Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform
In 2006, Dr. WANG Shan was appointed as the president of Peking University People's Hospital (hereafter referred to as "PKUPH"), a large class 3A public hospital in China. Prior to his appointment, PKUPH had experienced three consecutive years of financial losses due to poor internal management. No standard operating procedure was established to prescribe the level of activity expected from each responsible person or decision units, and the amount of resources that a responsible party should use in achieving that level of activity. No formal management control systems were installed to collect, process, analyse accounting (particularly cost-related) information and provide timely feedback to the management. As a result, actual costs significantly exceeded budget. Loopholes in the system stemming from loose monitoring and control gave rise to severe agency problems. To turn the situation around, WANG Shan launched an IT-led management reform. By 2012, the reform has yielded significant and positive results. Annual revenues and profits increased significantly. Management and operational efficiency was also significantly enhanced. This case is intended to demonstrate how an institutionally complex organization (particularly hospitals) can overcome institutional challenges and upgrade management with an IT-oriented strategy.
Authors :: F. McFarlan, Ning Jia, Weiqi Liu, Hong Zhang
Swot Analysis of "Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform" written by F. McFarlan, Ning Jia, Weiqi Liu, Hong Zhang includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Pkuph Shan facing as an external strategic factors. Some of the topics covered in Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform case study are - Strategic Management Strategies, and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform casestudy better are - – increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation, increasing energy prices, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , there is backlash against globalization,
increasing government debt because of Covid-19 spendings, geopolitical disruptions, etc
Introduction to SWOT Analysis of Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Pkuph Shan, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Pkuph Shan 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 Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform can be done for the following purposes –
1. Strategic planning using facts provided in Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform case study
2. Improving business portfolio management of Pkuph Shan
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 Pkuph Shan
Strengths Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Pkuph Shan in Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform Harvard Business Review case study are -
Learning organization
- Pkuph Shan 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 Pkuph Shan is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Pkuph Shan
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Pkuph Shan does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Pkuph Shan 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Pkuph Shan digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Pkuph Shan 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.
Analytics focus
– Pkuph Shan 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 F. McFarlan, Ning Jia, Weiqi Liu, Hong Zhang 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.
Training and development
– Pkuph Shan has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform 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.
Strong track record of project management
– Pkuph Shan is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy in the Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform 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.
High switching costs
– The high switching costs that Pkuph Shan 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.
Diverse revenue streams
– Pkuph Shan is present in almost all the verticals within the industry. This has provided firm in Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform 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.
Ability to recruit top talent
– Pkuph Shan is one of the leading recruiters in the industry. Managers in the Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Leadership & Managing People industry
– Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform firm has clearly differentiated products in the market place. This has enabled Pkuph Shan to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Pkuph Shan to invest into research and development (R&D) and innovation.
Weaknesses Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform are -
Slow to strategic competitive environment developments
– As Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform HBR case study mentions - Pkuph Shan 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.
Interest costs
– Compare to the competition, Pkuph Shan 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.
Need for greater diversity
– Pkuph Shan 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 Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform, 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, Pkuph Shan 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform, is just above the industry average. Pkuph Shan 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.
Increasing silos among functional specialists
– The organizational structure of Pkuph Shan is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Pkuph Shan needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Pkuph Shan to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform 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 Pkuph Shan 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform 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 Pkuph Shan has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Pkuph Shan 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.
Lack of clear differentiation of Pkuph Shan products
– To increase the profitability and margins on the products, Pkuph Shan needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform | 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 Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform are -
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. Pkuph Shan can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Pkuph Shan 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.
Creating value in data economy
– The success of analytics program of Pkuph Shan has opened avenues for new revenue streams for the organization in the industry. This can help Pkuph Shan to build a more holistic ecosystem as suggested in the Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform case study. Pkuph Shan can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Pkuph Shan can use these opportunities to build new business models that can help the communities that Pkuph Shan operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Pkuph Shan to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Pkuph Shan to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Pkuph Shan can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform 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.
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. Pkuph Shan can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Pkuph Shan 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Pkuph Shan in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Pkuph Shan to increase its market reach. Pkuph Shan 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Pkuph Shan 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, Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform, 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 Pkuph Shan 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.
Loyalty marketing
– Pkuph Shan 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.
Threats Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform are -
Stagnating economy with rate increase
– Pkuph Shan 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. Pkuph Shan needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Pkuph Shan 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.
Technology acceleration in Forth Industrial Revolution
– Pkuph Shan has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Pkuph Shan 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Pkuph Shan 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 Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform .
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.
Increasing wage structure of Pkuph Shan
– 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 Pkuph Shan.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Pkuph Shan with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Pkuph Shan 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.
Shortening product life cycle
– it is one of the major threat that Pkuph Shan is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Pkuph Shan 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform, Pkuph Shan 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 .
Weighted SWOT Analysis of Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform 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 Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform 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 Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform 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 Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform 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 Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform 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 Pkuph Shan needs to make to build a sustainable competitive advantage.
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