Strategic Plan Part III – Financial Plan

Running head: STRATEGIC PLAN PART II - ENVIRONMENTAL ANALYSIS AND 1

Environmental Analysis and Setting Strategic Goals

A business environmental analysis is a process that looks at the external factors that can impact on the business. Such factors can be revealed through conducting Porter`s Five Forces analysis that looks at the microenvironment and PESTEL, which looks at the macro environment (Yurkel, 2012). Porter five forces analyzes competition level in an industry and looks at business strategy development (Porter, 2008). Such factors include the competition in the same industry, he suitable customers, channels, suppliers to the enterprise, politics, the economy, technical issues, political matters, environmental issues, technological issues, or legal issues, among others. All these factors are examined independently to see how each would affect the strategic plan of the business.

Implications of the Environmental Analysis on the Strategic Plan

A strategic plan has to be created to guide actions of a business. Once you create the business plan, it gives you a concrete steps that one should take in order to make a business successful. Before you develop a strategic plan, it is necessary that one study the environmental factors that will affect the organization. When one fails to respond to the conditions in the business environment, it can doom the firm to failure. For example, when the economy is weak the business may have to check on pricing and do more sales, or venturing into a business requires one check the political environment and the chances the company will peacefully exist and earn you profits.

A proper environmental analysis will analyze all the major forces that could affect the business, and tries to forecast how the future events can alter the company. The nature of business determines what the environmental analysis should focus. For instance, a corporation that depends on foreign suppliers has to look into currency exchange rates, changes in shipping costs and import tariffs. One can forecast the short-term or long-term effects of the environmental factors on the business that having a basic idea of events in the world will enable you form a meaningful strategic plan. Hillside Healthcare`s environmental analysis will include a check on Porter`s five forces and the PESTEL. Porter`s five forces looks at the competition. Hillside Healthcare does not face a significant threat from new entrants as the Healthcare business requires a considerable amount of capital and has many legal requirements to be adhered to. There is a threat from substitute products or services emanating from the fact that currently there are alternatives such as the fee-for-service payment models or the medical plans such as Medicare and other medical insurance plans.

Hillside Healthcare has to come up with strategies that make it look more attractive than these other services or incorporate such services into its system. Healthcare is different from other businesses, hence, is incapable of functioning in the same manner. Hillside Healthcare seeks to reach out to those who are not quite financially stable, but they have to boost revenues to continue its operations. The customers have bargaining power, as there are other healthcare providers they can get services from. This means Hillside has to come up with incentives that will attract the customers to them. Suppliers have little bargaining power as they already have an agreement with Hillside Healthcare, but the contracts can be revised with time depending on changes in pricing of products or quantities required. There is low competitive rivalry, especially since Hillside Healthcare has mobile clinics to reach out to those not able to go to hospitals. Most healthcare facilities do not offer this service, and this differentiates Hillside Healthcare. PESTEL analysis looks at the macro environment Hillside Healthcare operates. Politically, Hillside Healthcare operates in a politically stable environment without interruptions to the operations. Economically, Hillside Healthcare is working in economically stable environment where people can pay for their healthcare, even via insurance, and this is good for the business.

Hillside has to consider the financial capabilities of its clients in offering the services. Socially, Hillside has to consider the demographic factors and preferences of the market so as to provide the products people want. Technologically, Hillside has to keep up with new technologies of treatments and equipment to provide the best service to clients though this is not cheap. Environmentally, Hillside has to ensure that they protect the environment and use it sustainably. The healthcare facility should hygienically dispose off their waste to prevent harming the people or contaminating the environment. Legally, the healthcare facility has to ensure to observe all the required rules and regulations of the States they operate in and the medical board. Adhering to rules prevents expensive medical suits, ensures stable operations and trust from clients (Gordon et al., 2000).

Gains of competitive analysis

Competitive analysis addresses the processes and means that firms use to position themselves and their products or services against rivals to win the market share. Competition means that there is a contest between two or more firms, whether due to product/service offerings or supplier contracts or shelf-space negotiations or investor relations, among others.

A strategic plan should enable a business to emerge the winner with the largest market share in the geographic location or a particular type of business. A strategic decision refers to a mix of tactical decisions that take place. Competitive analysis is the foundation of effective strategic formulation and implementation. Efficient analysis enables decision makers to understand and predict crucial market-changing actions that can be undertaken by competitors or other competition-impacting stakeholders.

