Case Study Description of Package Pricing at Mission Hospital
Mission Hospital started its operations on April 02, 2008 with the aim of providing highest quality patient care facilities to all individuals at affordable rates. This super specialty hospital located in Durgapur, West Bengal, India, specializes in cardiac surgeries. Many of its patients are from nearby states and neighboring countries, and are covered under different health schemes. Among hospitals in India, flat rate for different treatments is becoming popular, mainly owing to healthcare tourism and government schemes. Dr. Satyajit Bose, chairman of Mission Hospital, was considering adoption of a package pricing (flat fee) strategy under which patients would be provided a fixed price for their treatment at the time of admission. This would imply that the package price should be calculated by the hospital on the basis of patient's clinical and non-clinical information available at the time of admission. Flat fee (or package pricing) can result in a loss to the hospitals if they do not accurately estimate the treatment cost for a patient. The hospital faces the challenge of identifying the key factors that drive the total cost of treatment so that it can quote an appropriate price to the patient.
Swot Analysis of "Package Pricing at Mission Hospital" written by Sriram TK, Shailaja Grover, Satyabala Hariharan, Dinesh Kumar Unnikrishnan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hospital Package facing as an external strategic factors. Some of the topics covered in Package Pricing at Mission Hospital case study are - Strategic Management Strategies, Financial analysis, Pricing and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Package Pricing at Mission Hospital casestudy better are - – there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, increasing energy prices, geopolitical disruptions, central banks are concerned over increasing inflation,
technology disruption, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Package Pricing at Mission Hospital
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Package Pricing at Mission Hospital case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hospital Package, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hospital Package 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 Package Pricing at Mission Hospital can be done for the following purposes –
1. Strategic planning using facts provided in Package Pricing at Mission Hospital case study
2. Improving business portfolio management of Hospital Package
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 Hospital Package
Strengths Package Pricing at Mission Hospital | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hospital Package in Package Pricing at Mission Hospital Harvard Business Review case study are -
High brand equity
– Hospital Package has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hospital Package to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Hospital Package
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Hospital Package does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Hospital Package 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 Package Pricing at Mission Hospital - 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 Hospital Package in the sector have low bargaining power. Package Pricing at Mission Hospital has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hospital Package to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Leadership & Managing People field
– Hospital Package 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 Hospital Package in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Hospital Package is one of the leading recruiters in the industry. Managers in the Package Pricing at Mission Hospital are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Hospital Package 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 Hospital Package is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Package Pricing at Mission Hospital Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Hospital Package has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Package Pricing at Mission Hospital 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.
Innovation driven organization
– Hospital Package is one of the most innovative firm in sector. Manager in Package Pricing at Mission Hospital Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Hospital Package 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 Package Pricing at Mission Hospital HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Hospital Package in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Hospital Package has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hospital Package 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.
Weaknesses Package Pricing at Mission Hospital | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Package Pricing at Mission Hospital are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Hospital Package is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Package Pricing at Mission Hospital can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Hospital Package products
– To increase the profitability and margins on the products, Hospital Package 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, Hospital Package 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. Hospital Package 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 Hospital Package, firm in the HBR case study Package Pricing at Mission Hospital needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Package Pricing at Mission Hospital, in the dynamic environment Hospital Package has struggled to respond to the nimble upstart competition. Hospital Package 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, Hospital Package 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 star products
– The top 2 products and services of the firm as mentioned in the Package Pricing at Mission Hospital 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 Hospital Package has relatively successful track record of launching new products.
Products dominated business model
– Even though Hospital Package 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 - Package Pricing at Mission Hospital should strive to include more intangible value offerings along with its core products and services.
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 Hospital Package supply chain. Even after few cautionary changes mentioned in the HBR case study - Package Pricing at Mission Hospital, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hospital Package vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Hospital Package is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Hospital Package needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hospital Package to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Sriram TK, Shailaja Grover, Satyabala Hariharan, Dinesh Kumar Unnikrishnan suggests that, Hospital Package is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Opportunities Package Pricing at Mission Hospital | 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 Package Pricing at Mission Hospital are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hospital Package 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.
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. Hospital Package can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Hospital Package 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, Package Pricing at Mission Hospital, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Hospital Package 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.
Using analytics as competitive advantage
– Hospital Package 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 Package Pricing at Mission Hospital - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Hospital Package to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Hospital Package 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.
Developing new processes and practices
– Hospital Package 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.
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 Hospital Package in the consumer business. Now Hospital Package can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Hospital Package 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.
Creating value in data economy
– The success of analytics program of Hospital Package has opened avenues for new revenue streams for the organization in the industry. This can help Hospital Package to build a more holistic ecosystem as suggested in the Package Pricing at Mission Hospital case study. Hospital Package can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Hospital Package can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Hospital Package can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Building a culture of innovation
– managers at Hospital Package 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hospital Package can use these opportunities to build new business models that can help the communities that Hospital Package operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Threats Package Pricing at Mission Hospital External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Package Pricing at Mission Hospital are -
Stagnating economy with rate increase
– Hospital Package 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 dependence on third party suppliers
– Hospital Package 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.
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 Hospital Package.
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 Hospital Package business can come under increasing regulations regarding data privacy, data security, 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 Package Pricing at Mission Hospital, Hospital Package 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 .
Environmental challenges
– Hospital Package 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. Hospital Package 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 Hospital Package 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
– Hospital Package has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Hospital Package 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.
Shortening product life cycle
– it is one of the major threat that Hospital Package 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. Hospital Package 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.
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 Hospital Package in the Leadership & Managing People sector and impact the bottomline of the organization.
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.
Weighted SWOT Analysis of Package Pricing at Mission Hospital 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 Package Pricing at Mission Hospital 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 Package Pricing at Mission Hospital 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 Package Pricing at Mission Hospital 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 Package Pricing at Mission Hospital 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 Hospital Package needs to make to build a sustainable competitive advantage.