Healthcare Reform and its Implications for the U.S. Economy SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Healthcare Reform and its Implications for the U.S. Economy
U.S. healthcare is currently a poor value proposition in relation to its cost. This must change. Driven by the fundamental forces of financing, consumer preferences, and technology, the U.S. is heading for a profound revolution in healthcare, one that will affect not only the system itself but also the larger U.S. business community. This new healthcare system will create vast opportunities and commensurately large risks for healthcare innovators. The outcomes of the present healthcare reform debate will either liberate or further shackle these innovators. Reforms that depend on governmental controls are more likely to dampen innovation than those achieved through control by consumers, and given the profound ramifications of healthcare reform outcomes, policy makers would be well-advised to harness the forces of consumerism in fashioning reform.
Swot Analysis of "Healthcare Reform and its Implications for the U.S. Economy" written by Regina E. Herzlinger includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Healthcare Reform facing as an external strategic factors. Some of the topics covered in Healthcare Reform and its Implications for the U.S. Economy case study are - Strategic Management Strategies, Personnel policies, Transparency and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Healthcare Reform and its Implications for the U.S. Economy casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, there is increasing trade war between United States & China, increasing energy prices, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%,
talent flight as more people leaving formal jobs, there is backlash against globalization, etc
Introduction to SWOT Analysis of Healthcare Reform and its Implications for the U.S. Economy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Healthcare Reform and its Implications for the U.S. Economy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Healthcare Reform, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Healthcare Reform 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 Healthcare Reform and its Implications for the U.S. Economy can be done for the following purposes –
1. Strategic planning using facts provided in Healthcare Reform and its Implications for the U.S. Economy case study
2. Improving business portfolio management of Healthcare Reform
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 Healthcare Reform
Strengths Healthcare Reform and its Implications for the U.S. Economy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Healthcare Reform in Healthcare Reform and its Implications for the U.S. Economy Harvard Business Review case study are -
Successful track record of launching new products
– Healthcare Reform has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Healthcare Reform 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.
Ability to lead change in Innovation & Entrepreneurship field
– Healthcare Reform 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 Reform in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Healthcare Reform 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 Regina E. Herzlinger 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.
High switching costs
– The high switching costs that Healthcare Reform 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.
Operational resilience
– The operational resilience strategy in the Healthcare Reform and its Implications for the U.S. Economy 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
– Healthcare Reform is present in almost all the verticals within the industry. This has provided firm in Healthcare Reform and its Implications for the U.S. Economy 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.
Training and development
– Healthcare Reform has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Healthcare Reform and its Implications for the U.S. Economy 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.
Innovation driven organization
– Healthcare Reform is one of the most innovative firm in sector. Manager in Healthcare Reform and its Implications for the U.S. Economy Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Healthcare Reform 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 Healthcare Reform is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Healthcare Reform and its Implications for the U.S. Economy Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Healthcare Reform is one of the leading recruiters in the industry. Managers in the Healthcare Reform and its Implications for the U.S. Economy are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Healthcare Reform in the sector have low bargaining power. Healthcare Reform and its Implications for the U.S. Economy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Healthcare Reform to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Healthcare Reform digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Healthcare Reform 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 Healthcare Reform and its Implications for the U.S. Economy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Healthcare Reform and its Implications for the U.S. Economy are -
High operating costs
– Compare to the competitors, firm in the HBR case study Healthcare Reform and its Implications for the U.S. Economy 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 Healthcare Reform 's lucrative customers.
High cash cycle compare to competitors
Healthcare Reform has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Healthcare Reform and its Implications for the U.S. Economy, it seems that the employees of Healthcare Reform 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Healthcare Reform and its Implications for the U.S. Economy, in the dynamic environment Healthcare Reform has struggled to respond to the nimble upstart competition. Healthcare Reform has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Healthcare Reform 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.
Interest costs
– Compare to the competition, Healthcare Reform 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Healthcare Reform needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Low market penetration in new markets
– Outside its home market of Healthcare Reform, firm in the HBR case study Healthcare Reform and its Implications for the U.S. Economy needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Regina E. Herzlinger suggests that, Healthcare Reform 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Healthcare Reform and its Implications for the U.S. Economy, is just above the industry average. Healthcare Reform 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.
Skills based hiring
– The stress on hiring functional specialists at Healthcare Reform 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.
Opportunities Healthcare Reform and its Implications for the U.S. Economy | 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 Healthcare Reform and its Implications for the U.S. Economy are -
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. Healthcare Reform can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Reform can use these opportunities to build new business models that can help the communities that Healthcare Reform operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Healthcare Reform can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Healthcare Reform can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Healthcare Reform in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
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 Reform in the consumer business. Now Healthcare Reform can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Healthcare Reform 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.
Using analytics as competitive advantage
– Healthcare Reform 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 Healthcare Reform and its Implications for the U.S. Economy - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Healthcare Reform to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Healthcare Reform 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.
Better consumer reach
– The expansion of the 5G network will help Healthcare Reform to increase its market reach. Healthcare Reform 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
– Healthcare Reform 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, Healthcare Reform 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, Healthcare Reform and its Implications for the U.S. Economy, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Healthcare Reform 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.
Threats Healthcare Reform and its Implications for the U.S. Economy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Healthcare Reform and its Implications for the U.S. Economy are -
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 Healthcare Reform in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Healthcare Reform 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 Healthcare Reform and its Implications for the U.S. Economy .
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 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.
Stagnating economy with rate increase
– Healthcare Reform 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.
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. Healthcare Reform needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Healthcare Reform and its Implications for the U.S. Economy, Healthcare Reform may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
Environmental challenges
– Healthcare Reform 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 Reform can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Healthcare Reform 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 Healthcare Reform 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
– Healthcare Reform has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Healthcare Reform 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Healthcare Reform 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 Healthcare Reform
– 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 Healthcare Reform.
Weighted SWOT Analysis of Healthcare Reform and its Implications for the U.S. Economy 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 Healthcare Reform and its Implications for the U.S. Economy 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 Healthcare Reform and its Implications for the U.S. Economy 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 Healthcare Reform and its Implications for the U.S. Economy 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 Healthcare Reform and its Implications for the U.S. Economy 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 Reform needs to make to build a sustainable competitive advantage.