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Article.pdf

75

CHAPTER

9

A nalysis of an organization’s strengths, weaknesses, opportunities, and threats is commonly called a SWOT analysis. SWOT brings together analyses from the previ- ous chapters and starts to form a cohesive assessment of the company. It does not

identify particular strategies but rather identifies issues that may later need to be strategi- cally addressed. Specific consideration is given to critical success factors in the organiza- tion’s industry. The SWOT categories are examined in two dimensions, covering internal and external issues, as shown in exhibit 9.1.

Internally, every organization has both strengths and weaknesses. As a prelude to developing strategy, the analyst must understand what these strengths and weaknesses are, particularly in relation to the industry’s critical success factors. An aggressive strategy for medical device research and development (R&D) and new product introduction might not be appropriate for an organization that is weak in the area of engineering, R&D, or manufacturing capability. In healthcare, for example, a hospital system delivering direct patient care may not consider technology transfer itself, based on its research activities, but may want to partner with others more experienced in that area. A more fundamental strategy might be to strengthen areas of weakness before venturing into uncharted waters. Opportunities and threats, described in greater detail later in this chapter, are regarded as the external SWOT factors.

A company’s SWOT analysis is typically depicted in a four-block matrix as shown in exhibit 9.2. An alternative display used by some strategists involves listing the organiza- tion side by side with top competitors in the area or region, as shown in exhibit 9.3. The purpose of this format is to compare the SWOT components of one company more easily with those of its competitors.

SWOT: EXTERNAL OPPORTUNITIES AND THREATS

EXHIBIT 9.1 Dimensions of SWOT AnalysisInternal: Strengths Weaknesses

External: Opportunities Threats

Copying and distribution of this PDF is prohibited without written permission. For permission, please contact Copyright Clearance Center at www.copyright.com

2 0 2 1 . A C H E L e a r n .

A l l r i g h t s r e s e r v e d . M a y n o t b e r e p r o d u c e d i n a n y f o r m w i t h o u t p e r m i s s i o n f r o m t h e p u b l i s h e r , e x c e p t f a i r u s e s p e r m i t t e d u n d e r U . S . o r a p p l i c a b l e c o p y r i g h t l a w .

EBSCO Publishing: eBook Collection (EBSCOhost) printed on 6/14/2025 7:57:43 PM UTC via WALDEN UNIVERSITY 2636870; Warren G. McDonald, Michael S. Wayland; Strategic Analysis for Healthcare: Concepts and Practical Applications, Second Edition Account:eds.

Strategic Analysis for Healthcare76

The SWOT analysis serves as the basis for two lines of analysis that we will explore in the chapters ahead. The first line involves developing an internal factor evaluation (IFE) and an external factor evaluation (EFE), leading to an internal–external (I/E) matrix that suggests broad strategic directions. In the second line of analysis, SWOT forms the basis of a TOWS (threats, opportunities, weaknesses, and strengths) matrix, which will later be used to develop specific strategies. See exhibit 9.4.

Most strategy texts instruct the analyst to complete all four SWOT boxes at one time. This text, however, separates the internal and external components and addresses them separately. Doing so allows the strategist to focus on the external issues first and to draw upon the previous analyses that were primarily external in focus. We will examine the internal SWOT factors in chapter 17, after having had an opportunity to perform additional analyses of the inner workings of the company.

EXHIBIT 9.2 SWOT Analysis Matrix

Internal: Strengths

Organization Name

Weaknesses

External: Opportunities Threats

EXHIBIT 9.4 Where Is SWOT Leading?

Specific strategies

S

O T

W

TOWS matrix

Broad strategies

External factor evaluation (EFE)

Internal factor evaluation (IFE)

Internal–external (I/E) matrix

EXHIBIT 9.3 Company Grid for SWOT Analysis with Competitors

SWOT Component Your Organization Competitor 1 Competitor 2 Competitor 3

Strengths

Weaknesses

Opportunities

Threats

Copying and distribution of this PDF is prohibited without written permission. For permission, please contact Copyright Clearance Center at www.copyright.com

EBSCOhost: eBook Collection (EBSCOhost) printed on 6/14/2025 7:57:43 PM UTC via WALDEN UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use.

Chapter 9: SWOT: External Oppor tunit ies and Threats 77

SWOT: The External Analysis

The external factors account for SWOT’s O and T—the opportunities and threats. An opportunity can be thought of as any market possibility for which your organization can take action and have a positive impact. Such impacts could include organizational growth, market share increase, potential entry into new markets, increased profits, chances to exploit competitors’ weaknesses, or any other positive outcome. In healthcare, for instance, the systemization of hospitals is becoming commonplace, and it represents an opportunity for well-positioned organizations to grow.

