Case Study Description of VITAS: Innovative Hospice Care
VITAS, a for-profit hospice, has grown through acquisitions and start-ups. The company considers a rollup strategy, and Deirdre Lawe must decide whether to make a particular acquisition.
Swot Analysis of "VITAS: Innovative Hospice Care" written by Roger Hallowell, Tonicia Hampton includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Vitas Hospice facing as an external strategic factors. Some of the topics covered in VITAS: Innovative Hospice Care case study are - Strategic Management Strategies, Growth strategy, Mergers & acquisitions, Organizational structure, Supply chain and Technology & Operations.
Some of the macro environment factors that can be used to understand the VITAS: Innovative Hospice Care casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, geopolitical disruptions, supply chains are disrupted by pandemic ,
increasing household debt because of falling income levels, increasing commodity prices, etc
Introduction to SWOT Analysis of VITAS: Innovative Hospice Care
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in VITAS: Innovative Hospice Care case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Vitas Hospice, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Vitas Hospice 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 VITAS: Innovative Hospice Care can be done for the following purposes –
1. Strategic planning using facts provided in VITAS: Innovative Hospice Care case study
2. Improving business portfolio management of Vitas Hospice
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 Vitas Hospice
Strengths VITAS: Innovative Hospice Care | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Vitas Hospice in VITAS: Innovative Hospice Care Harvard Business Review case study are -
Sustainable margins compare to other players in Technology & Operations industry
– VITAS: Innovative Hospice Care firm has clearly differentiated products in the market place. This has enabled Vitas Hospice to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Vitas Hospice to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Vitas Hospice 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 VITAS: Innovative Hospice Care - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Vitas Hospice digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Vitas Hospice 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.
Cross disciplinary teams
– Horizontal connected teams at the Vitas Hospice 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.
Operational resilience
– The operational resilience strategy in the VITAS: Innovative Hospice Care 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.
Diverse revenue streams
– Vitas Hospice is present in almost all the verticals within the industry. This has provided firm in VITAS: Innovative Hospice Care 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.
Superior customer experience
– The customer experience strategy of Vitas Hospice in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Vitas Hospice has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Vitas Hospice to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Vitas Hospice 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.
Training and development
– Vitas Hospice has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in VITAS: Innovative Hospice Care 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
– Vitas Hospice 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 Vitas Hospice in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Vitas Hospice
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Vitas Hospice does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses VITAS: Innovative Hospice Care | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of VITAS: Innovative Hospice Care are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study VITAS: Innovative Hospice Care, is just above the industry average. Vitas Hospice 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.
Low market penetration in new markets
– Outside its home market of Vitas Hospice, firm in the HBR case study VITAS: Innovative Hospice Care 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 VITAS: Innovative Hospice Care 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 Vitas Hospice has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study VITAS: Innovative Hospice Care 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 Vitas Hospice 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Vitas Hospice is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Vitas Hospice needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Vitas Hospice to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Vitas Hospice 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.
Skills based hiring
– The stress on hiring functional specialists at Vitas Hospice 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.
Slow to strategic competitive environment developments
– As VITAS: Innovative Hospice Care HBR case study mentions - Vitas Hospice takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
No frontier risks strategy
– After analyzing the HBR case study VITAS: Innovative Hospice Care, 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.
Lack of clear differentiation of Vitas Hospice products
– To increase the profitability and margins on the products, Vitas Hospice needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, Roger Hallowell, Tonicia Hampton suggests that, Vitas Hospice 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.
Opportunities VITAS: Innovative Hospice Care | 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 VITAS: Innovative Hospice Care are -
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 Vitas Hospice in the consumer business. Now Vitas Hospice can target international markets with far fewer capital restrictions requirements than the existing system.
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. Vitas Hospice 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. Vitas Hospice 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.
Creating value in data economy
– The success of analytics program of Vitas Hospice has opened avenues for new revenue streams for the organization in the industry. This can help Vitas Hospice to build a more holistic ecosystem as suggested in the VITAS: Innovative Hospice Care case study. Vitas Hospice can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Vitas Hospice 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 VITAS: Innovative Hospice Care - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Vitas Hospice to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Vitas Hospice 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 Vitas Hospice to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Vitas Hospice is facing challenges because of the dominance of functional experts in the organization. VITAS: Innovative Hospice Care 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.
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. Vitas Hospice can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Vitas Hospice 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Vitas Hospice can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Vitas Hospice 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.
Leveraging digital technologies
– Vitas Hospice can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Vitas Hospice 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, VITAS: Innovative Hospice Care, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Vitas Hospice can use these opportunities to build new business models that can help the communities that Vitas Hospice operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Threats VITAS: Innovative Hospice Care External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study VITAS: Innovative Hospice Care are -
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Vitas Hospice can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Vitas Hospice 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.
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 Vitas Hospice business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Vitas Hospice 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.
Environmental challenges
– Vitas Hospice 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. Vitas Hospice can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
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. Vitas Hospice needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Increasing wage structure of Vitas Hospice
– 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 Vitas Hospice.
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. Vitas Hospice 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.
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.
Technology acceleration in Forth Industrial Revolution
– Vitas Hospice has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Vitas Hospice 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study VITAS: Innovative Hospice Care, Vitas Hospice 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 .
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 Vitas Hospice.
Consumer confidence and its impact on Vitas Hospice 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.
Weighted SWOT Analysis of VITAS: Innovative Hospice Care 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 VITAS: Innovative Hospice Care 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 VITAS: Innovative Hospice Care 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 VITAS: Innovative Hospice Care 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 VITAS: Innovative Hospice Care 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 Vitas Hospice needs to make to build a sustainable competitive advantage.