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 - – wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, increasing energy prices, geopolitical disruptions,
supply chains are disrupted by pandemic , there is backlash against globalization, 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 -
Learning organization
- Key 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 Key Health is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders 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 emphasize – knowledge, initiative, and innovation.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Key Health digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Key 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.
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.
Training and development
– Key Health has one of the best training and development program in the industry. The effectiveness of the training programs can be measured 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 by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
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.
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.
Sustainable margins compare to other players in Strategy & Execution industry
– Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service firm has clearly differentiated products in the market place. This has enabled Key Health to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Key Health to invest into research and development (R&D) and innovation.
Ability to lead change in Strategy & Execution field
– Key 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 Key Health in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
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.
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.
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 -
Skills based hiring
– The stress on hiring functional specialists at Key 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.
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.
Employees’ incomplete understanding of strategy
– From the instances 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 seems that the employees of Key Health don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Lack of clear differentiation of Key Health products
– To increase the profitability and margins on the products, Key Health needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, 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 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 Key Health 's lucrative customers.
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.
Aligning sales with marketing
– It come across in the case study Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service 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 Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service can leverage the sales team experience to cultivate customer relationships as Key Health is planning to shift buying processes online.
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.
Capital Spending Reduction
– Even during the low interest decade, Key Health 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 Key Health is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Key Health needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Key Health to focus more on services rather than just following the product oriented approach.
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 -
Buying journey improvements
– Key Health can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Key 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.
Building a culture of innovation
– managers at Key Health 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.
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.
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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Key Health is facing challenges because of the dominance of functional experts in the organization. Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service 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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Key Health can use these opportunities to build new business models that can help the communities that Key Health operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Key Health can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Key Health can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
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.
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 -
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.
High dependence on third party suppliers
– Key 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.
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.
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.
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 .
Regulatory challenges
– Key Health 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 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.
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Key Health with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Key State Blue Cross and Blue Shield Plan: A Strategy for Winning in the Market through Customer-Focused Service, Key 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 .
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.
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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