DaVita: A Community First, A Company Second SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of DaVita: A Community First, A Company Second
This case describes the challenges facing CEO Kent Thiry and DaVita as they being thinking about how to integrate a recent acquisition, Health Care Partners (HCP). DaVita had been primarily a kidney dialysis company with a very strong culture built around teamwork, fun, continuous improvement, accountability, and service. The senior management saw DaVita as "a community first and a company second." HCP was an integrated health care provider with a substantially different workforce from DaVita. The case describes the history of DaVita, its industry, its unique culture, and its success over the previous 15 years. It provides a detailed description of how the culture was developed and managed through the use of a series of processes and events including the careful use of language, symbols, and traditions (the company is a "village," team members are "citizens," the use of slogans such as "one for all and all for one," three musketeer costumes, wide sharing of information, involvement of team members, extensive recognition and reward programs, investment in training and socialization, and even a company song). This culture was a competitive advantage in DaVita's financial success by attracting and retaining staff and patients, maintaining control of costs, and improving clinical outcomes. The new challenge was whether this culture could, or should, be exported to Health Care Partners.
Authors :: Charles O'Reilly, Jeffrey Pfeffer, David Hoyt, Davina Drabkin
Swot Analysis of "DaVita: A Community First, A Company Second" written by Charles O'Reilly, Jeffrey Pfeffer, David Hoyt, Davina Drabkin includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Davita Hcp facing as an external strategic factors. Some of the topics covered in DaVita: A Community First, A Company Second case study are - Strategic Management Strategies, Human resource management, Mergers & acquisitions, Motivating people, Organizational culture and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the DaVita: A Community First, A Company Second casestudy better are - – talent flight as more people leaving formal jobs, wage bills are increasing, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, increasing transportation and logistics costs, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings,
increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of DaVita: A Community First, A Company Second
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in DaVita: A Community First, A Company Second case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Davita Hcp, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Davita Hcp 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 DaVita: A Community First, A Company Second can be done for the following purposes –
1. Strategic planning using facts provided in DaVita: A Community First, A Company Second case study
2. Improving business portfolio management of Davita Hcp
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Davita Hcp
Strengths DaVita: A Community First, A Company Second | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Davita Hcp in DaVita: A Community First, A Company Second Harvard Business Review case study are -
Innovation driven organization
– Davita Hcp is one of the most innovative firm in sector. Manager in DaVita: A Community First, A Company Second Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Davita Hcp in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Davita Hcp 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 Charles O'Reilly, Jeffrey Pfeffer, David Hoyt, Davina Drabkin 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.
Low bargaining power of suppliers
– Suppliers of Davita Hcp in the sector have low bargaining power. DaVita: A Community First, A Company Second has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Davita Hcp to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Davita Hcp is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Davita Hcp is one of the leading recruiters in the industry. Managers in the DaVita: A Community First, A Company Second 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
- Davita Hcp 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 Davita Hcp is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in DaVita: A Community First, A Company Second Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Davita Hcp has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Davita Hcp 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.
Diverse revenue streams
– Davita Hcp is present in almost all the verticals within the industry. This has provided firm in DaVita: A Community First, A Company Second 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.
Cross disciplinary teams
– Horizontal connected teams at the Davita Hcp 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– DaVita: A Community First, A Company Second firm has clearly differentiated products in the market place. This has enabled Davita Hcp to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Davita Hcp to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Davita Hcp 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 DaVita: A Community First, A Company Second HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses DaVita: A Community First, A Company Second | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of DaVita: A Community First, A Company Second are -
Need for greater diversity
– Davita Hcp has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
No frontier risks strategy
– After analyzing the HBR case study DaVita: A Community First, A Company Second, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Davita Hcp 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.
Products dominated business model
– Even though Davita Hcp 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 - DaVita: A Community First, A Company Second should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Davita Hcp 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.
Aligning sales with marketing
– It come across in the case study DaVita: A Community First, A Company Second 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 DaVita: A Community First, A Company Second can leverage the sales team experience to cultivate customer relationships as Davita Hcp is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Davita Hcp 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.
Increasing silos among functional specialists
– The organizational structure of Davita Hcp is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Davita Hcp needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Davita Hcp to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Davita Hcp 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.
Slow decision making process
– As mentioned earlier in the report, Davita Hcp 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. Davita Hcp 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 Davita Hcp products
– To increase the profitability and margins on the products, Davita Hcp needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities DaVita: A Community First, A Company Second | 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 DaVita: A Community First, A Company Second are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Davita Hcp is facing challenges because of the dominance of functional experts in the organization. DaVita: A Community First, A Company Second 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.
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 Davita Hcp in the consumer business. Now Davita Hcp can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Davita Hcp can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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 Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Davita Hcp 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. Davita Hcp 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Davita Hcp can use these opportunities to build new business models that can help the communities that Davita Hcp operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Davita Hcp 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, DaVita: A Community First, A Company Second, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Davita Hcp to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Davita Hcp can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Davita Hcp can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Davita Hcp can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. DaVita: A Community First, A Company Second 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.
Loyalty marketing
– Davita Hcp 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.
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. Davita Hcp can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Davita Hcp can develop new processes and procedures in Leadership & Managing People 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.
Threats DaVita: A Community First, A Company Second External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study DaVita: A Community First, A Company Second are -
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study DaVita: A Community First, A Company Second, Davita Hcp may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
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 Davita Hcp.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Davita Hcp in the Leadership & Managing People industry. The Leadership & Managing People 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.
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.
Consumer confidence and its impact on Davita Hcp 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.
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 Davita Hcp in the Leadership & Managing People sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Davita Hcp has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Davita Hcp needs to keep up with the evolution of technology in the Leadership & Managing People 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.
Regulatory challenges
– Davita Hcp 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 Leadership & Managing People industry regulations.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Davita Hcp can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Davita Hcp is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Davita Hcp with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Davita Hcp 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.
Weighted SWOT Analysis of DaVita: A Community First, A Company Second 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 DaVita: A Community First, A Company Second 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 DaVita: A Community First, A Company Second 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 DaVita: A Community First, A Company Second 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 DaVita: A Community First, A Company Second 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 Davita Hcp needs to make to build a sustainable competitive advantage.
