Business w/healthcare 5 pages not including title and reference page apa format
vwccspt12
chapter3_1.pptx
STRATEGIC MANAGEMENT OF HEALTH CARE ORGANIZATIONS 7TH EDITION
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Service Area Competitor Analysis
Chapter 3
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Chapter 3 Learning Objectives
Understand the importance of service area competitor analysis as well as its purpose.
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Chapter 3 Learning Objectives
Understand the importance of service area competitor analysis as well as its purpose.
Understand the relationship between general and health care environmental issue identification and analysis and service area competitor analysis.
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Chapter 3 Learning Objectives
Understand the importance of service area competitor analysis as well as its purpose.
Understand the relationship between general and health care environmental issue identification and analysis and service area competitor analysis.
Define and analyze the service area for a health care organization or specific health service.
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Chapter 3 Learning Objectives
Understand the importance of service area competitor analysis as well as its purpose.
Understand the relationship between general and health care environmental issue identification and analysis and service area competitor analysis.
Define and analyze the service area for a health care organization or specific health service.
Conduct a service area structure analysis for a health care organization.
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Chapter 3 Learning Objectives
Understand strategic groups and be able to map competitors’ strategies along important service and market dimensions.
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Chapter 3 Learning Objectives
Understand strategic groups and be able to map competitors’ strategies along important service and market dimensions.
Understand the elements of service area competitor analysis and assess likely competitor strategies.
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Chapter 3 Learning Objectives
Understand strategic groups and be able to map competitors’ strategies along important service and market dimensions.
Understand the elements of service area competitor analysis and assess likely competitor strategies.
Aggregate general environmental and health care industry issues with service area and competitor issues and synthesize specific strategy implications.
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Chapter 3 Learning Objectives
Understand strategic groups and be able to map competitors’ strategies along important service and market dimensions.
Understand the elements of service area competitor analysis and assess likely competitor strategies.
Aggregate general environmental and health care industry issues with service area and competitor issues and synthesize specific strategy implications.
Suggest several questions to initiate strategic thinking.
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The Strategic Planning Process
Strategic Planning
Situation Analysis
Strategy Formulation
Planning the Implementation
External Analysis
Internal Analysis
Directional Strategies
Directional Strategies
Adaptive Strategies
Market Entry Strategies
Competitive Strategies
Service Delivery Strategies
Support Strategies
Action Plans
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Focus of Service Area Competitor Analysis
Avoid surprises in the marketplace.
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Focus of Service Area Competitor Analysis
Avoid surprises in the marketplace.
Provide a forum for leaders to discuss and evaluate their assumptions about the organization’s capabilities, market position, and competition.
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Focus of Service Area Competitor Analysis
Avoid surprises in the marketplace.
Provide a forum for leaders to discuss and evaluate their assumptions about the organization’s capabilities, market position, and competition.
Make everyone aware of significant and formidable competitors to whom the organization must respond.
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Focus of Service Area Competitor Analysis
Avoid surprises in the marketplace.
Provide a forum for leaders to discuss and evaluate their assumptions about the organization’s capabilities, market position, and competition.
Make everyone aware of significant and formidable competitors to whom the organization must respond.
Help the organization learn from rivals through benchmarking (specific measures comparing the organization with its competitors on a set of key variables).
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Focus of Service Area Competitor Analysis
Build consensus among executives on the organization’s goals and capabilities, thus increasing their commitment to the chosen strategy.
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Focus of Service Area Competitor Analysis
Build consensus among executives on the organization’s goals and capabilities, thus increasing their commitment to the chosen strategy.
Foster strategic thinking throughout the organization.
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Focus of Service Area Competitor Analysis
Build consensus among executives on the organization’s goals and capabilities, thus increasing their commitment to the chosen strategy.
Foster strategic thinking throughout the organization.
Identify market niches and discontinuities.
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Focus of Service Area Competitor Analysis
Build consensus among executives on the organization’s goals and capabilities, thus increasing their commitment to the chosen strategy.
Foster strategic thinking throughout the organization.
Identify market niches and discontinuities.
