Case Study Description of Lowell General Physician Hospital Organization
This case focuses on the Alternative Quality Contract (AQC), a novel payment program designed to incentivize providers to deliver less costly, high quality health care. Under the AQC, offered by Blue Cross Blue Shield of Massachusetts, providers received a fixed-dollar budget to cover all care provided to a specific patient population, as well as incentive payments for quality. The AQC was piloted in 2009 by a handful of provider organizations, including a group of physicians belonging to the Lowell General Physician Hospital Organization (LGPHO). The case describes the LGPHO physicians' experience during their first two years under the AQC, allowing students to assess the group's performance as well as potential challenges in the remaining three years of the contract and future contracts and the AQC's value as part of the solution to untenably high U.S. health care costs.
Swot Analysis of "Lowell General Physician Hospital Organization" written by Richard M. J. Bohmer, Natalie Kindred includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Aqc Lgpho facing as an external strategic factors. Some of the topics covered in Lowell General Physician Hospital Organization case study are - Strategic Management Strategies, Costs, Health, Innovation, Personnel policies, Supply chain and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Lowell General Physician Hospital Organization casestudy better are - – digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies,
increasing commodity prices, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Lowell General Physician Hospital Organization
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Lowell General Physician Hospital Organization case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Aqc Lgpho, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Aqc Lgpho 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 Lowell General Physician Hospital Organization can be done for the following purposes –
1. Strategic planning using facts provided in Lowell General Physician Hospital Organization case study
2. Improving business portfolio management of Aqc Lgpho
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Aqc Lgpho
Strengths Lowell General Physician Hospital Organization | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Aqc Lgpho in Lowell General Physician Hospital Organization Harvard Business Review case study are -
High brand equity
– Aqc Lgpho has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Aqc Lgpho to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Aqc Lgpho 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 Lowell General Physician Hospital Organization - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Aqc Lgpho has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Lowell General Physician Hospital Organization 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 Innovation & Entrepreneurship field
– Aqc Lgpho 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 Aqc Lgpho in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Aqc Lgpho in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Aqc Lgpho 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 Lowell General Physician Hospital Organization HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Aqc Lgpho is present in almost all the verticals within the industry. This has provided firm in Lowell General Physician Hospital Organization 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.
Low bargaining power of suppliers
– Suppliers of Aqc Lgpho in the sector have low bargaining power. Lowell General Physician Hospital Organization has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Aqc Lgpho to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Aqc Lgpho is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Aqc Lgpho 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 M. J. 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.
Operational resilience
– The operational resilience strategy in the Lowell General Physician Hospital Organization 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.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Aqc Lgpho digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Aqc Lgpho 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.
Weaknesses Lowell General Physician Hospital Organization | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Lowell General Physician Hospital Organization are -
Aligning sales with marketing
– It come across in the case study Lowell General Physician Hospital Organization 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 Lowell General Physician Hospital Organization can leverage the sales team experience to cultivate customer relationships as Aqc Lgpho is planning to shift buying processes online.
Interest costs
– Compare to the competition, Aqc Lgpho 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.
Slow to strategic competitive environment developments
– As Lowell General Physician Hospital Organization HBR case study mentions - Aqc Lgpho 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.
Increasing silos among functional specialists
– The organizational structure of Aqc Lgpho is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Aqc Lgpho needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Aqc Lgpho to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Aqc Lgpho 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Lowell General Physician Hospital Organization 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 Aqc Lgpho has relatively successful track record of launching new products.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Aqc Lgpho supply chain. Even after few cautionary changes mentioned in the HBR case study - Lowell General Physician Hospital Organization, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Aqc Lgpho vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Aqc Lgpho 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Lowell General Physician Hospital Organization, in the dynamic environment Aqc Lgpho has struggled to respond to the nimble upstart competition. Aqc Lgpho has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study Lowell General Physician Hospital Organization 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 Aqc Lgpho 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Lowell General Physician Hospital Organization, is just above the industry average. Aqc Lgpho 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.
Opportunities Lowell General Physician Hospital Organization | 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 Lowell General Physician Hospital Organization are -
Manufacturing automation
– Aqc Lgpho can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship 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.
Developing new processes and practices
– Aqc Lgpho can develop new processes and procedures in Innovation & Entrepreneurship 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.
Leveraging digital technologies
– Aqc Lgpho 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.
Building a culture of innovation
– managers at Aqc Lgpho 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 Innovation & Entrepreneurship segment.
Creating value in data economy
– The success of analytics program of Aqc Lgpho has opened avenues for new revenue streams for the organization in the industry. This can help Aqc Lgpho to build a more holistic ecosystem as suggested in the Lowell General Physician Hospital Organization case study. Aqc Lgpho can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Aqc Lgpho can use these opportunities to build new business models that can help the communities that Aqc Lgpho operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Aqc Lgpho 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.
Better consumer reach
– The expansion of the 5G network will help Aqc Lgpho to increase its market reach. Aqc Lgpho will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Aqc Lgpho can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Aqc Lgpho 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 Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Aqc Lgpho 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. Aqc Lgpho 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.
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. Aqc Lgpho can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Aqc Lgpho 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, Lowell General Physician Hospital Organization, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Lowell General Physician Hospital Organization External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Lowell General Physician Hospital Organization are -
Stagnating economy with rate increase
– Aqc Lgpho 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.
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.
Regulatory challenges
– Aqc Lgpho 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 Innovation & Entrepreneurship industry regulations.
Consumer confidence and its impact on Aqc Lgpho 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
– Aqc Lgpho 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 Aqc Lgpho business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Aqc Lgpho with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Aqc Lgpho
– 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 Aqc Lgpho.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Aqc Lgpho 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 Lowell General Physician Hospital Organization .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Aqc Lgpho in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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.
Technology acceleration in Forth Industrial Revolution
– Aqc Lgpho has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Aqc Lgpho needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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.
Shortening product life cycle
– it is one of the major threat that Aqc Lgpho is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Aqc Lgpho 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. Aqc Lgpho can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Weighted SWOT Analysis of Lowell General Physician Hospital Organization 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 Lowell General Physician Hospital Organization 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 Lowell General Physician Hospital Organization 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 Lowell General Physician Hospital Organization 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 Lowell General Physician Hospital Organization 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 Aqc Lgpho needs to make to build a sustainable competitive advantage.