A threat can be defined as any possibility for your organization to be negatively affected by an external action of the market or a competitor. Threats represent negative impacts on your organization’s profitability and competitive well-being. Negative impacts could involve such things as a competitor’s plans to introduce new technology or services to attract your current customer base, economic forces, government intrusion into health- care, the potential of a hostile takeover, the chance of a new entrant into your market, or looming price wars. In the example presented earlier, systemization represents an opportu- nity, but it can also represent a threat, as larger hospitals enter a market and buy up smaller competitors to form systems.

When you begin your SWOT analysis, first focus on the external factors that could, either now or in the future, affect your organization. Consider the critical success factors that pertain to the external environment. Where does this information come from? It should be drawn from your research about the organization in particular, the competi- tors, the industry, and the external environment in general. You previously assessed these issues to develop your industry map, five forces analysis, PEST analysis, and competitive benchmark analysis. Review those analyses and identify the issues that could become com- petitive threats against your organization or could create competitive opportunities for your organization. Typically, you should identify about ten opportunities and ten threats. Note that you are not proposing strategies or solutions at this time. You are identifying critical external and industry issues that will need to be addressed in subsequent strategy development sections.

You need to think broadly here. For example, it is unlikely that anyone could have predicted the events of September 11 or their effects, such as war, oil and gas price increases, and economic recession. How effective would strategists in the automotive industry have been, however, if they had identified the threat of a sustained oil price spike and a resulting shift in customer preference for fuel-efficient vehicles, and then developed a corresponding strategy? This type of external threat does not depend on a single event such as 9/11, but rather could have evolved from a multitude of issues. The strategist is not expected to have a crystal ball and be able to predict the next 9/11, but rather should be considering questions such as, “What if oil and gas prices spike as a result of some unforeseen event? How would that affect the healthcare industry?”

Though some threats may seem remote, they still may be worth addressing. In the case of oil prices, for example, the potential for a rise in prices could have been reflected in the economic section of an organization’s PEST analysis. Similarly, the threat of war or oil embargos could have been identified in the political section. These issues could then have been transferred directly into the SWOT analysis. You should carefully examine your previous analyses to identify issues for the external section of SWOT. Exhibit 9.5 provides a hypothetical example for a small healthcare organization.

Copying and distribution of this PDF is prohibited without written permission. For permission, please contact Copyright Clearance Center at www.copyright.com

EBSCOhost: eBook Collection (EBSCOhost) printed on 6/14/2025 7:57:43 PM UTC via WALDEN UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use.

Strategic Analysis for Healthcare78

Many of the external issues affecting the healthcare industry, whether pertaining to device manufacturers, pharmaceutical developers, insurance companies, or service delivery organizations, are not immediately obvious. Focus on broad and emerging trends. For instance, artificial intelligence is an emerging issue in the SWOT that may lead to strate- gies to incorporate it in a hospital or training setting. In looking at trends, consider the community hospitals of the 1980s. They were the facilities sought by patients and trusted for their healthcare, much like family physicians. However, times have changed, as has the delivery of healthcare, with minute clinics in big box stores, telemedicine, and the emer- gence of the physician’s assistant displacing the typical doctor’s visit. As a result, we must constantly revisit our SWOT analysis to ensure that we are doing things right and doing the right things.

When you have completed the external portion of the SWOT analysis, the issues you identify will be used to complete the EFE in the next chapter and will later be trans- ferred into the TOWS strategy development chart in chapter 26.

EXHIBIT 9.5 Examples of an Organization’s External Opportunities and Threats

Opportunities Threats

1. Expansion of existing services 1. Multiple competitors

2. Additional locations 2. Emergency department overcrowding

3. Greater exposure and branding 3. Power of suppliers

4. Addition of trauma center 4. Recent lawsuits

5. Purchasing additional practices 5. Low socioeconomic status of area residents

6. Expansion into surrounding counties 6. Transient market

7. Government contracts 7. Pending legislation expanding patients’ rights

8. Residency programs/teaching 8. Qualified providers reluctant to relocate to the area

9. Expansion of ancillary services 9. Changes in reimbursement

10. Demographic changes 10. Decrease in population

Copying and distribution of this PDF is prohibited without written permission. For permission, please contact Copyright Clearance Center at www.copyright.com

EBSCOhost: eBook Collection (EBSCOhost) printed on 6/14/2025 7:57:43 PM UTC via WALDEN UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use.

Chapter 9: SWOT: External Oppor tunit ies and Threats 79

E

X

E

R

C

I

S

E

Complete the external portion of the SWOT analysis for your project organization in the space provided. Be sure to review your previous analyses and consider the critical success factors in the industry. What are the implications for strategy? The issues you identify in this exercise will be used to complete the EFE in the next chapter and later will be transferred into the TOWS strategy development chart in chapter 26.

(SW)OT Analysis of _________________________________________________

External

Opportunities Threats

1. 1.

2. 2.

3. 3.

4. 4.

5. 5.

6. 6.

7. 7.

8. 8.

9. 9.

10. 10.

