OrthoChoice: Bundled Payments in the County of Stockholm (A) 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 (A)
It was the waiting that drew the attention of the Stockholm County Council. In 2008, patients seeking a hip or knee replacement in Stockholm County faced wait times of up to two years of sometimes debilitating pain, intermittent missed work and income, and the trials of disability. Seeking a new model to lower wait times, but also improve patient choice of care, County Council Senior Medical Adviser, Dr. Holger Stalberg, set out to create a bundled payment system for hip and knee replacements in the County. The new model, called OrthoChoice, was set to go into operation on January 1, 2009.
Authors :: Michael E. Porter, Clifford Marks, Zachary C. Landman
Swot Analysis of "OrthoChoice: Bundled Payments in the County of Stockholm (A)" 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 County Stockholm facing as an external strategic factors. Some of the topics covered in OrthoChoice: Bundled Payments in the County of Stockholm (A) 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 (A) casestudy better are - – increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of OrthoChoice: Bundled Payments in the County of Stockholm (A)
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 (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the County Stockholm, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which County 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 (A) can be done for the following purposes –
1. Strategic planning using facts provided in OrthoChoice: Bundled Payments in the County of Stockholm (A) case study
2. Improving business portfolio management of County 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 County Stockholm
Strengths OrthoChoice: Bundled Payments in the County of Stockholm (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of County Stockholm in OrthoChoice: Bundled Payments in the County of Stockholm (A) Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the OrthoChoice: Bundled Payments in the County of Stockholm (A) 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For County Stockholm digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. County 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.
Learning organization
- County 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 County 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 (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– County 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.
Superior customer experience
– The customer experience strategy of County 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)
– County 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 (A) - 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
– County 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 (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– County Stockholm has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled County Stockholm to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that County Stockholm 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.
Innovation driven organization
– County Stockholm is one of the most innovative firm in sector. Manager in OrthoChoice: Bundled Payments in the County of Stockholm (A) 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
– OrthoChoice: Bundled Payments in the County of Stockholm (A) firm has clearly differentiated products in the market place. This has enabled County Stockholm to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped County Stockholm to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– County Stockholm has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. County Stockholm 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.
Weaknesses OrthoChoice: Bundled Payments in the County of Stockholm (A) | 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 (A) are -
Need for greater diversity
– County Stockholm 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study OrthoChoice: Bundled Payments in the County of Stockholm (A), is just above the industry average. County Stockholm 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.
Workers concerns about automation
– As automation is fast increasing in the segment, County 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.
Low market penetration in new markets
– Outside its home market of County Stockholm, firm in the HBR case study OrthoChoice: Bundled Payments in the County of Stockholm (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the OrthoChoice: Bundled Payments in the County of Stockholm (A) 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 County Stockholm has relatively successful track record of launching new products.
No frontier risks strategy
– After analyzing the HBR case study OrthoChoice: Bundled Payments in the County of Stockholm (A), 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.
Interest costs
– Compare to the competition, County Stockholm 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.
Capital Spending Reduction
– Even during the low interest decade, County Stockholm 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.
Increasing silos among functional specialists
– The organizational structure of County Stockholm is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. County Stockholm needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help County Stockholm to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study OrthoChoice: Bundled Payments in the County of Stockholm (A) 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 (A) can leverage the sales team experience to cultivate customer relationships as County Stockholm is planning to shift buying processes online.
Products dominated business model
– Even though County Stockholm 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 - OrthoChoice: Bundled Payments in the County of Stockholm (A) should strive to include more intangible value offerings along with its core products and services.
Opportunities OrthoChoice: Bundled Payments in the County of Stockholm (A) | 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 (A) are -
Manufacturing automation
– County 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, County 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 (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for County Stockholm 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.
Creating value in data economy
– The success of analytics program of County Stockholm has opened avenues for new revenue streams for the organization in the industry. This can help County Stockholm to build a more holistic ecosystem as suggested in the OrthoChoice: Bundled Payments in the County of Stockholm (A) case study. County Stockholm can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 County 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, County Stockholm is facing challenges because of the dominance of functional experts in the organization. OrthoChoice: Bundled Payments in the County of Stockholm (A) 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. County Stockholm can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– County Stockholm 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 OrthoChoice: Bundled Payments in the County of Stockholm (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help County Stockholm to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– County 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects County Stockholm 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
– County Stockholm 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.
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. County Stockholm can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 County Stockholm in the consumer business. Now County Stockholm can target international markets with far fewer capital restrictions requirements than the existing system.
Threats OrthoChoice: Bundled Payments in the County of Stockholm (A) 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 (A) are -
Technology acceleration in Forth Industrial Revolution
– County Stockholm has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, County 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents County Stockholm with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 County Stockholm business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– County 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. County Stockholm can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for County Stockholm 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.
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 County Stockholm in the Strategy & Execution sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, County 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 (A) .
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 County Stockholm.
Regulatory challenges
– County 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.
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.
Shortening product life cycle
– it is one of the major threat that County Stockholm is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of County Stockholm
– 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 County Stockholm.
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.
Weighted SWOT Analysis of OrthoChoice: Bundled Payments in the County of Stockholm (A) 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 (A) 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 (A) 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 (A) 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 (A) 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 County Stockholm needs to make to build a sustainable competitive advantage.