Professional Documents
Culture Documents
HMP 4600
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Expansion of scope strategies (diversification (related, unrelated, concentric), market
development, vertical integration, focused factory, product development, penetration
strategy)
o Diversification selected because markets have been identified outside of the
organizations core business that offer potential for substantial growth. Often seen
as risky. 2 types
Related (concentric) organization chooses to enter a market that is
similar or related to its present operations
Unrelated (conglomerate) organization enters a market that is unlike its
present operations
o Market Development a divisional strategy used to enter new markets with
present products or services. Designed to achieve greater volume through
geographic (service area) expansion or by targeting new market segments within
current service area
o Vertical integration a decision to grow along the channel of a distribution of the
core operations.
Backwards is when an organization grows along the channel distribution
toward its suppliers
Forward is when an organization grows towards its consumer or patient
o Product development the introduction of new products/services to present
markets (geographic and segments). Typically, product enhancements and product
line extension
o Penetration an attempt to better serve current markets with current products or
services through promotion, distribution, and pricing
Reduction of scope strategies (Divestiture, Liquidation, Harvesting, Retrenchment)
o Divestiture an operating strategic service unit is sold off as a result of a decision
to permanently and completely leave the market despite its current viability (and
will typically be operated by the organization that purchases it). Could be total or
partial
Final Exam Study Guide
HMP 4600
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Adaptive strategies (exhibit 6.3, 6.5)
Vertical integration (forward and backward) - up above
Market entry strategies (exhibit 6.3, 6.10)
Purchase strategies (Acquisition vs licensing)
o Acquisition strategy to grow through the purchase of an existing organization,
unit of an organization, unit of an organization, or a product/service
o Licensing acquiring or providing an asset (technology, market, equipment, etc.)
through contract
Cooperation strategies (Mergers definition, motives, challenges; Alliances, Joint
ventures definition, organizational forms etc.)
o Merger combining two (or more) organizations through mutual agreement to
form a single new organization
Advantages
Uses existing resources
Retains existing markets and products
Reduces competition
Disadvantages
Takes a long time to merge cultures
Final Exam Study Guide
HMP 4600
Shining stars: high market growth and high market share and high
profitability. Best situation for HCO
Cash cows: low market growth but high market share and high
profitability
Healthy children: high market growth, low market share and high
profitability.
Faithful dogs: low market growth and low market share but have been
profitable
Black holes: high growth and high market share but low profitability
Problem children: low share, high growth and low profitability
Cash pigs: high share, low growth and low profitability
Mangy dogs: low growth, low share, poor profitability
Strategic Position and Action Evaluation
o An extension of two-dimensional portfolio analysis (BCG) and is used to
determine the appropriate strategic posture of the organization. SPACE analysis
suggests the appropriateness of strategic alternatives based on factors relating to
four dimensions: service category strength, environmental stability, the
organizations relative competitive advantage and the organizations financial
strength.
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Q-sort program
Final Exam Study Guide
HMP 4600
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Final Exam Study Guide
HMP 4600
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Re-engineering a total redesign of a process
Evaluation of external conditions, resources, competencies and capabilities for strategic
postures (exhibit 7.18, 7.19)
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Final Exam Study Guide
HMP 4600
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o External conditions are very important in the selection of strategic posture.
Defender strategies tend to be successful when the external environment is
relatively stable (change is slow and reasonably predictable). Prospectors operate
well in rapidly changing, turbulent environments. Analyzers operate well in
environments where there is moderate change with some product categories that
are quite stable and some that are changing. For the defender posture the
organization must be able to develop a core technology and be very cost efficient.
Defender organizations try to drive costs down through vertical integration,
specialization of labor, a well-defined organization structure, centralized control
and standardization, and cost reduction while maintaining quality. Prospectors, on
the other hand, are continuously moving in and out of products and markets
looking for high growth. Therefore, they need organization structures, systems,
and procedures that are flexible. Prospectors rely on decentralized control. These
types of organizations do not concentrate on developing efficiency but, rather,
focus on the development and early adoption of new products and services.