Select a viable strategy.
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Focus of Service Area Competitor Analysis
Build consensus among executives on the organization’s goals and capabilities, thus increasing their commitment to the chosen strategy.
Foster strategic thinking throughout the organization.
Identify market niches and discontinuities.
Select a viable strategy.
Contribute to the successful implementation of the strategy.
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Focus of Service Area Competitor Analysis
Build consensus among executives on the organization’s goals and capabilities, thus increasing their commitment to the chosen strategy.
Foster strategic thinking throughout the organization.
Identify market niches and discontinuities.
Select a viable strategy.
Contribute to the successful implementation of the strategy.
Anticipate competitors’ moves.
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Focus of Service Area Competitor Analysis
Build consensus among executives on the organization’s goals and capabilities, thus increasing their commitment to the chosen strategy.
Foster strategic thinking throughout the organization.
Identify market niches and discontinuities.
Select a viable strategy.
Contribute to the successful implementation of the strategy.
Anticipate competitors’ moves.
Shorten the time required to respond (countermoves) to a competitor’s moves.
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Obstacles to Effective Service Area Competitor Analysis
Misjudging industry and service area boundaries
Poor identification of the competition
Overemphasis on competitors’ visible competence
Overemphasis on where, rather than how, to compete
Faulty assumptions about the competition
Paralysis by analysis
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Service Area Competitor Analysis
Define the Service Categories
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Service Area Competitor Analysis
Define the Service Categories
Define the Service Area
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Service Area Competitor Analysis
Define the Service Categories
Define the Service Area
Create a Service Area Profile
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Service Area Competitor Analysis
Define the Service Categories
Define the Service Area
Create a Service Area Profile
Conduct Service Area Structure Analysis
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Service Area Competitor Analysis
Define the Service Categories
Define the Service Area
Create a Service Area Profile
Conduct Service Area Structure Analysis
Conduct Competitor Analysis
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Service Area Competitor Analysis
Define the Service Categories
Define the Service Area
Create a Service Area Profile
Conduct Service Area Structure Analysis
Conduct Competitor Analysis
Map Strategic Groups
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Service Area Competitor Analysis
Define the Service Categories
Define the Service Area
Create a Service Area Profile
Conduct Service Area Structure Analysis
Conduct Competitor Analysis
Map Strategic Groups
Synthesize Analyses
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Beginning a Service Area Competitor Analysis
Defining the Service Category
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Beginning a Service Area Competitor Analysis
Defining the Service Category
Determining Service Area Boundaries
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Beginning a Service Area Competitor Analysis
Defining the Service Category
Determining Service Area Boundaries
Service Area Profile
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Beginning a Service Area Competitor Analysis
Defining the Service Category
Determining Service Area Boundaries
Service Area Profile
Service Area Structure Analysis
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Bargaining
Power of
Suppliers
Suppliers
Bargaining
Power of
Buyers
Buyers
Substitutes
Threat of
Substitute
Products or
Services
Rivalry
Potential
Entrants
Rivalry
Among
Existing
Competitors
Threat
of New
Entrants
Services Analysis – Five Forces that Indicate the Viability of a Product or Service
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Service Area Structural Analysis
Porter’s Five Forces
Threat of new entrants to the market
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Barriers to Entry
Existing organizations have economies of scale
High volume, lower costs.
Existing product or service differentiation
It costs a great deal (capital) to get into this type of business
Switching from one service provider to another is expensive
Exclusive access to distribution channels
Current service providers have developed cost advantages independent of scale
There are government or legal constraints
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Service Area Structural Analysis
Porter’s Five Forces
Threat of new entrants to the market
Level of rivalry among existing organizations
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Intensity of Rivalry
Numerous or equally balanced competitors?
Slow market growth for these types of services?
High fixed costs (buildings, equipment)?
Competitors’ products or services are pretty much the same?
Switching from one service provider to another is easy?
Difficult to leave the business once in it?
Competitors place great importance on achieving success?
