Fuda Cancer Hospital - Development of Private Hospitals in China SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Fuda Cancer Hospital - Development of Private Hospitals in China
Fuda Cancer Hospital is an early private entrant, specialized cancer hospital in China. Since its establishment 11 years ago, it has grown from a little-known private hospital to a well-known, specialized cancer hospital that has nearly 400 beds and attracts patients from more than 70 countries and regions. As China's healthcare care has long been dominated by public hospitals, Fuda Cancer Hospital was able to survive and grow by pursuing a differentiation-oriented strategy and a modern hospital management system. The hospital adheres to the strategy of "differentiated development" in the following aspects: Patient positioning - therapy of cancer in middle and advanced stage; Market positioning - Mainly overseas cancer patients in early stage Service; concept positioning - patient-centered, etc. To further expand operation, Fuda Cancer Hospital started to make preparations for IPO in 2011, planning to use the raised funds for hospital relocation and technical reform projects, scientific research and training center construction projects, and brand and market system restructuring projects. However, the hospital is faced with numerous setbacks in its endeavor to go public. From 2011 to 2013, the net revenue of the hospital has been declining, with a decrease of 47.80% in 2013. The cancer therapy, which the hospital is proud of, is challenged in the industry as it brings a negative impact on the IPO of the company. Moreover, since the national government has lifted policy restrictions on private capital in the medical market, many listed companies have invested in private hospitals, and Fuda Cancer Hospital will be confronted with fiercer competition. However, China's IPO market was frozen for nearly two years and Fuda experienced major roadblocks in its IPO journey.
Swot Analysis of "Fuda Cancer Hospital - Development of Private Hospitals in China" written by Ning Jia, Weiqi Liu, Chengwen Li includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Fuda Hospital facing as an external strategic factors. Some of the topics covered in Fuda Cancer Hospital - Development of Private Hospitals in China case study are - Strategic Management Strategies, IPO and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Fuda Cancer Hospital - Development of Private Hospitals in China casestudy better are - – increasing energy prices, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion,
increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Fuda Cancer Hospital - Development of Private Hospitals in China
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Fuda Cancer Hospital - Development of Private Hospitals in China case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fuda Hospital, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fuda Hospital 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 Fuda Cancer Hospital - Development of Private Hospitals in China can be done for the following purposes –
1. Strategic planning using facts provided in Fuda Cancer Hospital - Development of Private Hospitals in China case study
2. Improving business portfolio management of Fuda Hospital
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 Fuda Hospital
Strengths Fuda Cancer Hospital - Development of Private Hospitals in China | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Fuda Hospital in Fuda Cancer Hospital - Development of Private Hospitals in China Harvard Business Review case study are -
Learning organization
- Fuda Hospital 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 Fuda Hospital is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Fuda Cancer Hospital - Development of Private Hospitals in China Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Fuda Hospital has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Fuda Hospital 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.
High switching costs
– The high switching costs that Fuda Hospital 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.
Superior customer experience
– The customer experience strategy of Fuda Hospital in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Fuda Hospital 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 Fuda Cancer Hospital - Development of Private Hospitals in China - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Fuda Hospital 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 Fuda Cancer Hospital - Development of Private Hospitals in China HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Fuda Cancer Hospital - Development of Private Hospitals in China firm has clearly differentiated products in the market place. This has enabled Fuda Hospital to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Fuda Hospital to invest into research and development (R&D) and innovation.
High brand equity
– Fuda Hospital has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Fuda Hospital to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Innovation & Entrepreneurship field
– Fuda Hospital 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 Fuda Hospital in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Fuda Hospital is one of the leading recruiters in the industry. Managers in the Fuda Cancer Hospital - Development of Private Hospitals in China are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Fuda Hospital digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Fuda Hospital 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.
