Académique Documents
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Initiatives by the institute for Healthcare Improvements Idealized Design of clinical office practice and Dartmouth-Hitchcock Medical Centres efforts to understand clinical microsystems have encouraged physicians around US to redesign their practices and come closer to the ideal. Methods adopted from automobile industry Lean Design and Lean thinking It involves seeing organization as a value chain each activity/ process should add value for patients
Methods adopted from automobile industry Lean Design and Lean thinking It involves seeing organization as a value chain each activity/ process should add value for patients
MUDA 7 wastes
8th Waste:
Learning Objectives
Understand the role of internal environmental analysis in identifying the basis for sustained competitive advantage. Describe the organizational value chain, including the components of the service delivery and support activities. Understand the ways in which value can be created at various places in the organization with the aid of the value chain. Use the value chain to identify organizational strengths and weaknesses
Learning Objectives
Determine the competitive relevance of each strength and weakness with the aid of a series of carefully formulated questions. Describe how competitively relevant strength and weaknesses can be used to suggest appropriate strategic actions.
A stable environment allowed static strategies to be successful. In todays environment, the ability to develop a sustained competitive advantage is increasingly rare. Sustained competitive advantage is the direct result of an enduring value. This reality makes internal environmental factors important.
They must anticipate what the rapidly changing environment will be like. Traditionally, the focus has been on strengths and weakness. organizational
Internal environmental analysis is much like external environmental analysis except the focus in on the organization rather than environmental forces.
PRE SERVICE Market/Marketing Research Target Market Services offered/ Branding Pricing
POINT- OF SERVICE Clinical Operations Quality Process Innovation Marketing Patient Satisfaction
A D D V A L U E
A D
V A U E
Support Activities
If the organizational culture is service oriented patients can feel it when they walk in the door. The organizational structure can increase the patient satisfaction by effectively and efficiently facilitating the service delivery. Structure should have enough standardization and enough flexibility. Strategic resources are important to overall perception of value- employees with proper skills, up to date information system, accessible parking lot etc has positive impact on patient satisfaction. Goals, values and behaviors of all employees must be integrated towards the common objective of patient satisfaction
offered/ Information dissemination to present to prospective patients and other stakeholders regarding the range of available services. Pricing Charge schedule for available services Distribution/ Logistics Activities and systems that facilitate patient entry into the service delivery system including appointments and registrations Promotion Activities that ensure all the elements needed to deliver health services are available at the appropriate place at appropriate time
Activities to offer new products, seek new customers, provide better services delivery and cause services to be perceived as higher value.
Chain Description The guiding principles of the organization and its employees. The understanding people in the organization have regarding excellence, risk taking, etc. Understandings about behavior in the organization that can create value for patients. Those aspects of organization structure that are capable of creating value for customers/ patients Structure based on process or activities used by employees (e.g. surgery, finance, human resource)
Behavioral norms
Chain Description Major units operate relatively autonomously (e.g. hospital division, outpatient division, northwest division) Two dimensional structure where more than the single authority structure operates simultaneously. (e.g. interdisciplinary team with representatives from medicine, nursing, administration) Value creating financial, human, information resources and technology necessary for the delivery of health services. Financial resources required to provide the facilities, equipment, specialized competencies.
Matrix
Strategic Resources
Financial
Chain Description Individuals with the specialized skills and commitment to deliver health services. Hardware, software and information processing system needed to support the delivery of health services. The facilities and equipment required to provide health services
Information
Technology
Strengths and weaknesses are easier to identify if one thinks in terms of organizational resources, competencies and capabilities.
A. RESOURCES
The resource based view of strategy argues that valuable, expensive or difficult to copy resources provide a key to sustainable competitive advantage. Resources are the stocks of human and nonhuman factors that are available for use in producing goods and services. Resources may be tangible, as in case of land etc. and may be intangible e.g. intellectual property, reputation, and goodwill. Robert Kaplan and David Norton point out that unlike financial and physical resources intangible resources are hard for competitors to imitate. Thus making them powerful source of sustainable competitive advantage.