Copying and distribution of this PDF is prohibited without written permission. For permission, please contact Copyright Clearance Center at www.copyright.com

EBSCOhost: eBook Collection (EBSCOhost) printed on 6/14/2025 7:57:43 PM UTC via WALDEN UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use.

Strategic Analysis for Healthcare80

E

X

E

R

C

I

S

E

Implications for Strategy:

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

Copying and distribution of this PDF is prohibited without written permission. For permission, please contact Copyright Clearance Center at www.copyright.com

EBSCOhost: eBook Collection (EBSCOhost) printed on 6/14/2025 7:57:43 PM UTC via WALDEN UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use.

TemplateInfo.pdf

MODULE 2 ASSIGNMENT 1 EXTERNAL SWOT ANALYSIS INFORMATION

There are a variety of questions you should begin asking yourself, as well as asking HSO leadership. Some examples would include: Opportunities:

1. How can we turn our strengths into opportunities? 2. How can we turn our weaknesses into opportunities? 3. Is there a need in our HSO that no one is meeting? 4. What could we do today that is not being done? 5. How is our field changing? How can we take advantage of those changes? 6. Who could we support? How could we support them? 7. What are our regions changing community demographics? 8. What new opportunities in the market are becoming available? 9. How is the market changing? 10. What opportunities did we pass but are still available? 11. What would be the ideal opportunity for us? 12. What is the competition ignoring that we can play in our favor?

Threats:

1. What obstacles do we face? 2. Could any of our weaknesses prevent our unit from meeting our goals? 3. Who and/or what might cause us problems in the future? How? 4. Are there any standards, policies, and/or legislation changing that might

negatively impact us? 5. Are we competing with others to provide service? 6. Are there changes in our field or in technology that could threaten our success? 7. Who are our competitors? 8. Has there been an increase in competition lately? Where and why? 9. What are the costs of our resources? Is it affecting our bottom line? 10. What are the economic trends impacting fewer healthcare services in our

industry? Why? 11. Are our suppliers unreliable?

Need.docx

To prepare:

· Review the Learning Resource on research and competitive analysis.

· Review the Learning Resources on external SWOT analysis.

· Review the Learning Resource on ethical organizational culture.

· Review the research you already conducted on your HSO and competitor organizations in Module 1, and then spend some additional time conducting research on your HSO’s external environment. Continue to use the research resources, listed in Chapter 3 of your textbook, to guide you in your information gathering. You will want to gather information from organizational leadership, published literature, conference proceedings, and professional associations. Keep in mind the various approaches for collecting information may vary depending on your specific HSO type. As mentioned in Module 1, some examples of sources that can assist with a strategic analysis include:

· Websites of your HSO and competitor HSOs

· Research tools listed in the textbook for this course

· Organizational leaders that you can contact about the organization

· Members of a professional association that students can contact for an interview

· Published literature

· Professional associations (white papers, newsletters, conferences, webinars, etc.)

· Regulatory agencies (Joint Commission, HHS, Medicare, and Medicaid, etc.)

· Trade journals

· Use this research of your selected HSO and competitor organizations to begin to brainstorm external factors that could positively or negatively affect your selected HSO.

· As you develop this list of opportunities and threats, add details to describe exactly how the opportunity or threat could impact your selected HSO. For example, if a policy change poses an opportunity, be certain to explain what the policy is and how the policy might positively impact your HSO.

· Chapter 9 of your textbook explains how to create an external SWOT analysis and provides an example. Be sure to review the textbook guidance closely, and then use the Module 2 External SWOT Analysis Template to complete the analysis and associated interpretation questions.

The Assignment: External SWOT Analysis—Opportunities and Threats

Use the Module 2 External SWOT Analysis Template to complete the External SWOT Table and answer the accompanying interpretation questions.

Template.docx

External SWOT Analysis

External SWOT Table

Use your research of your HSO and competitor organizations to list and briefly describe five or six (5–6) opportunities your HSO could potentially leverage and five to six (5–6) external threats to your HSO. In your descriptions, be sure to describe the specific ways each opportunity and threat manifest at your selected HSO.

Opportunities	Brief description of how this opportunity manifests at your HSO
1.
2.
3.
4.
5.
6.

Threats	Brief description of how this threat manifests at your HSO
1.
2.
3.
4.
5.
6.

External SWOT Analysis Interpretation

· Review your list of opportunities and threats and describe significant findings and themes.

· Read the following article and take note of the author’s arguments that an HSO’s success is tied to its ability to maintain alignment between its mission and practice, and that ethics must be built into organizational culture and strategy. Use this lens to consider the role of ethics in your HSO’s organizational strategy. Then, explain which opportunities or threats could pose ethical challenges for your HSO’s leaders and which might promote mission alignment. Be sure to cite the article in your response.

