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Environmental analysis is necessary to assess the position of healthcare organizations within their areas of operation. A common technique for this assessment is the SWOT analysis that examines the organization, its environment, and how they interact. The analysis considers factors on both the broader social environment and narrower competitive environment. The analysis examines strengths, weaknesses, opportunities, and threats relative to the healthcare organization. This analysis should help the organization in the further development of its strategic plan. The strategic plan developed determines the public perception of the organization. The strategic plan adopted should be able to support the organization’s mission statement and reflects the strategy embodied in the strategic plan.
According to Fortenberry & Fortenberry (2010), the organization’s main strength is the good reputation that it has earned through the provision of quality healthcare to its client. The organization also rides on the excellent location that it is stans because this ensures high accessibility by many people in its catchment. The healthcare unit has a good cash reserve and financial position; this ensures employment of quality personnel and equipment in their service delivery (Fortenberry & Fortenberry, 2010).
The excellent laboratory is a plus in that it ensures proper diagnosis resulting inappropriate treatment. The occupancy rates are good ensuring that they cater to a considerable number of patients. The increasing cost of operating healthcare services results in increased charges to patients, thus reducing the patient numbers. Underutilization of some facilities in the hospital due to administration indecisiveness resulting in the institution incurring losses. Poor relationship among administrative and medical staff hampers service delivery (Fortenberry & Fortenberry, 2010). The board of trustees consists of very old individuals that can come up with innovative ideas that can make the company move forward.
The institution should seize the opportunity to acquire other institutions to spread out its services in the region. Increasing population in this locality means more clients to the institution, so they should come up with a strategy to serve them better (Thomas, 2008). The new businesses that come into the institution’s location offer them the opportunity of serving their workers as corporate clients. The organization should do away with the underutilized sections of the facility by leasing out or selling to interested parties.
The increased government regulation means that the hospital cannot offer other services because it does have prerequisite personnel and equipment (Thomas, 2008). Increasing healthcare costs result in a negative reaction from clients to the institution’s services. Increasing competition from other healthcare players means that the company must enhance its quality and reduce its charges resulting in low-profit margins (Fortenberry & Fortenberry, 2010).
Currently the health institution majors in serving only the local communities especially the outpatient clients. There is a plan to start serving corporate clients with other businesses opening up in the area. They will do this by incorporating company workers into their healthcare program thereby offering them treatment at a negotiated rate. The organization is planning operateting mobile clinics that will be serving patients in rotation from one village to another. This way the organization aims at reaching the weak that cannot travel to their institution facilities (Fortenberry & Fortenberry, 2010).
According to Thomas (2008), the social and consumer factors such as consumer tastes, preference, culture, and personal income influence the consumers’ choice of a healthcare provider. Competitiveness of the organization in price and service quality ensures the continued satisfaction of clients thus their loyalty to the institution. The technological advancement in the flow of information and medical services providers ensures that the institution gives its clients the best medical care at an affordable rate.
Economic factors have both a negative and positive impact on the healthcare service. Factors such as employment, inflation, land values, and the location of the healthcare facility determine how many clients that they receive. Legal and regulatory factors determine the personnel that the institution can employ, funding sources that they can use to expand, and more importantly patient confidentiality (Thomas, 2008). Thereby, the legal and regulatory issues have a substantial impact on the operation of healthcare facilities.
Environmental analysis is the evaluation of the circumstances under which the health care organization is operating or will be carrying out its activities in the future. Environmental analysis helps shape the relationship between the organization’s present and potential capabilities and the needs and desires of the communities they serve (Thomas, 2008). Environmental analysis determines the failure or success of the healthcare organization in meeting its mission, values, and vision. In carrying out environmental analysis, healthcare organizations are able to come with strategies for their survival and prosperity based on their strengths, weaknesses, opportunities, and threats (Thomas, 2008).
Environmental analysis helps in the creation of the organizations’ strategic plans in that it provides direction for the organizations’ present and future healthcare programs. It helps organization focus its efforts on the core activities in the healthcare provision.
The environmental analysis helps the organization has uniform coordination of its programs. Environmental analysis has the potential of helping the organization realize its differentiating values, which make it, stand out from the rest of the organizations (Williamson, Stevens & Loudon, 1997). It helps customize the organization’s promotions in line with its mission, vision, and values. It helps realize the importance of different sections of the organization thus guiding in the allocation of resources. It helps organizations come up with programs that give them a competitive edge in healthcare provision.
Thomas (2008) asserts that incorporation of Competitive analysis in the organization strategic plan helps in the identification of the five competitive forces that might impinge on their performance. These five forces are a threat of entry by a competitor, rivalry intensity amongst existing competitors, pressure from other stakeholders, patients’ bargaining power, and their suppliers’ bargaining power (Thomas, 2008).
