The Promises and Constraints of Consumer-Directed Healthcare SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of The Promises and Constraints of Consumer-Directed Healthcare
Consumer-directed healthcare promises to reduce costs and increase quality by expanding provider choice for prospective patients. High-deductible insurance, employer- or government-subsidized health savings accounts, transparent pricing, and accurate information on clinical performance help generate millions of patients shopping for healthcare. As in any other well-behaved market, when patients shop, there is a link between financial reward and value for the individual patient. Absence of price competition, agency problems, and high barriers to entry in local markets are market failures that currently break this link in U.S. healthcare. Consumer-directed health plans are already popular among many employers and have established a momentum that indirectly shapes discussion of reform by the Obama administration. Complexity of reporting clinical results, dependence of treatment success on at-home patient behavior, and scientific ignorance among consumers threaten delivery of results promised by theory. Successful implementation requires regulator attention to sophisticated data reporting that adjusts for clinical risk, avoidance of patient-focused marketing that leads to over-consumption, and adequate subsidy of health savings accounts. In the end, implementation shifts the locus of healthcare system control from cost-shifting negotiations between employers, providers, and payers to new-found purchasing power of prospective patients.
Swot Analysis of "The Promises and Constraints of Consumer-Directed Healthcare" written by Philip T. Powell, Ron Laufer includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Healthcare Directed facing as an external strategic factors. Some of the topics covered in The Promises and Constraints of Consumer-Directed Healthcare case study are - Strategic Management Strategies, Personnel policies and Technology & Operations.
Some of the macro environment factors that can be used to understand the The Promises and Constraints of Consumer-Directed Healthcare casestudy better are - – geopolitical disruptions, there is backlash against globalization, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices,
supply chains are disrupted by pandemic , competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of The Promises and Constraints of Consumer-Directed Healthcare
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Promises and Constraints of Consumer-Directed Healthcare case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Healthcare Directed, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Healthcare Directed 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 The Promises and Constraints of Consumer-Directed Healthcare can be done for the following purposes –
1. Strategic planning using facts provided in The Promises and Constraints of Consumer-Directed Healthcare case study
2. Improving business portfolio management of Healthcare Directed
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 Healthcare Directed
Strengths The Promises and Constraints of Consumer-Directed Healthcare | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Healthcare Directed in The Promises and Constraints of Consumer-Directed Healthcare Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Healthcare Directed in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Healthcare Directed
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Healthcare Directed does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Healthcare Directed 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
– Healthcare Directed has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Promises and Constraints of Consumer-Directed Healthcare 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.
Low bargaining power of suppliers
– Suppliers of Healthcare Directed in the sector have low bargaining power. The Promises and Constraints of Consumer-Directed Healthcare has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Healthcare Directed to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Healthcare Directed 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 The Promises and Constraints of Consumer-Directed Healthcare - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Healthcare Directed has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Healthcare Directed to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Healthcare Directed is one of the leading recruiters in the industry. Managers in the The Promises and Constraints of Consumer-Directed Healthcare are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Healthcare Directed 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.
Highly skilled collaborators
– Healthcare Directed 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 The Promises and Constraints of Consumer-Directed Healthcare HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Healthcare Directed is one of the most innovative firm in sector. Manager in The Promises and Constraints of Consumer-Directed Healthcare Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Technology & Operations field
– Healthcare Directed 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 Healthcare Directed in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses The Promises and Constraints of Consumer-Directed Healthcare | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Promises and Constraints of Consumer-Directed Healthcare are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study The Promises and Constraints of Consumer-Directed Healthcare, is just above the industry average. Healthcare Directed 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.
Slow decision making process
– As mentioned earlier in the report, Healthcare Directed 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. Healthcare Directed 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study The Promises and Constraints of Consumer-Directed Healthcare, in the dynamic environment Healthcare Directed has struggled to respond to the nimble upstart competition. Healthcare Directed has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring
– The stress on hiring functional specialists at Healthcare Directed 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.
Low market penetration in new markets
– Outside its home market of Healthcare Directed, firm in the HBR case study The Promises and Constraints of Consumer-Directed Healthcare needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study The Promises and Constraints of Consumer-Directed Healthcare, 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.
Slow to strategic competitive environment developments
– As The Promises and Constraints of Consumer-Directed Healthcare HBR case study mentions - Healthcare Directed 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the The Promises and Constraints of Consumer-Directed Healthcare 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 Healthcare Directed has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Healthcare Directed 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.
Lack of clear differentiation of Healthcare Directed products
– To increase the profitability and margins on the products, Healthcare Directed needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Healthcare Directed 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.
Opportunities The Promises and Constraints of Consumer-Directed Healthcare | 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 The Promises and Constraints of Consumer-Directed Healthcare are -
Creating value in data economy
– The success of analytics program of Healthcare Directed has opened avenues for new revenue streams for the organization in the industry. This can help Healthcare Directed to build a more holistic ecosystem as suggested in the The Promises and Constraints of Consumer-Directed Healthcare case study. Healthcare Directed can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Healthcare Directed 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 Healthcare Directed to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Healthcare Directed 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.
Building a culture of innovation
– managers at Healthcare Directed 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, Healthcare Directed 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.
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 Healthcare Directed in the consumer business. Now Healthcare Directed can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Healthcare Directed 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, The Promises and Constraints of Consumer-Directed Healthcare, 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, Healthcare Directed can use these opportunities to build new business models that can help the communities that Healthcare Directed operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Healthcare Directed can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Healthcare Directed to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Healthcare Directed 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.
Manufacturing automation
– Healthcare Directed can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
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. Healthcare Directed can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats The Promises and Constraints of Consumer-Directed Healthcare External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Promises and Constraints of Consumer-Directed Healthcare are -
Stagnating economy with rate increase
– Healthcare Directed 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.
Regulatory challenges
– Healthcare Directed 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.
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.
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.
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. Healthcare Directed 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.
Environmental challenges
– Healthcare Directed 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. Healthcare Directed can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Healthcare Directed 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Healthcare Directed 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 The Promises and Constraints of Consumer-Directed Healthcare .
Consumer confidence and its impact on Healthcare Directed 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
– Healthcare Directed 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.
Technology acceleration in Forth Industrial Revolution
– Healthcare Directed has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Healthcare Directed 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.
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. Healthcare Directed can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The Promises and Constraints of Consumer-Directed Healthcare, Healthcare Directed 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 .
Weighted SWOT Analysis of The Promises and Constraints of Consumer-Directed Healthcare 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 The Promises and Constraints of Consumer-Directed Healthcare 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 The Promises and Constraints of Consumer-Directed Healthcare 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 The Promises and Constraints of Consumer-Directed Healthcare 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 The Promises and Constraints of Consumer-Directed Healthcare 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 Healthcare Directed needs to make to build a sustainable competitive advantage.