· Nelson, W. A., Taylor, E., & Walsh, T. (2020). Building an ethical organizational culture. Health Care Manager, 39(4), 168–174. https://doi.org/10.1097/HCM.0000000000000304

· Explain how your analysis of your HSO’s opportunities and threats could inform strategic recommendations to your HSO’s leadership.

SWOT table adapted from Wayland, M. S., & McDonald, W. G. (2021). Strategic analysis for healthcare: Concepts and practical applications (2nd ed., pp. 79–80). Health Administration Press.

Article.pdf

75

CHAPTER

9

A nalysis of an organization’s strengths, weaknesses, opportunities, and threats is commonly called a SWOT analysis. SWOT brings together analyses from the previ- ous chapters and starts to form a cohesive assessment of the company. It does not

identify particular strategies but rather identifies issues that may later need to be strategi- cally addressed. Specific consideration is given to critical success factors in the organiza- tion’s industry. The SWOT categories are examined in two dimensions, covering internal and external issues, as shown in exhibit 9.1.

Internally, every organization has both strengths and weaknesses. As a prelude to developing strategy, the analyst must understand what these strengths and weaknesses are, particularly in relation to the industry’s critical success factors. An aggressive strategy for medical device research and development (R&D) and new product introduction might not be appropriate for an organization that is weak in the area of engineering, R&D, or manufacturing capability. In healthcare, for example, a hospital system delivering direct patient care may not consider technology transfer itself, based on its research activities, but may want to partner with others more experienced in that area. A more fundamental strategy might be to strengthen areas of weakness before venturing into uncharted waters. Opportunities and threats, described in greater detail later in this chapter, are regarded as the external SWOT factors.

A company’s SWOT analysis is typically depicted in a four-block matrix as shown in exhibit 9.2. An alternative display used by some strategists involves listing the organiza- tion side by side with top competitors in the area or region, as shown in exhibit 9.3. The purpose of this format is to compare the SWOT components of one company more easily with those of its competitors.

SWOT: EXTERNAL OPPORTUNITIES AND THREATS

EXHIBIT 9.1 Dimensions of SWOT AnalysisInternal: Strengths Weaknesses

External: Opportunities Threats

Copying and distribution of this PDF is prohibited without written permission. For permission, please contact Copyright Clearance Center at www.copyright.com

2 0 2 1 . A C H E L e a r n .

A l l r i g h t s r e s e r v e d . M a y n o t b e r e p r o d u c e d i n a n y f o r m w i t h o u t p e r m i s s i o n f r o m t h e p u b l i s h e r , e x c e p t f a i r u s e s p e r m i t t e d u n d e r U . S . o r a p p l i c a b l e c o p y r i g h t l a w .

EBSCO Publishing: eBook Collection (EBSCOhost) printed on 6/14/2025 7:57:43 PM UTC via WALDEN UNIVERSITY 2636870; Warren G. McDonald, Michael S. Wayland; Strategic Analysis for Healthcare: Concepts and Practical Applications, Second Edition Account:eds.

Strategic Analysis for Healthcare76

The SWOT analysis serves as the basis for two lines of analysis that we will explore in the chapters ahead. The first line involves developing an internal factor evaluation (IFE) and an external factor evaluation (EFE), leading to an internal–external (I/E) matrix that suggests broad strategic directions. In the second line of analysis, SWOT forms the basis of a TOWS (threats, opportunities, weaknesses, and strengths) matrix, which will later be used to develop specific strategies. See exhibit 9.4.

Most strategy texts instruct the analyst to complete all four SWOT boxes at one time. This text, however, separates the internal and external components and addresses them separately. Doing so allows the strategist to focus on the external issues first and to draw upon the previous analyses that were primarily external in focus. We will examine the internal SWOT factors in chapter 17, after having had an opportunity to perform additional analyses of the inner workings of the company.

EXHIBIT 9.2 SWOT Analysis Matrix

Internal: Strengths

Organization Name

Weaknesses

External: Opportunities Threats

EXHIBIT 9.4 Where Is SWOT Leading?

Specific strategies

S

O T

W

TOWS matrix

Broad strategies

External factor evaluation (EFE)

Internal factor evaluation (IFE)

Internal–external (I/E) matrix

EXHIBIT 9.3 Company Grid for SWOT Analysis with Competitors

SWOT Component Your Organization Competitor 1 Competitor 2 Competitor 3

Strengths

Weaknesses

Opportunities

Threats

Copying and distribution of this PDF is prohibited without written permission. For permission, please contact Copyright Clearance Center at www.copyright.com

EBSCOhost: eBook Collection (EBSCOhost) printed on 6/14/2025 7:57:43 PM UTC via WALDEN UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use.

Chapter 9: SWOT: External Oppor tunit ies and Threats 77

SWOT: The External Analysis

The external factors account for SWOT’s O and T—the opportunities and threats. An opportunity can be thought of as any market possibility for which your organization can take action and have a positive impact. Such impacts could include organizational growth, market share increase, potential entry into new markets, increased profits, chances to exploit competitors’ weaknesses, or any other positive outcome. In healthcare, for instance, the systemization of hospitals is becoming commonplace, and it represents an opportunity for well-positioned organizations to grow.