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Service Area Structural Analysis
Porter’s Five Forces
Threat of new entrants to the market
Level of rivalry among existing organizations
Threat of substitute products and services
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Threats of Substitute Services
Many services available that perform about the same function
There are lower cost substitute services
Buyers of the service tend to experiment or substitute often
Buyers of the service have difficulty in telling the difference in the effectiveness of the alternatives
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Service Area Structural Analysis
Porter’s Five Forces
Threat of new entrants to the market
Level of rivalry among existing organizations
Threat of substitute products and services
Bargaining power of buyers (customers)
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Bargaining Power of Buyers
Buyers of the service purchase in large volume or concentrates purchases
Purchases products that are standard
Buyers view all providers as having about the same service and quality?
Buyers have low switching costs in changing to another provider
Buyers have low profitability or narrow margins
Pose a threat of backward integration
Buyers could begin providing the service themselves?
Buyers has low quality requirements
Has enough information to gain bargaining leverage
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Service Area Structural Analysis
Porter’s Five Forces
Threat of new entrants to the market
Level of rivalry among existing organizations
Threat of substitute products and services
Bargaining power of buyers (customers)
Bargaining power of suppliers
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Bargaining Power of Suppliers
Few suppliers (personnel, equipment, materials)
Few substitutes for the supplies
The supplier’s products or services are unique
The product or service supplied is important to the buyer’s business
Switching costs from one supplier to another are high
The buyer’s industry is not considered an important customer
The suppliers pose a threat of forward integration
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Favorable Forces
If all five forces are favorable:
Little or friendly competition
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Favorable Forces
If all five forces are favorable:
Little or friendly competition
Difficult for new competitors to enter the business
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Favorable Forces
If all five forces are favorable:
Little or friendly competition
Difficult for new competitors to enter the business
Few or no good substitutes for the product or service
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Favorable Forces
If all five forces are favorable:
Little or friendly competition
Difficult for new competitors to enter the business
Few or no good substitutes for the product or service
Buyers will not control the price, quality, design, or volume
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Favorable Forces
If all five forces are favorable:
Little or friendly competition
Difficult for new competitors to enter the business
Few or no good substitutes for the product or service
Buyers will not control the price, quality, design, or volume
Suppliers will not control the inputs to production
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Unfavorable Forces
If all five forces are unfavorable:
A great deal or very unfriendly competition
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Unfavorable Forces
If all five forces are unfavorable:
A great deal or very unfriendly competition
Easy for new competitors to enter the business
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Unfavorable Forces
If all five forces are unfavorable:
A great deal or very unfriendly competition
Easy for new competitors to enter the business
Many good substitutes for the product or service
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Unfavorable Forces
If all five forces are unfavorable:
A great deal or very unfriendly competition
Easy for new competitors to enter the business
Many good substitutes for the product or service
Buyers will control the price, quality, design, or volume
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Unfavorable Forces
If all five forces are unfavorable:
A great deal or very unfriendly competition
Easy for new competitors to enter the business
Many good substitutes for the product or service
Buyers will control the price, quality, design, or volume
Suppliers will control the inputs to production
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Services Analysis A “Three Star” Product or Service
Bargaining
Power of
Suppliers
Suppliers
Bargaining
Power of
Buyers
Buyers
Substitutes
Threat of
Substitute
Products or
Services
Rivalry
Potential
Entrants
Rivalry
Among
Existing
Competitors
Threat
of New
Entrants
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Services Analysis Evolving Products/Services Viability
Bargaining
Power of
Suppliers
Suppliers
Bargaining
Power of
Buyers
Buyers
Substitutes
Threat of
Substitute
Products or
Services
Rivalry
Potential
Entrants
Rivalry
Among
Existing
Competitors
Threat
of New
Entrants
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Services Analysis Evolving Products/Services Viability
Bargaining
Power of
Suppliers
Suppliers
Bargaining
Power of
Buyers
Buyers
Substitutes
Threat of
Substitute
Products or
Services
Rivalry
Potential
Entrants
Rivalry
Among
Existing
Competitors
Threat
of New
Entrants
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Services Analysis Evolving Products/Services Viability
New Regulations or Political Changes
New Technologies or Services Improvement
Social or Demographic Changes
Economic Changes
Competitive Changes
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Beginning a Service Area Competitor Analysis
Defining the Service Category
Determining Service Area Boundaries
Service Area Profile
Service Area Structure Analysis
Competitor Analysis
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Competitor Analysis & Strategic Groups
What are the strengths and weaknesses of your competitors?
