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Core Strategic Concepts

Essay Instructions:

Explain the differences between vertical, horizontal, and diversified expansion.

Research one large health care system.

1. Identify its core business and any diversified organizations.

2, Identify if the health care system is practicing related or unrelated diversification.

3. Explain how the organization's strategy reflects its mission and vision.

Utilizing the following reference in addition to at least two more.

Walston, S. L. (2018). Chapter 4: Growth and integration strategies. In Strategic healthcare management: Planning and execution (2nd ed).

Essay Sample Content Preview:

Core Strategic Concepts
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Core Strategic Concepts
Differences between Vertical, Horizontal, and Diversified Expansion
“Vertical expansion” is a business plan in which a company grows by entering new markets at different points along the “value chain.” Forward integration which is also part of vertical expansion, is when a business buys or opens up new distribution channels or places of sale to get its products to customers more quickly (Harrison, 2021). When a company starts doing things that its providers once did, this is called “backward integration.”
“Horizontal expansion” means growing a business’ operations without joining a new market. Most of the time, this means working together with another company that sells or makes something related. When expanding into nearby areas, businesses can get a more significant foothold and more benefits from economies of scale.
“Diversified expansion” means a business moves into new areas or markets. Diversification can be “related,” where the new projects fit in with the existing business, or “unrelated,” where they do not. Every growth plan has pros and cons (Walston, 2018). Choosing the right one will depend on the company’s goals, willingness to take risks, resources, and the nature of the competition.
Healthcare System and Core Business
UnitedHealth Group is a healthcare conglomerate operating in the United States. The vast majority of UnitedHealth Group’s activities revolve around the delivery of medical care to patients. The company’s offices are in the United States, which gives customers a wide range of ways to get help. Its main business is running health insurance and managed care services. This is done by United Healthcare, which is a subsidiary that the company owns in its entirety. This company has a wide range of health insurance plans and other benefits for people and businesses.
Diversified Organization
The attempts of the parent business, UnitedHealth Group, to broaden its commercial reach have been significantly aided by Optum, a subsidiary of UnitedHealth Group. Because the company uses decentralized systems, these initiatives have been made possible (Harrison, 2021). Optum is a corporation that provides a wide variety of alternatives, not only in medical treatment but also in information technology. Some services that are available here include pharmaceutical benefits management, healthcare counselling, data analytics, and technological assistance. Other examples of what is available here include these.
UnitedHealth Practice
Optum, one of UnitedHealth Group’s subsidiaries, is involved in the healthcare industry in general; the company’s diversification strategy can be understood to be related. Even though health insurance, managed care (UnitedHealthcare), and health services and technology (Optum) are two distinct but related healthcare business areas; they are interconnected.
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