A threat can be defined as any possibility for your organization to be negatively affected by an external action of the market or a competitor. Threats represent negative impacts on your organization’s profitability and competitive well-being. Negative impacts could involve such things as a competitor’s plans to introduce new technology or services to attract your current customer base, economic forces, government intrusion into health- care, the potential of a hostile takeover, the chance of a new entrant into your market, or looming price wars. In the example presented earlier, systemization represents an opportu- nity, but it can also represent a threat, as larger hospitals enter a market and buy up smaller competitors to form systems.

When you begin your SWOT analysis, first focus on the external factors that could, either now or in the future, affect your organization. Consider the critical success factors that pertain to the external environment. Where does this information come from? It should be drawn from your research about the organization in particular, the competi- tors, the industry, and the external environment in general. You previously assessed these issues to develop your industry map, five forces analysis, PEST analysis, and competitive benchmark analysis. Review those analyses and identify the issues that could become com- petitive threats against your organization or could create competitive opportunities for your organization. Typically, you should identify about ten opportunities and ten threats. Note that you are not proposing strategies or solutions at this time. You are identifying critical external and industry issues that will need to be addressed in subsequent strategy development sections.

You need to think broadly here. For example, it is unlikely that anyone could have predicted the events of September 11 or their effects, such as war, oil and gas price increases, and economic recession. How effective would strategists in the automotive industry have been, however, if they had identified the threat of a sustained oil price spike and a resulting shift in customer preference for fuel-efficient vehicles, and then developed a corresponding strategy? This type of external threat does not depend on a single event such as 9/11, but rather could have evolved from a multitude of issues. The strategist is not expected to have a crystal ball and be able to predict the next 9/11, but rather should be considering questions such as, “What if oil and gas prices spike as a result of some unforeseen event? How would that affect the healthcare industry?”

Though some threats may seem remote, they still may be worth addressing. In the case of oil prices, for example, the potential for a rise in prices could have been reflected in the economic section of an organization’s PEST analysis. Similarly, the threat of war or oil embargos could have been identified in the political section. These issues could then have been transferred directly into the SWOT analysis. You should carefully examine your previous analyses to identify issues for the external section of SWOT. Exhibit 9.5 provides a hypothetical example for a small healthcare organization.

Copying and distribution of this PDF is prohibited without written permission. For permission, please contact Copyright Clearance Center at www.copyright.com

EBSCOhost: eBook Collection (EBSCOhost) printed on 6/14/2025 7:57:43 PM UTC via WALDEN UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use.

Strategic Analysis for Healthcare78

Many of the external issues affecting the healthcare industry, whether pertaining to device manufacturers, pharmaceutical developers, insurance companies, or service delivery organizations, are not immediately obvious. Focus on broad and emerging trends. For instance, artificial intelligence is an emerging issue in the SWOT that may lead to strate- gies to incorporate it in a hospital or training setting. In looking at trends, consider the community hospitals of the 1980s. They were the facilities sought by patients and trusted for their healthcare, much like family physicians. However, times have changed, as has the delivery of healthcare, with minute clinics in big box stores, telemedicine, and the emer- gence of the physician’s assistant displacing the typical doctor’s visit. As a result, we must constantly revisit our SWOT analysis to ensure that we are doing things right and doing the right things.

When you have completed the external portion of the SWOT analysis, the issues you identify will be used to complete the EFE in the next chapter and will later be trans- ferred into the TOWS strategy development chart in chapter 26.

EXHIBIT 9.5 Examples of an Organization’s External Opportunities and Threats

Opportunities Threats

1. Expansion of existing services 1. Multiple competitors

2. Additional locations 2. Emergency department overcrowding

3. Greater exposure and branding 3. Power of suppliers

4. Addition of trauma center 4. Recent lawsuits

5. Purchasing additional practices 5. Low socioeconomic status of area residents

6. Expansion into surrounding counties 6. Transient market

7. Government contracts 7. Pending legislation expanding patients’ rights

8. Residency programs/teaching 8. Qualified providers reluctant to relocate to the area

9. Expansion of ancillary services 9. Changes in reimbursement

10. Demographic changes 10. Decrease in population

Copying and distribution of this PDF is prohibited without written permission. For permission, please contact Copyright Clearance Center at www.copyright.com

EBSCOhost: eBook Collection (EBSCOhost) printed on 6/14/2025 7:57:43 PM UTC via WALDEN UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use.

Chapter 9: SWOT: External Oppor tunit ies and Threats 79

E

X

E

R

C

I

S

E

Complete the external portion of the SWOT analysis for your project organization in the space provided. Be sure to review your previous analyses and consider the critical success factors in the industry. What are the implications for strategy? The issues you identify in this exercise will be used to complete the EFE in the next chapter and later will be transferred into the TOWS strategy development chart in chapter 26.