Competitive analysis helps come up with strategies to overcome these forces. The organization can adopt overall cost leadership by aggressively constructing efficient facilities, reducing cost, tight control of cost and overhead expenses, and minimization of cost in areas where there are no god returns (Thomas, 2008). The organization should also aim at differentiating itself from the rest by providing something unique to patients. Healthcare can lay emphasis on patient treatment relative to disorders and patient care. The competitive analysis also allows the organization to focus on a narrow segment of the market that they are best in, for instance establishing a clinic dealing with eating disorders(Thomas, 2008).
Economic issues that may potentially affect the healthcare organization strategic plan are changes in personal income, employment, inflation, land values, and location of the healthcare facility. Legal issues that may affect the organization strategic plan are: increased government regulation of the healthcare funding, issues of liability and compensation for improper treatment, privacy and security issues relating to sharing of patient information through electronic exchange, licenser and credentialing, medical device regulation, fraud and abuse, and corporate practice in medicine.
The organization has a strong reputation for providing the population in its locality with high-quality healthcare, and this means that it will continue to have more clients for its current and future services (Schulz & Johnson, 2003). The excellent location of the health facility is making it more accessible to patients because of the excellent infrastructure network (Schulz & Johnson, 2003).
Strong cash reserves and financial position make it possible for the company to invest in state of art equipment and be able to handle exceptional cases, which the neighboring facilities cannot. Above-average occupancy rate allows the facility to serve many members of the society, and this means that they have a bigger share of the market, which can translate to bigger margins for the organization (Schulz & Johnson, 2003). The excellent laboratory used for carrying out various diagnostic tests thus ensuring better diagnosis for better treatment.
The healthcare facility has a strong financial base thereby can invest in innovation, equip their laboratories well, and purchase better pharmaceutical products to serve their clients efficiently (Schulz & Johnson, 2003). The organization can also invest in advanced computer and electronic equipments. The organization has to be involved in the service market development by employing the three generic strategies to respond to competition namely; overall cost leadership, differentiating its services from the others, and focusing on a narrow segment of the market share. To solidify the organization grasp of the market share, they can involve in both vertical and horizontal integration by forming merger and joint ventures.
This can help the health organization in service delivery and marketing (Schulz & Johnson, 2003). Another thing is making sure that the organization’s board has persons with necessary skills and interest that can encourage strategic planning and management, appreciate efforts of the staff, as well as focus on the formulation and implementation of the strategic plans. To avoid incurring cost in underutilized sections of the organization, they should just eliminate them (Schulz & Johnson, 2003).
The first year the hospital wants as to enhance service delivery in its diagnostic imaging, laboratory, and inpatient subdivisions. The diagnostic imaging subdivision will improve through developing a continuous flow through the department, reducing cycle time, increasing equipments uptime, and developing a pull system for reports (Schulz & Johnson, 2003). Laboratory service subdivision will improve by establishing work cells, implementing one-piece flow for specimens, and reducing the changeover time. Improving the inpatient unit will be through the establishment of pull system of beds, reduction of average length of stay in hospital, and reducing rooms’ changeover time (Schulz & Johnson, 2003).
According to Schulz & Johnson (2003), increasing population in the organization’s locality has made it necessary for them to put up more facilities. The facilities should be well equipped to enhance the quality of services that they offer to their clients. The organization should also aim at acquiring more institutions to collaborate with to ensuring availability of their services in various centers. This will increase accessibility and create more job opportunities to members of the community in its catchment area.
According to Williamson, Stevens & Loudon, 1997), for the organization to increase its market share should engage in thorough marketing. The adage “build a better mousetrap and the whole world will beat a path to your door” just never hold. A reliable service is not a guarantee for outstanding results. It requires decent marketing, and the good marketing come because of good marketers. The organization should focus on employing personnel with marketing know how and avail financial resources for marketers to carry out their job to ensure that they thrive. Marketing should be a continuous process (Schulz & Johnson, 2003).
In the second year, the organization wants to launch the adolescent preventing pregnancy program whose objective is that by 2015, reduce pregnancy rates in adolescents by 29% in the surrounding communities. Another objective for the goal of reducing pregnancy rates is that “by 2013” the rate should have reduced by 15% (Schulz & Johnson, 2003). By the third month, 100% of the program staff will have had training on the health education for the program.
In conclusion, strategic plan helps organization align it services to the satisfaction of consumers and to close the gap in service discrepancy with its competitors. Strategic plan help organization rise to its feet when threatened of losing business resulting in diversification to other service provision (Schulz & Johnson, 2003). A strong strategic plan results in stability, internal and external growth, and turnaround on the performance of the organization. With a thorough environmental analysis, organizations can come up with strategic plans that when well implemented ensures long-term success of the healthcare provision to the patients.
References
Fortenberry, Jr. & Fortenberry, J. (2010). Health Care Marketing: Tools and Techniques. Ontario: Jones & Bartlett Learning.
Schulz, R. & Johnson, A. (2003). Management of hospitals and health services: strategic issues and performance. Washington: Beard Books.
Thomas, R. (2008). Health Services Marketing: A Practitioner’s Guide. New York: Springer science + business media.
Williamson, S., Stevens, R. & Loudon, D. (1997). Fundamentals of strategic planning for healthcare organizations. New York: Routledge.
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