A. RESOURCES
Furthermore, according to a Harris Interactive Health Care Poll, a good reputation and trusted physicians recommendation are two of most important indicators of quality of medical care. These factors ranked above more tangible indicators of resources, including location, appearances, etc,
B. COMPETENCIES
Competency is defined as knowledge and skills that may be a powerful source of sustained competitive advantage. It is about ideas and intellectual know-how. The organization must possess threshold competencies- the minimally required knowledge and skills necessary to compete in a particular area. E.g. all organizations offering cardiac services may possess threshold competencies, but only one or two will develop the knowledge and skills to the point that it becomes distinctive competency.
C. CAPABILITIES
Capabilities are a health organizations ability to deploy resources and competencies, usually in combination. Coordination of resources and competencies is another potential source of sustained competitive advantage. Some assets never create value by themselves, they need to be combined with other assets. E.g. investment in IT (a resource) have little value unless complemented with effective HR training (competencies)
C. CAPABILITIES
It is likely that two or more organizations competing in the same health care market could have same resources and competencies. In such case, competitive advantage is likely to be the result of different capabilities a unique culture, strategic leadership, set of processes.
PRE SERVICE
POINT- OF SERVICE
AFTER SERVICE
ORGANIZATIONAL CULTURE
ORGANIZATIONAL STRUCTURE
Imitable
Organizational Strengths
Strengths must have value, be rare, be difficult to imitate and be sustainable in order to create competitive advantage. Competitive relevance is determined by critically considering four important questions;
Question of Value: Is the resource, competency, or capability of value to customers? Question of Rareness: Is this organization the only one that possess the resource, competency and capabilities or do many or all of its competitors possess it? Question of Imitability: Is it easy or difficult to duplicate the resource, competency or capability? Question of Sustainability: Can the resource, competency or capability be maintained over time?
Strategic Thinking Map for the possible combinations of 4 questions regarding strengths and implications
Is the Is the Value of strength Strength rare (Y/N) High or Low (H/L) H N Is the strength easy or difficult to imitate (E/D) E Can the Implications strengt h be sustaine d (Y/N) Y No competitive advantages. Most competitors have the strength and those that do not can develop it easily and sustain it. Because the strength is widely possessed and can be sustained it is likely that it already has become a minimum condition for long term success.
Strategic Thinking Map for the possible combinations of 4 questions regarding strengths and implications
Is the Is the Value of strength Strength rare (Y/N) High or Low (H/L) H N Is the strength easy or difficult to imitate (E/D) E Can the Implications strengt h be sustaine d (Y/N) N No competitive advantages. Most competitors have the strength and it is easy to develop. However, the strength generally is not sustainable. If the organization is the only organization in the service area that cannot sustain the strength, it will become a short term competitive disadvantage.
Strategic Thinking Map for the possible combinations of 4 questions regarding strengths and implications
Is the Is the Value of strength Strength rare (Y/N) High or Low (H/L) H N Is the strength easy or difficult to imitate (E/D) D Can the Implications strengt h be sustaine d (Y/N) Y No competitive advantages. Many competitors possess the strength but it is difficult to develop, so care should be taken to maintain this strength. Because the strength is widely possessed and can be sustained, it is likely that it already has become the minimum condition for long term success.
Strategic Thinking Map for the possible combinations of 4 questions regarding strengths and implications
Is the Is the Value of strength Strength rare (Y/N) High or Low (H/L) H N Is the strength easy or difficult to imitate (E/D) D Can the Implications strengt h be sustaine d (Y/N) N No competitive advantage. Many competitors possess the strength but it is difficult to develop and those who do possess it will not be able to sustain the strength. If the organization is the only organization that cannot sustain the strength it will become the long term competitive disadvantage.
Strategic Thinking Map for the possible combinations of 4 questions regarding strengths and implications
Is the Value of Strength High or Low (H/L) H Is the strength rare (Y/N) Is the Can the Implications strength strength easy or be difficult to sustaine imitate d (Y/N) (E/D) E Y Short term competitive advantage. Because the strength is valuable and rare, competitors will do what is necessary to develop this easy to imitate strength. The organization should exploit this short term advantage but should not base the long term strategies on this type of strength. Overtime, this strength may become a minimum condition for long term success.