(SW)OT Analysis of _________________________________________________

External

Opportunities Threats

1. 1.

2. 2.

3. 3.

4. 4.

5. 5.

6. 6.

7. 7.

8. 8.

9. 9.

10. 10.

Copying and distribution of this PDF is prohibited without written permission. For permission, please contact Copyright Clearance Center at www.copyright.com

EBSCOhost: eBook Collection (EBSCOhost) printed on 6/14/2025 7:57:43 PM UTC via WALDEN UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use.

Strategic Analysis for Healthcare80

E

X

E

R

C

I

S

E

Implications for Strategy:

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

Copying and distribution of this PDF is prohibited without written permission. For permission, please contact Copyright Clearance Center at www.copyright.com

EBSCOhost: eBook Collection (EBSCOhost) printed on 6/14/2025 7:57:43 PM UTC via WALDEN UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use.

TemplateInfo.pdf

MODULE 2 ASSIGNMENT 1 EXTERNAL SWOT ANALYSIS INFORMATION

There are a variety of questions you should begin asking yourself, as well as asking HSO leadership. Some examples would include: Opportunities:

1. How can we turn our strengths into opportunities? 2. How can we turn our weaknesses into opportunities? 3. Is there a need in our HSO that no one is meeting? 4. What could we do today that is not being done? 5. How is our field changing? How can we take advantage of those changes? 6. Who could we support? How could we support them? 7. What are our regions changing community demographics? 8. What new opportunities in the market are becoming available? 9. How is the market changing? 10. What opportunities did we pass but are still available? 11. What would be the ideal opportunity for us? 12. What is the competition ignoring that we can play in our favor?

Threats:

1. What obstacles do we face? 2. Could any of our weaknesses prevent our unit from meeting our goals? 3. Who and/or what might cause us problems in the future? How? 4. Are there any standards, policies, and/or legislation changing that might

negatively impact us? 5. Are we competing with others to provide service? 6. Are there changes in our field or in technology that could threaten our success? 7. Who are our competitors? 8. Has there been an increase in competition lately? Where and why? 9. What are the costs of our resources? Is it affecting our bottom line? 10. What are the economic trends impacting fewer healthcare services in our

industry? Why? 11. Are our suppliers unreliable?

Need.docx

To prepare:

· Review the Learning Resource on research and competitive analysis.

· Review the Learning Resources on external SWOT analysis.

· Review the Learning Resource on ethical organizational culture.

· Review the research you already conducted on your HSO and competitor organizations in Module 1, and then spend some additional time conducting research on your HSO’s external environment. Continue to use the research resources, listed in Chapter 3 of your textbook, to guide you in your information gathering. You will want to gather information from organizational leadership, published literature, conference proceedings, and professional associations. Keep in mind the various approaches for collecting information may vary depending on your specific HSO type. As mentioned in Module 1, some examples of sources that can assist with a strategic analysis include:

· Websites of your HSO and competitor HSOs

· Research tools listed in the textbook for this course

· Organizational leaders that you can contact about the organization

· Members of a professional association that students can contact for an interview

· Published literature

· Professional associations (white papers, newsletters, conferences, webinars, etc.)

· Regulatory agencies (Joint Commission, HHS, Medicare, and Medicaid, etc.)

· Trade journals

· Use this research of your selected HSO and competitor organizations to begin to brainstorm external factors that could positively or negatively affect your selected HSO.

· As you develop this list of opportunities and threats, add details to describe exactly how the opportunity or threat could impact your selected HSO. For example, if a policy change poses an opportunity, be certain to explain what the policy is and how the policy might positively impact your HSO.

· Chapter 9 of your textbook explains how to create an external SWOT analysis and provides an example. Be sure to review the textbook guidance closely, and then use the Module 2 External SWOT Analysis Template to complete the analysis and associated interpretation questions.

The Assignment: External SWOT Analysis—Opportunities and Threats

Use the Module 2 External SWOT Analysis Template to complete the External SWOT Table and answer the accompanying interpretation questions.

Template.docx

External SWOT Analysis

External SWOT Table

Use your research of your HSO and competitor organizations to list and briefly describe five or six (5–6) opportunities your HSO could potentially leverage and five to six (5–6) external threats to your HSO. In your descriptions, be sure to describe the specific ways each opportunity and threat manifest at your selected HSO.

Opportunities	Brief description of how this opportunity manifests at your HSO
1.
2.
3.
4.
5.
6.

Threats	Brief description of how this threat manifests at your HSO
1.
2.
3.
4.
5.
6.

External SWOT Analysis Interpretation

· Review your list of opportunities and threats and describe significant findings and themes.

