OrthoChoice: Bundled Payments in the County of Stockholm (B) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of OrthoChoice: Bundled Payments in the County of Stockholm (B)
By the end of 2008, all major hospitals (one of which was private) and three private specialized orthopedic centers signed OrthoChoice contracts. In 2009, hip and knee replacements in the County of Stockholm for relatively healthy patients began being reimbursed. By 2013, OrthoChoice had covered 12,531 hip and knee replacements, accounting for 59% of such operations for county residents. Total payments were SEK 704.5 million ($109.4 million). Dr. Holger Stalberg and his team at the Stockholm County Council (SLL) were reviewing the results of the new payment approach and considering how to improve the model.
Authors :: Michael E. Porter, Clifford Marks, Zachary C. Landman
Swot Analysis of "OrthoChoice: Bundled Payments in the County of Stockholm (B)" written by Michael E. Porter, Clifford Marks, Zachary C. Landman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Orthochoice Stockholm facing as an external strategic factors. Some of the topics covered in OrthoChoice: Bundled Payments in the County of Stockholm (B) case study are - Strategic Management Strategies, Organizational culture, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the OrthoChoice: Bundled Payments in the County of Stockholm (B) casestudy better are - – increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, technology disruption, challanges to central banks by blockchain based private currencies, geopolitical disruptions,
there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of OrthoChoice: Bundled Payments in the County of Stockholm (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in OrthoChoice: Bundled Payments in the County of Stockholm (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Orthochoice Stockholm, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Orthochoice Stockholm 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 OrthoChoice: Bundled Payments in the County of Stockholm (B) can be done for the following purposes –
1. Strategic planning using facts provided in OrthoChoice: Bundled Payments in the County of Stockholm (B) case study
2. Improving business portfolio management of Orthochoice Stockholm
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 Orthochoice Stockholm
Strengths OrthoChoice: Bundled Payments in the County of Stockholm (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Orthochoice Stockholm in OrthoChoice: Bundled Payments in the County of Stockholm (B) Harvard Business Review case study are -
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Orthochoice Stockholm digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Orthochoice Stockholm 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.
Analytics focus
– Orthochoice Stockholm 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 Michael E. Porter, Clifford Marks, Zachary C. Landman 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.
Strong track record of project management
– Orthochoice Stockholm is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Orthochoice Stockholm in the sector have low bargaining power. OrthoChoice: Bundled Payments in the County of Stockholm (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Orthochoice Stockholm to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Orthochoice Stockholm 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 Orthochoice Stockholm is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in OrthoChoice: Bundled Payments in the County of Stockholm (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Orthochoice Stockholm in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Orthochoice Stockholm 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 OrthoChoice: Bundled Payments in the County of Stockholm (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Orthochoice Stockholm 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 OrthoChoice: Bundled Payments in the County of Stockholm (B) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Orthochoice Stockholm has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Orthochoice Stockholm to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Strategy & Execution field
– Orthochoice Stockholm 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 Orthochoice Stockholm in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Orthochoice Stockholm is present in almost all the verticals within the industry. This has provided firm in OrthoChoice: Bundled Payments in the County of Stockholm (B) 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.
Organizational Resilience of Orthochoice Stockholm
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Orthochoice Stockholm does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses OrthoChoice: Bundled Payments in the County of Stockholm (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of OrthoChoice: Bundled Payments in the County of Stockholm (B) are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Orthochoice Stockholm is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study OrthoChoice: Bundled Payments in the County of Stockholm (B) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High cash cycle compare to competitors
Orthochoice Stockholm 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 to strategic competitive environment developments
– As OrthoChoice: Bundled Payments in the County of Stockholm (B) HBR case study mentions - Orthochoice Stockholm 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 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 Orthochoice Stockholm supply chain. Even after few cautionary changes mentioned in the HBR case study - OrthoChoice: Bundled Payments in the County of Stockholm (B), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Orthochoice Stockholm vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Orthochoice Stockholm 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. Orthochoice Stockholm 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.
Low market penetration in new markets
– Outside its home market of Orthochoice Stockholm, firm in the HBR case study OrthoChoice: Bundled Payments in the County of Stockholm (B) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study OrthoChoice: Bundled Payments in the County of Stockholm (B), 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.
Aligning sales with marketing
– It come across in the case study OrthoChoice: Bundled Payments in the County of Stockholm (B) 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 OrthoChoice: Bundled Payments in the County of Stockholm (B) can leverage the sales team experience to cultivate customer relationships as Orthochoice Stockholm is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Orthochoice Stockholm 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.
Skills based hiring
– The stress on hiring functional specialists at Orthochoice Stockholm 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study OrthoChoice: Bundled Payments in the County of Stockholm (B), in the dynamic environment Orthochoice Stockholm has struggled to respond to the nimble upstart competition. Orthochoice Stockholm has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities OrthoChoice: Bundled Payments in the County of Stockholm (B) | 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 OrthoChoice: Bundled Payments in the County of Stockholm (B) are -
Leveraging digital technologies
– Orthochoice Stockholm 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Orthochoice Stockholm 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, OrthoChoice: Bundled Payments in the County of Stockholm (B), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Orthochoice Stockholm 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.
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 Orthochoice Stockholm 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.
Better consumer reach
– The expansion of the 5G network will help Orthochoice Stockholm to increase its market reach. Orthochoice Stockholm 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Orthochoice Stockholm 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Orthochoice Stockholm 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.
Loyalty marketing
– Orthochoice Stockholm 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, Orthochoice Stockholm is facing challenges because of the dominance of functional experts in the organization. OrthoChoice: Bundled Payments in the County of Stockholm (B) 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.
Buying journey improvements
– Orthochoice Stockholm can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. OrthoChoice: Bundled Payments in the County of Stockholm (B) 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.
Creating value in data economy
– The success of analytics program of Orthochoice Stockholm has opened avenues for new revenue streams for the organization in the industry. This can help Orthochoice Stockholm to build a more holistic ecosystem as suggested in the OrthoChoice: Bundled Payments in the County of Stockholm (B) case study. Orthochoice Stockholm 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 Orthochoice Stockholm 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 Strategy & Execution segment.
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. Orthochoice Stockholm can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats OrthoChoice: Bundled Payments in the County of Stockholm (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study OrthoChoice: Bundled Payments in the County of Stockholm (B) are -
Regulatory challenges
– Orthochoice Stockholm 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 Strategy & Execution industry regulations.
High dependence on third party suppliers
– Orthochoice Stockholm 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Orthochoice Stockholm 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 OrthoChoice: Bundled Payments in the County of Stockholm (B) .
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. Orthochoice Stockholm needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Environmental challenges
– Orthochoice Stockholm 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. Orthochoice Stockholm can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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 Orthochoice Stockholm business can come under increasing regulations regarding data privacy, data security, etc.
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.
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 Orthochoice Stockholm in the Strategy & Execution sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Orthochoice Stockholm with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Orthochoice Stockholm is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Orthochoice Stockholm 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.
Technology acceleration in Forth Industrial Revolution
– Orthochoice Stockholm has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Orthochoice Stockholm 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.
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. Orthochoice Stockholm can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of OrthoChoice: Bundled Payments in the County of Stockholm (B) 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 OrthoChoice: Bundled Payments in the County of Stockholm (B) 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 OrthoChoice: Bundled Payments in the County of Stockholm (B) 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 OrthoChoice: Bundled Payments in the County of Stockholm (B) 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 OrthoChoice: Bundled Payments in the County of Stockholm (B) 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 Orthochoice Stockholm needs to make to build a sustainable competitive advantage.
