Case Study Description of Asante Teaching Hospital: Activity-Based Costing
In August 2015, an intern at Asante Teaching Hospital, a prestigious not-for-profit hospital in Johannesburg, South Africa, wanted to organize the cost data she had gathered from staff interviews into clear recommendations for the hospital's chief executive officer. Asante Teaching Hospital's maternity ward competitors had begun offering bundled pricing for natural births, and the intern wondered if Asante Teaching Hospital should do the same. In order to calculate the costs of the service, she planned to employ both activity-based and time-driven activity-based costing techniques. With this information, she could present the results of her analysis and recommendations for a pricing strategy. Melissa Jean is affiliated with Brescia University College. Courtney Young is affiliated with Brescia University College.
Swot Analysis of "Asante Teaching Hospital: Activity-Based Costing" written by Melissa Jean, Courtney Young includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Asante Brescia facing as an external strategic factors. Some of the topics covered in Asante Teaching Hospital: Activity-Based Costing case study are - Strategic Management Strategies, Health, Pricing and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Asante Teaching Hospital: Activity-Based Costing casestudy better are - – supply chains are disrupted by pandemic , increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, technology disruption, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google,
wage bills are increasing, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Asante Teaching Hospital: Activity-Based Costing
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Asante Teaching Hospital: Activity-Based Costing case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Asante Brescia, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Asante Brescia 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 Asante Teaching Hospital: Activity-Based Costing can be done for the following purposes –
1. Strategic planning using facts provided in Asante Teaching Hospital: Activity-Based Costing case study
2. Improving business portfolio management of Asante Brescia
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Asante Brescia
Strengths Asante Teaching Hospital: Activity-Based Costing | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Asante Brescia in Asante Teaching Hospital: Activity-Based Costing Harvard Business Review case study are -
Effective Research and Development (R&D)
– Asante Brescia 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 Asante Teaching Hospital: Activity-Based Costing - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Asante Brescia in the sector have low bargaining power. Asante Teaching Hospital: Activity-Based Costing has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Asante Brescia to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Asante Brescia 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 Asante Teaching Hospital: Activity-Based Costing HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Asante Brescia has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Asante Brescia to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Asante Brescia is one of the most innovative firm in sector. Manager in Asante Teaching Hospital: Activity-Based Costing 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 Asante Teaching Hospital: Activity-Based Costing 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.
Cross disciplinary teams
– Horizontal connected teams at the Asante Brescia 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.
High switching costs
– The high switching costs that Asante Brescia 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.
Ability to recruit top talent
– Asante Brescia is one of the leading recruiters in the industry. Managers in the Asante Teaching Hospital: Activity-Based Costing are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Asante Brescia 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 Asante Brescia is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Asante Teaching Hospital: Activity-Based Costing Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Asante Brescia has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Asante Brescia 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.
Sustainable margins compare to other players in Finance & Accounting industry
– Asante Teaching Hospital: Activity-Based Costing firm has clearly differentiated products in the market place. This has enabled Asante Brescia to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Asante Brescia to invest into research and development (R&D) and innovation.
Weaknesses Asante Teaching Hospital: Activity-Based Costing | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Asante Teaching Hospital: Activity-Based Costing are -
Aligning sales with marketing
– It come across in the case study Asante Teaching Hospital: Activity-Based Costing 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 Asante Teaching Hospital: Activity-Based Costing can leverage the sales team experience to cultivate customer relationships as Asante Brescia is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Asante Teaching Hospital: Activity-Based Costing, is just above the industry average. Asante Brescia needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Asante Teaching Hospital: Activity-Based Costing, it seems that the employees of Asante Brescia 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.
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 Asante Brescia supply chain. Even after few cautionary changes mentioned in the HBR case study - Asante Teaching Hospital: Activity-Based Costing, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Asante Brescia vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Melissa Jean, Courtney Young suggests that, Asante Brescia 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Asante Teaching Hospital: Activity-Based Costing 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 Asante Brescia has relatively successful track record of launching new products.
No frontier risks strategy
– After analyzing the HBR case study Asante Teaching Hospital: Activity-Based Costing, it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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 decision making process
– As mentioned earlier in the report, Asante Brescia 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. Asante Brescia 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.
Lack of clear differentiation of Asante Brescia products
– To increase the profitability and margins on the products, Asante Brescia needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Asante Brescia 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Asante Teaching Hospital: Activity-Based Costing 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 Asante Brescia 's lucrative customers.
Opportunities Asante Teaching Hospital: Activity-Based Costing | 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 Asante Teaching Hospital: Activity-Based Costing are -
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 Asante Brescia 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.
Building a culture of innovation
– managers at Asante Brescia 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 Finance & Accounting segment.
Better consumer reach
– The expansion of the 5G network will help Asante Brescia to increase its market reach. Asante Brescia 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.
Leveraging digital technologies
– Asante Brescia 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.
Creating value in data economy
– The success of analytics program of Asante Brescia has opened avenues for new revenue streams for the organization in the industry. This can help Asante Brescia to build a more holistic ecosystem as suggested in the Asante Teaching Hospital: Activity-Based Costing case study. Asante Brescia can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Asante Brescia can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Asante Brescia 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Asante Brescia is facing challenges because of the dominance of functional experts in the organization. Asante Teaching Hospital: Activity-Based Costing 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Asante Brescia 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.
Manufacturing automation
– Asante Brescia can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Asante Brescia 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. Asante Brescia 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.
Developing new processes and practices
– Asante Brescia can develop new processes and procedures in Finance & Accounting 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Asante Brescia can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Asante Teaching Hospital: Activity-Based Costing External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Asante Teaching Hospital: Activity-Based Costing are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Asante Brescia in the Finance & Accounting industry. The Finance & Accounting 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 Asante Brescia 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.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Asante Brescia 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 Asante Teaching Hospital: Activity-Based Costing, Asante Brescia may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Environmental challenges
– Asante Brescia 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. Asante Brescia can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Regulatory challenges
– Asante Brescia 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 Finance & Accounting industry regulations.
Shortening product life cycle
– it is one of the major threat that Asante Brescia is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Asante Brescia 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.
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 Asante Brescia.
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 Asante Brescia business can come under increasing regulations regarding data privacy, data security, etc.
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. Asante Brescia 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.
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 Asante Brescia in the Finance & Accounting sector and impact the bottomline 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.
Weighted SWOT Analysis of Asante Teaching Hospital: Activity-Based Costing 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 Asante Teaching Hospital: Activity-Based Costing 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 Asante Teaching Hospital: Activity-Based Costing 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 Asante Teaching Hospital: Activity-Based Costing 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 Asante Teaching Hospital: Activity-Based Costing 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 Asante Brescia needs to make to build a sustainable competitive advantage.