· Read the following article and take note of the author’s arguments that an HSO’s success is tied to its ability to maintain alignment between its mission and practice, and that ethics must be built into organizational culture and strategy. Use this lens to consider the role of ethics in your HSO’s organizational strategy. Then, explain which opportunities or threats could pose ethical challenges for your HSO’s leaders and which might promote mission alignment. Be sure to cite the article in your response.

· Nelson, W. A., Taylor, E., & Walsh, T. (2020). Building an ethical organizational culture. Health Care Manager, 39(4), 168–174. https://doi.org/10.1097/HCM.0000000000000304

· Explain how your analysis of your HSO’s opportunities and threats could inform strategic recommendations to your HSO’s leadership.

SWOT table adapted from Wayland, M. S., & McDonald, W. G. (2021). Strategic analysis for healthcare: Concepts and practical applications (2nd ed., pp. 79–80). Health Administration Press.

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CHAPTER

9

A nalysis of an organization’s strengths, weaknesses, opportunities, and threats is commonly called a SWOT analysis. SWOT brings together analyses from the previ- ous chapters and starts to form a cohesive assessment of the company. It does not

identify particular strategies but rather identifies issues that may later need to be strategi- cally addressed. Specific consideration is given to critical success factors in the organiza- tion’s industry. The SWOT categories are examined in two dimensions, covering internal and external issues, as shown in exhibit 9.1.

Internally, every organization has both strengths and weaknesses. As a prelude to developing strategy, the analyst must understand what these strengths and weaknesses are, particularly in relation to the industry’s critical success factors. An aggressive strategy for medical device research and development (R&D) and new product introduction might not be appropriate for an organization that is weak in the area of engineering, R&D, or manufacturing capability. In healthcare, for example, a hospital system delivering direct patient care may not consider technology transfer itself, based on its research activities, but may want to partner with others more experienced in that area. A more fundamental strategy might be to strengthen areas of weakness before venturing into uncharted waters. Opportunities and threats, described in greater detail later in this chapter, are regarded as the external SWOT factors.

A company’s SWOT analysis is typically depicted in a four-block matrix as shown in exhibit 9.2. An alternative display used by some strategists involves listing the organiza- tion side by side with top competitors in the area or region, as shown in exhibit 9.3. The purpose of this format is to compare the SWOT components of one company more easily with those of its competitors.

SWOT: EXTERNAL OPPORTUNITIES AND THREATS

EXHIBIT 9.1 Dimensions of SWOT AnalysisInternal: Strengths Weaknesses

External: Opportunities Threats

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2 0 2 1 . A C H E L e a r n .

A l l r i g h t s r e s e r v e d . M a y n o t b e r e p r o d u c e d i n a n y f o r m w i t h o u t p e r m i s s i o n f r o m t h e p u b l i s h e r , e x c e p t f a i r u s e s p e r m i t t e d u n d e r U . S . o r a p p l i c a b l e c o p y r i g h t l a w .

EBSCO Publishing: eBook Collection (EBSCOhost) printed on 6/14/2025 7:57:43 PM UTC via WALDEN UNIVERSITY 2636870; Warren G. McDonald, Michael S. Wayland; Strategic Analysis for Healthcare: Concepts and Practical Applications, Second Edition Account:eds.

Strategic Analysis for Healthcare76

The SWOT analysis serves as the basis for two lines of analysis that we will explore in the chapters ahead. The first line involves developing an internal factor evaluation (IFE) and an external factor evaluation (EFE), leading to an internal–external (I/E) matrix that suggests broad strategic directions. In the second line of analysis, SWOT forms the basis of a TOWS (threats, opportunities, weaknesses, and strengths) matrix, which will later be used to develop specific strategies. See exhibit 9.4.

Most strategy texts instruct the analyst to complete all four SWOT boxes at one time. This text, however, separates the internal and external components and addresses them separately. Doing so allows the strategist to focus on the external issues first and to draw upon the previous analyses that were primarily external in focus. We will examine the internal SWOT factors in chapter 17, after having had an opportunity to perform additional analyses of the inner workings of the company.

EXHIBIT 9.2 SWOT Analysis Matrix

Internal: Strengths

Organization Name

Weaknesses

External: Opportunities Threats

EXHIBIT 9.4 Where Is SWOT Leading?

Specific strategies

S

O T

W

TOWS matrix

Broad strategies

External factor evaluation (EFE)

Internal factor evaluation (IFE)

Internal–external (I/E) matrix

EXHIBIT 9.3 Company Grid for SWOT Analysis with Competitors

SWOT Component Your Organization Competitor 1 Competitor 2 Competitor 3

Strengths

Weaknesses

Opportunities

Threats

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Chapter 9: SWOT: External Oppor tunit ies and Threats 77

SWOT: The External Analysis

The external factors account for SWOT’s O and T—the opportunities and threats. An opportunity can be thought of as any market possibility for which your organization can take action and have a positive impact. Such impacts could include organizational growth, market share increase, potential entry into new markets, increased profits, chances to exploit competitors’ weaknesses, or any other positive outcome. In healthcare, for instance, the systemization of hospitals is becoming commonplace, and it represents an opportunity for well-positioned organizations to grow.

