Case Study Description of Acibadem Healthcare Group
This case focuses on AcA?badem Healthcare Group's, Turkey's only premium nationwide hospital network, potential expansion strategies after it was acquired by International Healthcare Holdings Berhad (IHH) in 2011, the world's second-largest publicly listed health care group and a private hospital leader in Singapore and Malaysia. By providing perspectives on both AcA?badem and IHH-Parkway-Pantai's operational models, growth aspirations, collaboration and synergies, as well as cultural and operational differences, the case allows students to discuss which expansion strategies would be best suited for AcA?badem's operations--which geographic regions should initially be targeted, what business model is best suited for AcA?badem's growth (specialized chain, public-partnership etc.) Also, students are encouraged to discuss how AcA?badem should leverage its relationship with IHH and collaborate with Parkway-Pantai.
Authors :: Regina E. Herzlinger, Esel Cekin, Natalie Kindred, Gamze Yucaoglu
Swot Analysis of "Acibadem Healthcare Group" written by Regina E. Herzlinger, Esel Cekin, Natalie Kindred, Gamze Yucaoglu includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Aca Badem facing as an external strategic factors. Some of the topics covered in Acibadem Healthcare Group case study are - Strategic Management Strategies, and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Acibadem Healthcare Group casestudy better are - – digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, there is backlash against globalization, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%,
increasing commodity prices, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Acibadem Healthcare Group
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Acibadem Healthcare Group case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Aca Badem, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Aca Badem 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 Acibadem Healthcare Group can be done for the following purposes –
1. Strategic planning using facts provided in Acibadem Healthcare Group case study
2. Improving business portfolio management of Aca Badem
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 Aca Badem
Strengths Acibadem Healthcare Group | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Aca Badem in Acibadem Healthcare Group Harvard Business Review case study are -
Strong track record of project management
– Aca Badem is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Aca Badem is one of the most innovative firm in sector. Manager in Acibadem Healthcare Group Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Leadership & Managing People industry
– Acibadem Healthcare Group firm has clearly differentiated products in the market place. This has enabled Aca Badem to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Aca Badem to invest into research and development (R&D) and innovation.
Ability to lead change in Leadership & Managing People field
– Aca Badem 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 Aca Badem in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Aca Badem has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Aca Badem to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Aca Badem 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 Aca Badem is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Acibadem Healthcare Group Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Aca Badem 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 Acibadem Healthcare Group - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy in the Acibadem Healthcare Group 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.
Analytics focus
– Aca Badem 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, Esel Cekin, Natalie Kindred, Gamze Yucaoglu 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Aca Badem digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Aca Badem 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.
Training and development
– Aca Badem has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Acibadem Healthcare Group 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.
Highly skilled collaborators
– Aca Badem 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 Acibadem Healthcare Group HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Acibadem Healthcare Group | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Acibadem Healthcare Group are -
Products dominated business model
– Even though Aca Badem 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 - Acibadem Healthcare Group should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Aca Badem 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Acibadem Healthcare Group, in the dynamic environment Aca Badem has struggled to respond to the nimble upstart competition. Aca Badem has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Aca Badem products
– To increase the profitability and margins on the products, Aca Badem needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the segment, Aca Badem 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.
Aligning sales with marketing
– It come across in the case study Acibadem Healthcare Group 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 Acibadem Healthcare Group can leverage the sales team experience to cultivate customer relationships as Aca Badem is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, Regina E. Herzlinger, Esel Cekin, Natalie Kindred, Gamze Yucaoglu suggests that, Aca Badem 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.
No frontier risks strategy
– After analyzing the HBR case study Acibadem Healthcare Group, 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.
Interest costs
– Compare to the competition, Aca Badem 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.
Low market penetration in new markets
– Outside its home market of Aca Badem, firm in the HBR case study Acibadem Healthcare Group 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 Acibadem Healthcare Group, it seems that the employees of Aca Badem 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.
Opportunities Acibadem Healthcare Group | 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 Acibadem Healthcare Group 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. Aca Badem can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Aca Badem 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.
Building a culture of innovation
– managers at Aca Badem 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
– Aca Badem 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.
Loyalty marketing
– Aca Badem 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Aca Badem can use these opportunities to build new business models that can help the communities that Aca Badem 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 Aca Badem 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 Aca Badem to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Aca Badem 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 Acibadem Healthcare Group - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Aca Badem to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Aca Badem has opened avenues for new revenue streams for the organization in the industry. This can help Aca Badem to build a more holistic ecosystem as suggested in the Acibadem Healthcare Group case study. Aca Badem can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Aca Badem to increase its market reach. Aca Badem 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 Aca Badem 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Aca Badem is facing challenges because of the dominance of functional experts in the organization. Acibadem Healthcare Group 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.
Leveraging digital technologies
– Aca Badem 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.
Threats Acibadem Healthcare Group External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Acibadem Healthcare Group are -
Regulatory challenges
– Aca Badem 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.
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 Aca Badem.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Aca Badem 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 Acibadem Healthcare Group .
Technology acceleration in Forth Industrial Revolution
– Aca Badem has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Aca Badem 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.
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. Aca Badem needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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. Aca Badem can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Aca Badem 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.
High dependence on third party suppliers
– Aca Badem 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Acibadem Healthcare Group, Aca Badem 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 .
Stagnating economy with rate increase
– Aca Badem 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.
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 Aca Badem in the Leadership & Managing People sector and impact the bottomline of the organization.
Environmental challenges
– Aca Badem 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. Aca Badem can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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 Acibadem Healthcare Group 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 Acibadem Healthcare Group 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 Acibadem Healthcare Group 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 Acibadem Healthcare Group 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 Acibadem Healthcare Group 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 Aca Badem needs to make to build a sustainable competitive advantage.