Healthscope (HSO) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Healthscope (Australia)

Based on various researches at Oak Spring University , Healthscope is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, increasing energy prices, technology disruption, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, etc

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Introduction to SWOT Analysis of Healthscope

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Healthscope can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Healthscope, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Healthscope 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Healthscope can be done for the following purposes –
1. Strategic planning of Healthscope
2. Improving business portfolio management of Healthscope
3. Assessing feasibility of the new initiative in Australia
4. Making a Healthcare Facilities sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Healthscope

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Strengths of Healthscope | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Healthscope are -

Highly skilled collaborators

– Healthscope has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Healthcare Facilities industry. Secondly the value chain collaborators of Healthscope have helped the firm to develop new products and bring them quickly to the marketplace.

Learning organization

- Healthscope 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 Healthscope is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Healthscope emphasize – knowledge, initiative, and innovation.

Analytics focus

– Healthscope 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 Healthcare Facilities industry. The technology infrastructure of Australia is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.

Training and development

– Healthscope has one of the best training and development program in Healthcare industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.

Effective Research and Development (R&D)

– Healthscope has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Healthscope staying ahead in the Healthcare Facilities 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 Healthscope in the Healthcare sector have low bargaining power. Healthscope has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Healthscope to manage not only supply disruptions but also source products at highly competitive prices.

Ability to lead change in Healthcare Facilities

– Healthscope is one of the leading players in the Healthcare Facilities industry in Australia. Over the years it has not only transformed the business landscape in the Healthcare Facilities industry in Australia but also across the existing markets. The ability to lead change has enabled Healthscope in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

High switching costs

– The high switching costs that Healthscope 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.

Innovation driven organization

– Healthscope is one of the most innovative firm in Healthcare Facilities sector.

Operational resilience

– The operational resilience strategy of Healthscope comprises – understanding the underlying the factors in the Healthcare Facilities industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.

High brand equity

– Healthscope has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Healthscope to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Sustainable margins compare to other players in Healthcare Facilities industry

– Healthscope has clearly differentiated products in the market place. This has enabled Healthscope to fetch slight price premium compare to the competitors in the Healthcare Facilities industry. The sustainable margins have also helped Healthscope to invest into research and development (R&D) and innovation.

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Weaknesses of Healthscope | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Healthscope are -

High operating costs

– Compare to the competitors, Healthscope has high operating costs in the Healthcare Facilities industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Healthscope lucrative customers.

Low market penetration in new markets

– Outside its home market of Australia, Healthscope needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Interest costs

– Compare to the competition, Healthscope 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 bargaining power of channel partners in Healthcare Facilities industry

– because of the regulatory requirements in Australia, Healthscope 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 Healthcare Facilities industry.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Healthscope is slow explore the new channels of communication. These new channels of communication can help Healthscope to provide better information regarding Healthcare Facilities products and services. It can also build an online community to further reach out to potential customers.

High cash cycle compare to competitors

Healthscope has a high cash cycle compare to other players in the Healthcare Facilities industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

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 Healthscope supply chain. Even after few cautionary changes, Healthscope is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Healthscope vulnerable to further global disruptions in South East Asia.

Products dominated business model

– Even though Healthscope has some of the most successful models in the Healthcare Facilities industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Healthscope should strive to include more intangible value offerings along with its core products and services.

Workers concerns about automation

– As automation is fast increasing in the Healthcare Facilities industry, Healthscope 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.

Ability to respond to the competition

– As the decision making is very deliberative at Healthscope, in the dynamic environment of Healthcare Facilities industry it has struggled to respond to the nimble upstart competition. Healthscope has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Need for greater diversity

– Healthscope 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.

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Healthscope Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Healthscope are -

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Healthscope 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 Healthscope to hire the very best people irrespective of their geographical location.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Healthscope in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Healthcare Facilities industry, and it will provide faster access to the consumers.

Creating value in data economy

– The success of analytics program of Healthscope has opened avenues for new revenue streams for the organization in Healthcare Facilities industry. This can help Healthscope to build a more holistic ecosystem for Healthscope products in the Healthcare Facilities industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Leveraging digital technologies

– Healthscope 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.

Building a culture of innovation

– managers at Healthscope 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 Healthcare Facilities industry.

Loyalty marketing

– Healthscope 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

– Healthscope can develop new processes and procedures in Healthcare Facilities 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 in Healthcare Facilities industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Healthscope in the Healthcare Facilities industry. Now Healthscope can target international markets with far fewer capital restrictions requirements than the existing system.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Healthscope can use these opportunities to build new business models that can help the communities that Healthscope operates in. Secondly it can use opportunities from government spending in Healthcare Facilities sector.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Healthscope is facing challenges because of the dominance of functional experts in the organization. Healthscope can utilize new technology in the field of Healthcare Facilities industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Healthscope can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

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. Healthscope can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Healthcare Facilities industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Healthscope 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. Healthscope 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.

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Threats Healthscope External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Healthscope are -

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. Healthscope needs to understand the core reasons impacting the Healthcare Facilities industry. This will help it in building a better workplace.

Increasing wage structure of Healthscope

– 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 Healthscope.

Technology acceleration in Forth Industrial Revolution

– Healthscope has witnessed rapid integration of technology during Covid-19 in the Healthcare Facilities industry. As one of the leading players in the industry, Healthscope needs to keep up with the evolution of technology in the Healthcare Facilities 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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Healthscope may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Healthcare Facilities sector.

Environmental challenges

– Healthscope 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. Healthscope can take advantage of this fund but it will also bring new competitors in the Healthcare Facilities industry.

High dependence on third party suppliers

– Healthscope 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.

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 Healthscope.

Consumer confidence and its impact on Healthscope demand

– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in Healthcare Facilities industry and other sectors.

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 Healthscope business can come under increasing regulations regarding data privacy, data security, etc.

Shortening product life cycle

– it is one of the major threat that Healthscope is facing in Healthcare Facilities sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Healthcare Facilities industry are lowering. It can presents Healthscope with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Healthcare Facilities sector.

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.

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Weighted SWOT Analysis of Healthscope Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Healthscope 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 Healthscope 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 Healthscope 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 Healthscope 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 Healthscope needs to make to build a sustainable competitive advantage.

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