Can your competitors be “mapped” with respect to two or more dimensions?
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Competitor Analysis and Mapping Strategic Groups
Competitor Strengths and Weaknesses
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Competitor Analysis and Mapping Strategic Groups
Competitor Strengths and Weaknesses
Service Category Critical Success Factor Analysis
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Beginning a Service Area Competitor Analysis
Defining the Service Category
Determining Service Area Boundaries
Service Area Profile
Service Area Structure Analysis
Competitor Analysis
Map Strategic Groups
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Beginning a Service Area Competitor Analysis
Defining the Service Category
Determining Service Area Boundaries
Service Area Profile
Service Area Structure Analysis
Competitor Analysis
Map Strategic Groups
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Service Area Plastic Surgery Competitors
For the Charlotte service area, a majority of the plastic surgery practices are pursuing one of four basic strategies and, for the most part, do not engage in between-group competition. Strategic groups one and two have some overlap; however, physicians in group two engage in Third World country medical missions. There is considerable within-group competition particularly in group three where there is a focus on luxurious surroundings and personal attention. Non board-certified plastic surgeons are not shown on this map.
Service Area Assisted-Living Competitors
For this service area, assisted living organizations are pursuing four basic strategies: high price with highly specialized services (Strategic Group 1), low price with few ancillary services (Strategic Group 2), medium price with some (selected) services (Strategic Group 3), and high price with many services (Strategic Group 4). The primary (direct) competitors for these organizations are other organizations within their own strategic group. Customers who seek the attributes of one strategic group, such as highly specialized rehabilitation services, are unlikely to be attracted to another strategic group. These assisted-living organizations should change strategic cautiously as a decision to add services may move an organization to a new strategic group and therefore a new set of competitors. Note that in this example there may be an opportunity to enter or move toward a medium-cost, many services niche and become a strategic group of one.
*Range of services included skilled nursing, organized social activities, outings, physical therapy, education, rehabilitation, speech therapy, Alzheimer’s care, nutritional services, infusion, pharmacy, homemaker services, live-ins, companions, and so on.
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Beginning a Service Area Competitor Analysis
Defining the Service Category
Determining Service Area Boundaries
Service Area Profile
Service Area Structure Analysis
Competitor Analysis
Map Strategic Groups
Synthesize the Analyses
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Strategic Thinking Questions Validating the Strategic Assumptions
Is the strategy consonant with the competitive environment?
Do we have an honest and accurate appraisal of the competition?
Have we underestimated the competition?
Has the rivalry in the service category/service area changed?
Have the barriers to entering the service category/service area changed?
Does the strategy leave us vulnerable to the power of a few major customers?
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Strategic Thinking Questions Validating the Strategic Assumptions
Has there been any change in the number or attractiveness of substitute products or services?
Is the strategy vulnerable to a successful strategic counterattack by competitors?
Does the strategy follow that of a strong competitor?
Does the strategy pit us against a powerful competitor?
Is our market share sufficient to be competitive and generate an acceptable profit?
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Chapter 3 Conclusions
After reading Chapter 3, you should be able to define the following terms:
| Key Terms | Key Terms |
| Competitive Advantage | Service Area Profile |
| Competitor Analysis | Service Area Structural Analysis |
| Critical Success Factor Analysis | Service Category |
| Mapping Competitors | Strategic Groups |
| Service Area | Strategic Response |
| Service Area Competitor Analysis |
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Assignment
Service Area Competitor Analysis
For the organization and community you selected in the assignment from Chapter 2, complete the task in the next slide. Specifically:
Identify the service category and service area;
Conduct a Service Area Structural Analysis;
Identify the key competitors and try to list their strengths and weaknesses; and
Group or Map the competitors into strategic groups.
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