Strategic Thinking Map for the possible combinations of 4 questions regarding strengths and implications
Is the Value of Strength High or Low (H/L) H Is the strength rare (Y/N) Is the Can the Implications strength strength easy or be difficult to sustaine imitate d (Y/N) (E/D) E N Short term competitive advantage but not a source of long term competitive advantage. The strength is easy to imitate but cannot be sustained. The organization should not base long term strategies on this type of strength but may obtain benefits of short term advantage.
Strategic Thinking Map for the possible combinations of 4 questions regarding strengths and implications
Is the Value of Strength High or Low (H/L) H Is the strength rare (Y/N) Is the Can the Implications strength strength easy or be difficult to sustaine imitate d (Y/N) (E/D) D Y Long term competitive advantage. This strength is rare in the service area, difficult to imitate by competitors, and can be sustained by the organization. If the value is vary high, it may be worth betting the organization on this strength. Short term competitive advantage but not a strength that can be sustained over the long run.
Strategic Thinking Map for the possible combinations of 4 questions regarding strengths and implications
Is the Value of Strength High or Low (H/L) Is the strength rare (Y/N) Is the Can the Implications strength strength easy or be difficult to sustaine imitate d (Y/N) (E/D) Although rare and difficult to imitate, the strength cannot be sustained. This strength should be exploited for as long as possible.
How to chart value creating strengths and value reducing weaknesses (e.g. of one component from Medtronics)
Value Chain Component Service Delivery Pre-service Reputation as leading biomedical engineering company Established presence in the market Founded in 1949 Market leader in selected segments (e.g. implantable cardiac rhythm devices) Operations in more than 120 countries world wide Vulnerability to diverse cultural mores and regulatory constraints. Subject to high risk of litigation over patents, trademarks and product liability claims. Value creating Strength Value Reducing Weakness
Strategic Thinking Map for the possible combinations of 4 questions regarding weaknesses and implications
Is the Weaknes s of High or Low (H/L) Is the weakness Common (Not Rare) among competitor s (Y/N) Y Is the weakness Easy or Difficult to correct? (E/D) E Can Implications competito rs sustain their advantage ? (Y/N) Y No competitive disadvantage. Although a weakness of the organization, most other competitors are also weak in this area. However the weakness is easy to correct and competitors will likely work to correct the weakness. If organization fails to correct weakness, competitors could achieve a short term competitive advantage. Can become minimum condition for long term success
Can Implications competito rs sustain their advantage ? (Y/N) N No competitive disadvantage . Other competitors are also weak. Easy to correct. Most competitors are likely to work to correct the weakness. Therefore no organization can sustain their advantage. No competitive disadvantage. Most other competitors are also weak. Difficult to correct. However, situation is dangerous. Important to ensure that competitors dont overcome this first. If competitors correct the weakness and continue to sustain their advantage the weakness could become long term competitive disadvantage.
Can Implications competito rs sustain their advantage ? (Y/N) N No competitive disadvantage . Most other competitors are also weak in this area. Difficult to correct. Chronic, almost all competitors have it. Corrections in the weakness tend to erode over time. Short-term competitive disadvantage. Most competitors not weak in this area. Easy to correct. Organization should correct it quickly. Correcting is likely to become a minimum condition for long term success.
Can Implications competito rs sustain their advantage ? (Y/N) N Short term competitive disadvantage. Competitors not weak in this area. Weakness easy to correct. Organization should move quickly to correct it. Likely that all competitors correct it and therefore cannot sustain any advantage. Serious competitive disadvantage. Weakness is valuable, most competitors do not have it. Difficult for organization to correct it. Competitors can sustain their advantage. May threaten the survival of the organization.
Can Implications competito rs sustain their advantage ? (Y/N) N Short term competitive disadvantage. Weakness is valuable, most competitors do not have it. Difficult for organization to correct it. However, competitors cannot sustain the advantage. Until it becomes the weakness for most competitors in service area or weakness corrected by the organization., it will continue to be a Serious disadvantage.
Weaknesses Ongoing legal claims that could prove a threat to financial viability Settlements agains the company could result in serious financial consequences
Careful analysis of the internal environment provides a better understanding of where strategic leaders should focus their efforts. Where they should be careful to avoid vulnerability relative to competitors It is not possible to be everything to everyone.