Consumer-Driven Health Care: Medtronic's Health Insurance Options SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Consumer-Driven Health Care: Medtronic's Health Insurance Options
Describes the variety of health insurance plans that Medtronic offers, including a high-deductible, consumer-driven health plan with a health reimbursement account that also enables health care providers to quote their own prices. Asks students to consider the choices facing the firm's human resources manager and its employees and the viability of the new consumer-driven models.
Authors :: Regina E. Herzlinger, Seth Bokser, John Hurwitch
Swot Analysis of "Consumer-Driven Health Care: Medtronic's Health Insurance Options" written by Regina E. Herzlinger, Seth Bokser, John Hurwitch includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Health Driven facing as an external strategic factors. Some of the topics covered in Consumer-Driven Health Care: Medtronic's Health Insurance Options case study are - Strategic Management Strategies, Decision making, Innovation, Personnel policies, Policy, Strategic planning and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Consumer-Driven Health Care: Medtronic's Health Insurance Options casestudy better are - – central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, technology disruption, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings,
there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Consumer-Driven Health Care: Medtronic's Health Insurance Options
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Consumer-Driven Health Care: Medtronic's Health Insurance Options case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Health Driven, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Health Driven 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 Consumer-Driven Health Care: Medtronic's Health Insurance Options can be done for the following purposes –
1. Strategic planning using facts provided in Consumer-Driven Health Care: Medtronic's Health Insurance Options case study
2. Improving business portfolio management of Health Driven
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 Health Driven
Strengths Consumer-Driven Health Care: Medtronic's Health Insurance Options | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Health Driven in Consumer-Driven Health Care: Medtronic's Health Insurance Options Harvard Business Review case study are -
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Health Driven digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Health Driven 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.
Diverse revenue streams
– Health Driven is present in almost all the verticals within the industry. This has provided firm in Consumer-Driven Health Care: Medtronic's Health Insurance Options 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
– Health Driven is one of the leading recruiters in the industry. Managers in the Consumer-Driven Health Care: Medtronic's Health Insurance Options are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management
– Health Driven 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 lead change in Leadership & Managing People field
– Health Driven is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Health Driven in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Health Driven 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 Regina E. Herzlinger, Seth Bokser, John Hurwitch 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 brand equity
– Health Driven has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Health Driven to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Health Driven 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.
Cross disciplinary teams
– Horizontal connected teams at the Health Driven 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.
Innovation driven organization
– Health Driven is one of the most innovative firm in sector. Manager in Consumer-Driven Health Care: Medtronic's Health Insurance Options Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the Consumer-Driven Health Care: Medtronic's Health Insurance Options 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.
Learning organization
- Health Driven 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 Health Driven is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Consumer-Driven Health Care: Medtronic's Health Insurance Options Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Consumer-Driven Health Care: Medtronic's Health Insurance Options | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Consumer-Driven Health Care: Medtronic's Health Insurance Options are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Consumer-Driven Health Care: Medtronic's Health Insurance Options, in the dynamic environment Health Driven has struggled to respond to the nimble upstart competition. Health Driven has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Health Driven 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.
Skills based hiring
– The stress on hiring functional specialists at Health Driven 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.
High cash cycle compare to competitors
Health Driven has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Products dominated business model
– Even though Health Driven 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 - Consumer-Driven Health Care: Medtronic's Health Insurance Options should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Consumer-Driven Health Care: Medtronic's Health Insurance Options, is just above the industry average. Health Driven 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 Health Driven is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Health Driven needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Health Driven to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Consumer-Driven Health Care: Medtronic's Health Insurance Options 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 Consumer-Driven Health Care: Medtronic's Health Insurance Options can leverage the sales team experience to cultivate customer relationships as Health Driven is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Health Driven, firm in the HBR case study Consumer-Driven Health Care: Medtronic's Health Insurance Options needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Consumer-Driven Health Care: Medtronic's Health Insurance Options 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 Health Driven has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study Consumer-Driven Health Care: Medtronic's Health Insurance Options 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 Health Driven 's lucrative customers.
Opportunities Consumer-Driven Health Care: Medtronic's Health Insurance Options | 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 Consumer-Driven Health Care: Medtronic's Health Insurance Options are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Health Driven 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 Health Driven to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Health Driven 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Health Driven 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, Consumer-Driven Health Care: Medtronic's Health Insurance Options, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Health Driven 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.
Leveraging digital technologies
– Health Driven 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.
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 Health Driven in the consumer business. Now Health Driven can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Health Driven is facing challenges because of the dominance of functional experts in the organization. Consumer-Driven Health Care: Medtronic's Health Insurance Options 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.
Better consumer reach
– The expansion of the 5G network will help Health Driven to increase its market reach. Health Driven 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Health Driven 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.
Creating value in data economy
– The success of analytics program of Health Driven has opened avenues for new revenue streams for the organization in the industry. This can help Health Driven to build a more holistic ecosystem as suggested in the Consumer-Driven Health Care: Medtronic's Health Insurance Options case study. Health Driven can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Health Driven 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 Consumer-Driven Health Care: Medtronic's Health Insurance Options - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Health Driven to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Health Driven 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.
Learning at scale
– Online learning technologies has now opened space for Health Driven 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.
Threats Consumer-Driven Health Care: Medtronic's Health Insurance Options External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Consumer-Driven Health Care: Medtronic's Health Insurance Options are -
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. Health Driven can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Health Driven 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. Health Driven can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Health Driven 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 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.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Health Driven business can come under increasing regulations regarding data privacy, data security, etc.
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. Health Driven needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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.
Regulatory challenges
– Health Driven 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.
Shortening product life cycle
– it is one of the major threat that Health Driven is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Health Driven 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 Consumer-Driven Health Care: Medtronic's Health Insurance Options .
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. Health Driven 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 Consumer-Driven Health Care: Medtronic's Health Insurance Options, Health Driven 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 acceleration in Forth Industrial Revolution
– Health Driven has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Health Driven 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.
Weighted SWOT Analysis of Consumer-Driven Health Care: Medtronic's Health Insurance Options 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 Consumer-Driven Health Care: Medtronic's Health Insurance Options 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 Consumer-Driven Health Care: Medtronic's Health Insurance Options 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 Consumer-Driven Health Care: Medtronic's Health Insurance Options 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 Consumer-Driven Health Care: Medtronic's Health Insurance Options 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 Health Driven needs to make to build a sustainable competitive advantage.