Analyzers attempt to balance defender strategies in stable markets with some
prospecting in selected developing markets. Managing these organizations is often
Final Exam Study Guide
HMP 4600
difficult because they must mix high levels of standardization and routinization
with flexibility and adaptability.
Evaluation of external risks, resources, competencies and capabilities for positioning
strategies (exhibit 7.20, 7.21)
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Benchmarking - specific measures comparing the organization with its competitors on a
set of key variables
Final Exam Study Guide
HMP 4600
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BCG portfolio matrix (exhibit 7.5; can also refer Wayland Ch. 12)
Final Exam Study Guide
HMP 4600
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Program Evaluation (definition, Needs/capacity assessment, community need,
organizational capacity, exhibit 7.13)
o Community need is a function of
clear community requirements (environmental, sanitation, disease control
etc.) and personal health care (primary care) gaps
degree to which other institutions (private and public) fill the identified
health care gaps
public/community health objectives
o Organizational capacity is the organizations ability to initiate, maintain, and
enhance its set of adaptive strategy programs. Organizational capacity is
composed of
funding to support programs
other organizational resources and skills
programs fit with the mission and vision of the organization
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Pre-service activities and minimum conditions for maintaining / changing pre-service
activities
o Market and marketing research
o Identifying the target market
o Services offered
o Branding
o Pricing distribution/logistics
o Promotion
o Maintain pre-service activities
Engage in periodic customer focus groups and market research to
understand the wants, needs, and desires of the organizations target
markets and whether they are or are not being satisfied
Monitor the demographic, psychographic, and health status characteristics
of the service area (with particular attention to trends in the target markets)
Continually communicate to physicians, patients, third-party payers, and
others concerning the type and range of services offered, pricing, and
branding
Monitor promotional effectiveness and customer ease of system entry
(logistics)
o Change pre-service activities
Change the services attributes to better match the expectations of the
target market
Final Exam Study Guide
HMP 4600
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Process of developing value-adding strategies (exhibit 8.3) -Process of a Service Area
o What actions are required to accomplish unit objectives? In what sequence should
the actions be accomplished?
o Who will be responsible for accomplishing each action by the designated time?
o What organizational resources will be required to accomplish each action in a
timely manner?
o How will results be measured?
Budget requests make sure to have beginning and ending dates
o Identify actions to achieve objectives
o Develop timelines for actions
o Assign responsibility for actions
o Assign reporting responsibility
o The expected revenues as well as costs and other resources associated with
achieving each activity must be determined to estimate any additional resources
needed so they can be incorporated into the units budget requests
Seven deadly sins that doom effective strategy
o The strategy is lacking in terms of rigor, insight, vision, ambition, or practicality.
o People are not sure how the strategy is to be implemented.
o The strategy is communicated on a need to know basis rather than freely
throughout the organization
o No one is responsible for every aspect of strategy implementation.
o Leaders send mixed signals by dropping out of sight when implementation begins.
o Unforeseen obstacles to implementation will inevitably occur. The responsible
people should therefore be prepared for these barriers and be encouraged to
overcome them in creative and innovative ways
o Strategy becomes all-consuming and details of day to day operations are lost or
neglected. Strategy is important, but so are operations
Contingency planning definition and seven steps
o Contingency plans are alternative plans that are put into effect if the strategic
assumptions change quickly or dramatically, or if organizational performance is
lagging.
o Are tied to key issues or events occurring or not occurring.
o Seven steps
Identify both favorable and unfavorable events that could possibly derail
the strategy or strategies.
Specify trigger points. Calculate a likely timetable for contingent events to
occur.
Assess the impact of each contingent event by estimating the potential
benefit or harm.
Develop contingency plans. Be sure that contingency plans are compatible
with current strategies and are economically feasible.
Final Exam Study Guide
HMP 4600