Liberty Medical Group (Condensed) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Liberty Medical Group (Condensed)
Richard Townsend has recently been elected CEO of Liberty Medical Foundation (LMF), a nonprofit HMO. Due in part to a rapidly changing competitive environment, LMF has faced serious financial problems over the past two years. Confounding the problem are low morale among physicians and staff and declining patient satisfaction. Townsend will present to the board of directors the two strategic choices that he sees for keeping LMF alive. One choice involves LMF regaining its low-cost position that originally attracted so many of its members. LMF's low-cost, high-efficiency positioning has historically been its competitive advantage. Regaining the low-cost position would mean implementing prior authorization requirements, drastically cutting the number of physicians and staff, and copying other cost savings measures that for-profit HMOs use. The other option is to change radically LMF's positioning so that it is the quality and service leader. This option assumes that customers will be willing to pay a premium for excellent service. Either option will require drastic changes to LMF's culture.
Authors :: David Caldwell, Robert Pearl, Davina Drabkin, Charles A. O'Reilly
Swot Analysis of "Liberty Medical Group (Condensed)" written by David Caldwell, Robert Pearl, Davina Drabkin, Charles A. O'Reilly includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Lmf Lmf's facing as an external strategic factors. Some of the topics covered in Liberty Medical Group (Condensed) case study are - Strategic Management Strategies, Leadership, Organizational culture, Strategic planning and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Liberty Medical Group (Condensed) casestudy better are - – digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, central banks are concerned over increasing inflation, increasing household debt because of falling income levels, geopolitical disruptions, increasing commodity prices, increasing government debt because of Covid-19 spendings,
competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Liberty Medical Group (Condensed)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Liberty Medical Group (Condensed) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Lmf Lmf's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Lmf Lmf's 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 Liberty Medical Group (Condensed) can be done for the following purposes –
1. Strategic planning using facts provided in Liberty Medical Group (Condensed) case study
2. Improving business portfolio management of Lmf Lmf's
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 Lmf Lmf's
Strengths Liberty Medical Group (Condensed) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Lmf Lmf's in Liberty Medical Group (Condensed) Harvard Business Review case study are -
Learning organization
- Lmf Lmf's 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 Lmf Lmf's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Liberty Medical Group (Condensed) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Lmf Lmf's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Lmf Lmf's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Lmf Lmf's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Liberty Medical Group (Condensed) 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.
Successful track record of launching new products
– Lmf Lmf's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Lmf Lmf's 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.
Operational resilience
– The operational resilience strategy in the Liberty Medical Group (Condensed) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Cross disciplinary teams
– Horizontal connected teams at the Lmf Lmf's 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.
Superior customer experience
– The customer experience strategy of Lmf Lmf's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Lmf Lmf's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Lmf Lmf's 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.
High switching costs
– The high switching costs that Lmf Lmf's 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.
Strong track record of project management
– Lmf Lmf's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Leadership & Managing People industry
– Liberty Medical Group (Condensed) firm has clearly differentiated products in the market place. This has enabled Lmf Lmf's to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Lmf Lmf's to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Lmf Lmf's 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 Liberty Medical Group (Condensed) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Liberty Medical Group (Condensed) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Liberty Medical Group (Condensed) are -
Slow to strategic competitive environment developments
– As Liberty Medical Group (Condensed) HBR case study mentions - Lmf Lmf's 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 Lmf Lmf's is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Lmf Lmf's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Lmf Lmf's to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Lmf Lmf's has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High 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 Lmf Lmf's supply chain. Even after few cautionary changes mentioned in the HBR case study - Liberty Medical Group (Condensed), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Lmf Lmf's vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study Liberty Medical Group (Condensed) 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 Lmf Lmf's 's lucrative customers.
Skills based hiring
– The stress on hiring functional specialists at Lmf Lmf's 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.
No frontier risks strategy
– After analyzing the HBR case study Liberty Medical Group (Condensed), 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Liberty Medical Group (Condensed) 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 Lmf Lmf's has relatively successful track record of launching new products.
High cash cycle compare to competitors
Lmf Lmf's 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.
Lack of clear differentiation of Lmf Lmf's products
– To increase the profitability and margins on the products, Lmf Lmf's needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Lmf Lmf's 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. Lmf Lmf's 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.
Opportunities Liberty Medical Group (Condensed) | 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 Liberty Medical Group (Condensed) are -
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 Lmf Lmf's in the consumer business. Now Lmf Lmf's can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Lmf Lmf's 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 Liberty Medical Group (Condensed) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Lmf Lmf's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Lmf Lmf's 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, Liberty Medical Group (Condensed), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Lmf Lmf's 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, Lmf Lmf's can use these opportunities to build new business models that can help the communities that Lmf Lmf's operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Creating value in data economy
– The success of analytics program of Lmf Lmf's has opened avenues for new revenue streams for the organization in the industry. This can help Lmf Lmf's to build a more holistic ecosystem as suggested in the Liberty Medical Group (Condensed) case study. Lmf Lmf's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Lmf Lmf's 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.
Manufacturing automation
– Lmf Lmf's 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Lmf Lmf's 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.
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. Lmf Lmf's 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 Lmf Lmf's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Lmf Lmf's 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.
Buying journey improvements
– Lmf Lmf's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Liberty Medical Group (Condensed) 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.
Threats Liberty Medical Group (Condensed) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Liberty Medical Group (Condensed) are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Lmf Lmf's 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 Liberty Medical Group (Condensed) .
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. Lmf Lmf's needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Increasing wage structure of Lmf Lmf's
– 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 Lmf Lmf's.
High dependence on third party suppliers
– Lmf Lmf's 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Lmf Lmf's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Lmf Lmf's.
Environmental challenges
– Lmf Lmf's 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. Lmf Lmf's can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Shortening product life cycle
– it is one of the major threat that Lmf Lmf's is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Lmf Lmf's 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Liberty Medical Group (Condensed), Lmf Lmf's 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 .
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.
Consumer confidence and its impact on Lmf Lmf's 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.
Stagnating economy with rate increase
– Lmf Lmf's 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.
Weighted SWOT Analysis of Liberty Medical Group (Condensed) 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 Liberty Medical Group (Condensed) 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 Liberty Medical Group (Condensed) 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 Liberty Medical Group (Condensed) 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 Liberty Medical Group (Condensed) 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 Lmf Lmf's needs to make to build a sustainable competitive advantage.
