Virginia Mason Medical Center SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Virginia Mason Medical Center
In 2000, Dr. Gary Kaplan became CEO of the Virginia Mason Medical Center in Seattle, Washington. The hospital was facing significant challenges: It was losing money for the first time in its history, staff morale had plummeted, and area hospitals presented ardent competition. Considerable change was imminent. Within his first few months, Kaplan had rallied the organization around a new strategic direction: to become the quality leader in health care. What Kaplan and his administrators lacked was an effective tool to execute their strategy. Soon thereafter, a series of serendipitous events led to the discovery of the Toyota production system, and the Virginia Mason Medical Center became entrenched in an overwhelming challenge: how to institute a production model in health care.
Swot Analysis of "Virginia Mason Medical Center" written by Richard Bohmer, Erika M. Ferlins includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Kaplan Mason facing as an external strategic factors. Some of the topics covered in Virginia Mason Medical Center case study are - Strategic Management Strategies, Leadership, Manufacturing and Technology & Operations.
Some of the macro environment factors that can be used to understand the Virginia Mason Medical Center casestudy better are - – central banks are concerned over increasing inflation, technology disruption, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing,
increasing household debt because of falling income levels, geopolitical disruptions, etc
Introduction to SWOT Analysis of Virginia Mason Medical Center
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Virginia Mason Medical Center case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kaplan Mason, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kaplan Mason 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 Virginia Mason Medical Center can be done for the following purposes –
1. Strategic planning using facts provided in Virginia Mason Medical Center case study
2. Improving business portfolio management of Kaplan Mason
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Kaplan Mason
Strengths Virginia Mason Medical Center | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kaplan Mason in Virginia Mason Medical Center Harvard Business Review case study are -
Strong track record of project management
– Kaplan Mason is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Kaplan Mason 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 Kaplan Mason is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Virginia Mason Medical Center Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Kaplan Mason
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Kaplan Mason does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Kaplan Mason in the sector have low bargaining power. Virginia Mason Medical Center has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Kaplan Mason to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Kaplan Mason is one of the most innovative firm in sector. Manager in Virginia Mason Medical Center Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the Virginia Mason Medical Center 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.
Successful track record of launching new products
– Kaplan Mason has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Kaplan Mason 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.
High brand equity
– Kaplan Mason has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Kaplan Mason to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Kaplan Mason 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 Virginia Mason Medical Center - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Technology & Operations industry
– Virginia Mason Medical Center firm has clearly differentiated products in the market place. This has enabled Kaplan Mason to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Kaplan Mason to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Kaplan Mason 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.
Diverse revenue streams
– Kaplan Mason is present in almost all the verticals within the industry. This has provided firm in Virginia Mason Medical Center 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.
Weaknesses Virginia Mason Medical Center | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Virginia Mason Medical Center are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Virginia Mason Medical Center, it seems that the employees of Kaplan Mason 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 Kaplan Mason products
– To increase the profitability and margins on the products, Kaplan Mason needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– After analyzing the HBR case study Virginia Mason Medical Center, it seems that company is thinking about the frontier risks that can impact Technology & Operations strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Virginia Mason Medical Center 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 Kaplan Mason has relatively successful track record of launching new products.
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 Kaplan Mason supply chain. Even after few cautionary changes mentioned in the HBR case study - Virginia Mason Medical Center, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Kaplan Mason vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Kaplan Mason 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 operating costs
– Compare to the competitors, firm in the HBR case study Virginia Mason Medical Center 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 Kaplan Mason 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Virginia Mason Medical Center, in the dynamic environment Kaplan Mason has struggled to respond to the nimble upstart competition. Kaplan Mason has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Kaplan Mason is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Kaplan Mason needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Kaplan Mason to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Kaplan Mason 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.
Aligning sales with marketing
– It come across in the case study Virginia Mason Medical Center 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 Virginia Mason Medical Center can leverage the sales team experience to cultivate customer relationships as Kaplan Mason is planning to shift buying processes online.
Opportunities Virginia Mason Medical Center | 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 Virginia Mason Medical Center are -
Loyalty marketing
– Kaplan Mason 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.
Developing new processes and practices
– Kaplan Mason can develop new processes and procedures in Technology & Operations 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Kaplan Mason 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.
Using analytics as competitive advantage
– Kaplan Mason 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 Virginia Mason Medical Center - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Kaplan Mason 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 Kaplan Mason to increase its market reach. Kaplan Mason 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Kaplan Mason 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 Kaplan Mason 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Kaplan Mason can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Kaplan Mason is facing challenges because of the dominance of functional experts in the organization. Virginia Mason Medical Center 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Kaplan Mason 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, Virginia Mason Medical Center, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Kaplan Mason in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Buying journey improvements
– Kaplan Mason can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Virginia Mason Medical Center 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Kaplan Mason 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. Kaplan Mason 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.
Threats Virginia Mason Medical Center External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Virginia Mason Medical Center are -
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 Kaplan Mason business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kaplan Mason 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 Virginia Mason Medical Center .
Environmental challenges
– Kaplan Mason 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. Kaplan Mason can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
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.
Regulatory challenges
– Kaplan Mason 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 Technology & Operations industry regulations.
High dependence on third party suppliers
– Kaplan Mason 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.
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 Kaplan Mason in the Technology & Operations sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Kaplan Mason has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Kaplan Mason needs to keep up with the evolution of technology in the Technology & Operations 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.
Stagnating economy with rate increase
– Kaplan Mason can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Kaplan Mason in the Technology & Operations industry. The Technology & Operations 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.
Consumer confidence and its impact on Kaplan Mason 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Virginia Mason Medical Center, Kaplan Mason may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
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. Kaplan Mason 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 Virginia Mason Medical Center 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 Virginia Mason Medical Center 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 Virginia Mason Medical Center 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 Virginia Mason Medical Center 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 Virginia Mason Medical Center 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 Kaplan Mason needs to make to build a sustainable competitive advantage.
