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Key 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 Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service can be done for the following purposes –
1. Strategic planning using facts provided in Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service case study
2. Improving business portfolio management of Key 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 Key Health
Strengths Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Key Health in Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service Harvard Business Review case study are -
Innovation driven organization
– Key Health is one of the most innovative firm in sector. Manager in Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Key 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 Key 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.
Diverse revenue streams
– Key Health is present in almost all the verticals within the industry. This has provided firm in Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service 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.
Cross disciplinary teams
– Horizontal connected teams at the Key Health 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
– Key Health has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Key Health 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.
Analytics focus
– Key Health 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 Robert D. Dewar 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.
Operational resilience
– The operational resilience strategy in the Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service 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.
Low bargaining power of suppliers
– Suppliers of Key Health in the sector have low bargaining power. Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Key Health to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Key Health
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Key Health does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Key Health in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Key Health has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Key Health to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service are -
Workers concerns about automation
– As automation is fast increasing in the segment, Key Health needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service, is just above the industry average. Key Health needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Slow to strategic competitive environment developments
– As Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service HBR case study mentions - Key Health 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.
Need for greater diversity
– Key Health has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Slow decision making process
– As mentioned earlier in the report, Key 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. Key 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.
Products dominated business model
– Even though Key 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 - Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Key Health is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service, in the dynamic environment Key Health has struggled to respond to the nimble upstart competition. Key Health has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of Key Health, firm in the HBR case study Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Key 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.
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 Key Health supply chain. Even after few cautionary changes mentioned in the HBR case study - Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Key Health vulnerable to further global disruptions in South East Asia.
Opportunities Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service | 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 Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service are -
Creating value in data economy
– The success of analytics program of Key Health has opened avenues for new revenue streams for the organization in the industry. This can help Key Health to build a more holistic ecosystem as suggested in the Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service case study. Key Health can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Key Health 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.
Manufacturing automation
– Key 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.
Using analytics as competitive advantage
– Key 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 Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Key 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 Key Health to increase its market reach. Key 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Key Health 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, Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Key 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 Key Health to hire the very best people irrespective of their geographical location.
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. Key Health can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Key Health can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Key Health to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Key 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.
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 Key Health in the consumer business. Now Key Health can target international markets with far fewer capital restrictions requirements than the existing system.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Key Health can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service are -
Environmental challenges
– Key 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. Key Health can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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. Key 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Key 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 Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Key Health in the Strategy & Execution industry. The Strategy & Execution 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.
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.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Key Health business can come under increasing regulations regarding data privacy, data security, etc.
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 Key Health in the Strategy & Execution sector and impact the bottomline of the organization.
Consumer confidence and its impact on Key Health 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.
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 Key Health.
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. Key Health needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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. Key Health can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Key Health is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Key Health has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Key Health needs to keep up with the evolution of technology in the Strategy & Execution 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.
Weighted SWOT Analysis of Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service 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 Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service 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 Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service 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 Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service 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 Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service 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 Key Health needs to make to build a sustainable competitive advantage.
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