Innovation driven organization
– Fuda Hospital is one of the most innovative firm in sector. Manager in Fuda Cancer Hospital - Development of Private Hospitals in China Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Fuda Cancer Hospital - Development of Private Hospitals in China | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Fuda Cancer Hospital - Development of Private Hospitals in China are -
Aligning sales with marketing
– It come across in the case study Fuda Cancer Hospital - Development of Private Hospitals in China 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 Fuda Cancer Hospital - Development of Private Hospitals in China can leverage the sales team experience to cultivate customer relationships as Fuda Hospital is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Fuda Hospital, firm in the HBR case study Fuda Cancer Hospital - Development of Private Hospitals in China needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Fuda Cancer Hospital - Development of Private Hospitals in China 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 Fuda Hospital has relatively successful track record of launching new products.
High cash cycle compare to competitors
Fuda Hospital 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.
Products dominated business model
– Even though Fuda Hospital has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Fuda Cancer Hospital - Development of Private Hospitals in China should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Fuda Cancer Hospital - Development of Private Hospitals in China, in the dynamic environment Fuda Hospital has struggled to respond to the nimble upstart competition. Fuda Hospital has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners
– Because of the regulatory requirements, Ning Jia, Weiqi Liu, Chengwen Li suggests that, Fuda Hospital 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 operating costs
– Compare to the competitors, firm in the HBR case study Fuda Cancer Hospital - Development of Private Hospitals in China 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 Fuda Hospital 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Fuda Hospital is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Fuda Hospital needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Fuda Hospital to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Fuda Hospital products
– To increase the profitability and margins on the products, Fuda Hospital needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Fuda Hospital 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.
Opportunities Fuda Cancer Hospital - Development of Private Hospitals in China | 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 Fuda Cancer Hospital - Development of Private Hospitals in China are -
Creating value in data economy
– The success of analytics program of Fuda Hospital has opened avenues for new revenue streams for the organization in the industry. This can help Fuda Hospital to build a more holistic ecosystem as suggested in the Fuda Cancer Hospital - Development of Private Hospitals in China case study. Fuda Hospital can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Fuda Hospital can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Fuda Cancer Hospital - Development of Private Hospitals in China suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
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. Fuda Hospital 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. Fuda Hospital 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. Fuda Hospital can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Fuda Hospital can use these opportunities to build new business models that can help the communities that Fuda Hospital operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Using analytics as competitive advantage
– Fuda Hospital 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 Fuda Cancer Hospital - Development of Private Hospitals in China - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Fuda Hospital to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Fuda Hospital can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Fuda Hospital 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Fuda Hospital 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, Fuda Cancer Hospital - Development of Private Hospitals in China, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Fuda Hospital 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Fuda Hospital can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Fuda Hospital 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.
Leveraging digital technologies
– Fuda Hospital 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.
Threats Fuda Cancer Hospital - Development of Private Hospitals in China External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Fuda Cancer Hospital - Development of Private Hospitals in China are -
Shortening product life cycle
– it is one of the major threat that Fuda Hospital is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Fuda Hospital 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.
Increasing wage structure of Fuda Hospital
– 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 Fuda Hospital.
High dependence on third party suppliers
– Fuda Hospital 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.
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. Fuda Hospital 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
– Fuda Hospital 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. Fuda Hospital can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Technology acceleration in Forth Industrial Revolution
– Fuda Hospital has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Fuda Hospital 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.
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. Fuda Hospital can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Fuda Hospital.
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. Fuda Hospital needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Fuda Hospital with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Fuda Hospital 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 Fuda Cancer Hospital - Development of Private Hospitals in China .
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.
Weighted SWOT Analysis of Fuda Cancer Hospital - Development of Private Hospitals in China 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 Fuda Cancer Hospital - Development of Private Hospitals in China 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 Fuda Cancer Hospital - Development of Private Hospitals in China 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 Fuda Cancer Hospital - Development of Private Hospitals in China 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 Fuda Cancer Hospital - Development of Private Hospitals in China 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 Fuda Hospital needs to make to build a sustainable competitive advantage.