A threat can be defined as any possibility for your organization to be negatively affected by an external action of the market or a competitor. Threats represent negative impacts on your organization’s profitability and competitive well-being. Negative impacts could involve such things as a competitor’s plans to introduce new technology or services to attract your current customer base, economic forces, government intrusion into health- care, the potential of a hostile takeover, the chance of a new entrant into your market, or looming price wars. In the example presented earlier, systemization represents an opportu- nity, but it can also represent a threat, as larger hospitals enter a market and buy up smaller competitors to form systems.

When you begin your SWOT analysis, first focus on the external factors that could, either now or in the future, affect your organization. Consider the critical success factors that pertain to the external environment. Where does this information come from? It should be drawn from your research about the organization in particular, the competi- tors, the industry, and the external environment in general. You previously assessed these issues to develop your industry map, five forces analysis, PEST analysis, and competitive benchmark analysis. Review those analyses and identify the issues that could become com- petitive threats against your organization or could create competitive opportunities for your organization. Typically, you should identify about ten opportunities and ten threats. Note that you are not proposing strategies or solutions at this time. You are identifying critical external and industry issues that will need to be addressed in subsequent strategy development sections.

You need to think broadly here. For example, it is unlikely that anyone could have predicted the events of September 11 or their effects, such as war, oil and gas price increases, and economic recession. How effective would strategists in the automotive industry have been, however, if they had identified the threat of a sustained oil price spike and a resulting shift in customer preference for fuel-efficient vehicles, and then developed a corresponding strategy? This type of external threat does not depend on a single event such as 9/11, but rather could have evolved from a multitude of issues. The strategist is not expected to have a crystal ball and be able to predict the next 9/11, but rather should be considering questions such as, “What if oil and gas prices spike as a result of some unforeseen event? How would that affect the healthcare industry?”

Though some threats may seem remote, they still may be worth addressing. In the case of oil prices, for example, the potential for a rise in prices could have been reflected in the economic section of an organization’s PEST analysis. Similarly, the threat of war or oil embargos could have been identified in the political section. These issues could then have been transferred directly into the SWOT analysis. You should carefully examine your previous analyses to identify issues for the external section of SWOT. Exhibit 9.5 provides a hypothetical example for a small healthcare organization.

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Strategic Analysis for Healthcare78

Many of the external issues affecting the healthcare industry, whether pertaining to device manufacturers, pharmaceutical developers, insurance companies, or service delivery organizations, are not immediately obvious. Focus on broad and emerging trends. For instance, artificial intelligence is an emerging issue in the SWOT that may lead to strate- gies to incorporate it in a hospital or training setting. In looking at trends, consider the community hospitals of the 1980s. They were the facilities sought by patients and trusted for their healthcare, much like family physicians. However, times have changed, as has the delivery of healthcare, with minute clinics in big box stores, telemedicine, and the emer- gence of the physician’s assistant displacing the typical doctor’s visit. As a result, we must constantly revisit our SWOT analysis to ensure that we are doing things right and doing the right things.

When you have completed the external portion of the SWOT analysis, the issues you identify will be used to complete the EFE in the next chapter and will later be trans- ferred into the TOWS strategy development chart in chapter 26.

EXHIBIT 9.5 Examples of an Organization’s External Opportunities and Threats

Opportunities Threats

1. Expansion of existing services 1. Multiple competitors

2. Additional locations 2. Emergency department overcrowding

3. Greater exposure and branding 3. Power of suppliers

4. Addition of trauma center 4. Recent lawsuits

5. Purchasing additional practices 5. Low socioeconomic status of area residents

6. Expansion into surrounding counties 6. Transient market

7. Government contracts 7. Pending legislation expanding patients’ rights

8. Residency programs/teaching 8. Qualified providers reluctant to relocate to the area

9. Expansion of ancillary services 9. Changes in reimbursement

10. Demographic changes 10. Decrease in population

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Chapter 9: SWOT: External Oppor tunit ies and Threats 79

E

X

E

R

C

I

S

E

Complete the external portion of the SWOT analysis for your project organization in the space provided. Be sure to review your previous analyses and consider the critical success factors in the industry. What are the implications for strategy? The issues you identify in this exercise will be used to complete the EFE in the next chapter and later will be transferred into the TOWS strategy development chart in chapter 26.

(SW)OT Analysis of _________________________________________________

External

Opportunities Threats

1. 1.

2. 2.

3. 3.

4. 4.

5. 5.

6. 6.

7. 7.

8. 8.

9. 9.

10. 10.

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Strategic Analysis for Healthcare80

E

X

E

R

C

I

S

E

Implications for Strategy:

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

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