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 - – cloud computing is disrupting traditional business models, increasing commodity prices, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies,
supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, 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 -
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.
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.
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.
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.
High brand equity
– Pkuph Shan has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Pkuph Shan to keep acquiring new customers and building profitable relationship with both the new and loyal 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.
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.
Effective Research and Development (R&D)
– Pkuph Shan 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 Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Pkuph Shan in the sector have low bargaining power. Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Pkuph Shan to manage not only supply disruptions but also source products at highly competitive prices.
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.
Highly skilled collaborators
– Pkuph Shan 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 Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Pkuph Shan is one of the most innovative firm in sector. Manager in Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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 -
High cash cycle compare to competitors
Pkuph Shan 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.
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.
Slow decision making process
– As mentioned earlier in the report, Pkuph Shan 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. Pkuph Shan 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.
Low market penetration in new markets
– Outside its home market of Pkuph Shan, firm in the HBR case study Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform, it seems that the employees of Pkuph Shan don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
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.
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.
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.
Aligning sales with marketing
– It come across in the case study Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform 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 Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform can leverage the sales team experience to cultivate customer relationships as Pkuph Shan is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform, in the dynamic environment Pkuph Shan has struggled to respond to the nimble upstart competition. Pkuph Shan has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though Pkuph Shan 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 - Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform should strive to include more intangible value offerings along with its core products and services.
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 -
Building a culture of innovation
– managers at Pkuph Shan 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 Leadership & Managing People segment.
Manufacturing automation
– Pkuph Shan 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.
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.
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.
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 Pkuph Shan in the consumer business. Now Pkuph Shan can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Pkuph Shan 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 Peking University People's Hospital: An IT-Led Upgrading in the New Healthcare Reform - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Pkuph Shan to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
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.
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.
Developing new processes and practices
– Pkuph Shan 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Pkuph Shan can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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.
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 -
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.
Regulatory challenges
– Pkuph Shan 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.
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. Pkuph Shan 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.
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.
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 .
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.
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 Pkuph Shan in the Leadership & Managing People sector and impact the bottomline of the organization.
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.
Environmental challenges
– Pkuph Shan 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. Pkuph Shan can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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.
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.
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 Pkuph Shan.
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. Pkuph Shan can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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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