Policy makers are responsible for answering a small number of powerful questions about the organization, such as; the current business status or situation, options available, direction one wishes the business to take, the direction the business should go, how to get to the destination chosen, and how one know the business is getting there. A business plan focuses on the growth of the business with preparation for possible scenarios and being flexible to respond to unpredictable changes.

In line with the impact of the analysis, Hillside Healthcare has to consider what hey what to achieve, whether in growth or service-delivery or market share, and devise strategies to enable the healthcare facility to achieve that. There has to be a monitoring and evaluation system in place to check on the progress of the healthcare facility towards achievement of the set goals.

Evolving Economic, Legal, and Regulatory Issues

Hillside Healthcare business operations can be affected by certain changes that may also require adjustments to the strategic plan. These changes can be economical. For example, the economy could become unstable, experience a recession. When such happens, it will mean that the client number drops as people will seek cheaper ways to sustain their health such as self-treatment or over-the-counter purchase of drugs. Economy stabilizing could lead to more clients seeking the services (Seago, Schlesinger & Hampton, 2002).

Legal issues that could affect Hillside Healthcare include legal licensing of the business and the workers. Physicians and nurses are to be registered workers, and this means that the business has to ensure that. Regulatory issues could be the frequent checks from the government to ensure the business adheres to set regulations in its operations. All this inform and affect the strategic plan.

SWOT Analysis

Looking at the SWOT analysis better explains the opportunities available that could be made use of and the threats to beware of, all in consideration of the company strengths and weaknesses (Kurttila, Pesonen, Kangas & Kajanus, 2000). . The internal analysis exposes the strengths and weaknesses of the business that put it on merit or disadvantage in meeting the strategic plan. Strengths are the core competencies and weaknesses are the limitations it faces.

The external analysis reveals the opportunities to be taken advantage of and the threats that may hinder the business from achieving set objectives. Hillside has the capability to achieve the set strategic plan as it has the human resource and equipment necessary to achieve their goals. It has already established a market share that it can build on through effective marketing and offering excellent service to the current clientele. The staff is dedicated to the success and growth of the business observing the values in place. Hillside Healthcare can respond to the changes in the environment as the strategic plan is flexible to environmental changes. The staff too has a good change management program in place.

The customer analysis reveals that the business is delivering what the customer want and can afford, the competitive analysis reveals the threats the business faces from the competitors, while the environmental analysis informs on the opportunities available. Hillside Healthcare has opportunity to expand its market share and services it provides by collaborating with other businesses as it has the capability to.

Goals and Objectives for a Three to Five Year Period

Expand the outreach of services to a wider location and more clients. The healthcare seeks to increase the reach of its services by opening two more branches in different areas as from 2016. It will partner with other health care service firms such as medical and equipment suppliers and sign contracts that enable operation and gradual payments to facilitate expansion. The healthcare facility seeks to increase the clients by 30 percent, this not only increases the market share, but the revenue too, to sustain the growth. This will be accomplished through better marketing and services offered at the healthcare. It will collaborate with the government and other private firms in its service to increase service contracts with clients through insurance cover. This will boost revenue and market share.

References

Gordon, J., Hazlett, C., Ten Cate, O., Mann, K., Kilminster, S., Prince, K., & Newble, D. (2000). Strategic planning in medical education: enhancing the learning environment for students in clinical settings. Medical Education,34(10), 841-850.

Kurttila, M., Pesonen, M., Kangas, J., & Kajanus, M. (2000). Utilizing the analytic hierarchy process (AHP) in SWOT analysis—a hybrid method and its application to a forest-certification case. Forest Policy and Economics, 1(1), 41-52.

Porter, M. E. (2008). The five competitive forces that shape strategy. Harvard business review, 86(1), 25-40.

Seago, B. L., Schlesinger, J. B., & Hampton, C. L. (2002). Using a decade of data on medical student computer literacy for strategic planning. Journal of the Medical library Association, 90(2), 202.

Yüksel, I. (2012). Developing a multi-criteria decision making model for PESTEL analysis. International Journal of Business and Management, 7(24), p52.