Case Study Description of Newton-Wellesley Hospital
How will Newton-Wellesley Hospital (NWH) preserve its private practice tradition while remaining effective and competitive in a healthcare industry demanding increasing integration between physicians and hospitals? This is the decision facing Newton-Wellesley Hospital president Mike Jellinek in 2009, as several trends-higher costs and lower revenues, shifting workforce demographics, and changing reimbursement models-threaten to disrupt NWH's organizational model. Similar to other U.S. community hospitals, NWH has historically been staffed primarily with private practitioners; however, in recent years Jellinek has taken several steps toward further integration, such as hiring primary care physicians and hospitalists, and even proposing formation of a physicians' organization (PO)-a move its veteran private practitioners sharply oppose. In 2009, NWH is renowned for high-quality care and is financially strong; yet, given external pressures, most at the hospital agree that reforms are needed to improve the hospital's and physicians' profitability while maintaining highest-quality patient care. Diverging opinions over how to improve the hospital has exposed differences between some private practice physicians and the administration. The crux of their disagreement centers on one question: how to make the organizational changes required to keep NWH effective and competitive in the face of a diminishing revenue growth rate, while honoring its tradition of physician independence.
Swot Analysis of "Newton-Wellesley Hospital" written by Richard Bohmer, Natalie Kindred includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nwh Wellesley facing as an external strategic factors. Some of the topics covered in Newton-Wellesley Hospital case study are - Strategic Management Strategies, Change management, Growth strategy, Organizational structure and Technology & Operations.
Some of the macro environment factors that can be used to understand the Newton-Wellesley Hospital casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, increasing energy prices, there is increasing trade war between United States & China,
increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Newton-Wellesley Hospital
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Newton-Wellesley Hospital case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nwh Wellesley, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nwh Wellesley 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 Newton-Wellesley Hospital can be done for the following purposes –
1. Strategic planning using facts provided in Newton-Wellesley Hospital case study
2. Improving business portfolio management of Nwh Wellesley
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 Nwh Wellesley
Strengths Newton-Wellesley Hospital | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nwh Wellesley in Newton-Wellesley Hospital Harvard Business Review case study are -
High brand equity
– Nwh Wellesley has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Nwh Wellesley to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Nwh Wellesley 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 Nwh Wellesley is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Newton-Wellesley Hospital Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Nwh Wellesley is one of the most innovative firm in sector. Manager in Newton-Wellesley Hospital Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Nwh Wellesley in the sector have low bargaining power. Newton-Wellesley Hospital has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Nwh Wellesley to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Nwh Wellesley 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 Richard Bohmer, Natalie Kindred 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.
Ability to recruit top talent
– Nwh Wellesley is one of the leading recruiters in the industry. Managers in the Newton-Wellesley Hospital are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Nwh Wellesley digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Nwh Wellesley 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.
Training and development
– Nwh Wellesley has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Newton-Wellesley Hospital 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.
Ability to lead change in Technology & Operations field
– Nwh Wellesley 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 Nwh Wellesley in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Nwh Wellesley is present in almost all the verticals within the industry. This has provided firm in Newton-Wellesley Hospital 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.
Highly skilled collaborators
– Nwh Wellesley 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 Newton-Wellesley Hospital HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Nwh Wellesley in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Newton-Wellesley Hospital | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Newton-Wellesley Hospital are -
High bargaining power of channel partners
– Because of the regulatory requirements, Richard Bohmer, Natalie Kindred suggests that, Nwh Wellesley is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High cash cycle compare to competitors
Nwh Wellesley 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 Newton-Wellesley Hospital 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 Nwh Wellesley 's lucrative customers.
Products dominated business model
– Even though Nwh Wellesley 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 - Newton-Wellesley Hospital should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Nwh Wellesley products
– To increase the profitability and margins on the products, Nwh Wellesley needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Nwh Wellesley 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.
Aligning sales with marketing
– It come across in the case study Newton-Wellesley Hospital 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 Newton-Wellesley Hospital can leverage the sales team experience to cultivate customer relationships as Nwh Wellesley is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Nwh Wellesley 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. Nwh Wellesley 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.
No frontier risks strategy
– After analyzing the HBR case study Newton-Wellesley Hospital, 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.
Need for greater diversity
– Nwh Wellesley 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.
Interest costs
– Compare to the competition, Nwh Wellesley 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.
Opportunities Newton-Wellesley Hospital | 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 Newton-Wellesley Hospital are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Nwh Wellesley 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.
Developing new processes and practices
– Nwh Wellesley 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.
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. Nwh Wellesley can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Nwh Wellesley 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. Nwh Wellesley 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Nwh Wellesley 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, Newton-Wellesley Hospital, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Nwh Wellesley 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 Technology & Operations segment.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Nwh Wellesley 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 Nwh Wellesley to hire the very best people irrespective of their geographical location.
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. Nwh Wellesley can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Nwh Wellesley 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.
Loyalty marketing
– Nwh Wellesley 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 Nwh Wellesley can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Nwh Wellesley can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Newton-Wellesley Hospital 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Nwh Wellesley can use these opportunities to build new business models that can help the communities that Nwh Wellesley operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Threats Newton-Wellesley Hospital External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Newton-Wellesley Hospital are -
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. Nwh Wellesley 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Nwh Wellesley with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Nwh Wellesley needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Regulatory challenges
– Nwh Wellesley 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Nwh Wellesley 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 Newton-Wellesley Hospital .
Environmental challenges
– Nwh Wellesley 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. Nwh Wellesley can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Consumer confidence and its impact on Nwh Wellesley 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.
High dependence on third party suppliers
– Nwh Wellesley 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.
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 Nwh Wellesley business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Nwh Wellesley 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 Nwh Wellesley 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.
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 Nwh Wellesley in the Technology & Operations sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Newton-Wellesley Hospital 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 Newton-Wellesley Hospital 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 Newton-Wellesley Hospital 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 Newton-Wellesley Hospital 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 Newton-Wellesley Hospital 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 Nwh Wellesley needs to make to build a sustainable competitive advantage.