S.W.O.T.Analysis for Community South Medical Center

For this assignment, using the situation given below, apply the S.W.O.T. Situational Planning Strategy which was described in Chapters 4 and 7 of your course text: Situation: You are the C.E.O. of Community South Medical Center, a large, urban for-profit healthcare facility. This institution has comprehensive health services including acute care, residential care, independent living, in-home nursing, hospice, neonatal, and pediatric services, advanced cardiac services, a major trauma center, a center of excellence for pulmonary services, and a neurosurgery center. Community South Medical Center has a positive bottom line and is striving to enhance health services for the population it serves. The patient care mix has shifted in the last three years and its reimbursement source is currently: 25% Medicaid (up 20%); 35% Medicare (down 12 %); 25% employer sponsored health insurance (unchanged), 8% managed care (down 20 percent), 4% private pay (unchanged) and 4% no-pay (up 25%). The Medical Center is in an older urban area. Businesses with well-paying jobs have gradually been replaced by smaller shops and other small businesses. Overall, the community is trending towards a predominantly elderly population. The Medical Center has an excellent reputation and has been recognized in the past by receiving a Baldrige Center of Excellence evaluation and a The Joint Commission (T.J.C.) approval for their quality of services; however, recent self-inspections indicated a slight decline in compliance with T.J.C. standards. Patient satisfaction survey results have an overall mean of 95 percent. The medical staff strongly supports new program development and there is an abundant supply of physicians. Currently, the major issues confronting the Community South Medical Center are: an identified shortage of clinical staff including registered nurses, respiratory therapists, and medical technologists; non-interfacing information technology systems; antiquated facilities and infrastructure; decline in T.J.C. compliance on internal audits; and a shift to its financial mix. Action: As the C.E.O., it is time to embark on the annual updating of the organization's strategic plan. The last major revision to the strategic direction was completed three years ago. In a four- to six-page (excluding title and reference pages) double-spaced paper, consider and respond to the following points: Select one of the needs of Community South Medical Center and identify at least one strength, one weakness, one opportunity, and one threat (S.W.O.T.) for that need. How do each of these (e.g., the strength, the weakness, the opportunity, and the threat) correlate to the overarching issues confronting Community South Medical Center? Is it time to revise the strategic mission and plan of the organization from three years ago or continue as originally planned with a yearly assessment? Should the C.E.O. address the issues confronting Community South Medical Center or wait another year? If so, what should the strategic plan be? If not, why? What leadership positions would be a part of your strategic management team? Why? What would each of their responsibilities entail? What are some of the market trends you can identify in this area? How might they affect Community South Medical Center? How would you prepare for them? You must use a minimum of four scholarly sources, excluding the course text, cited according to APA format as outlined in the Ashford Writing Center. Your paper and all sources must be formatted according to APA style. Carefully review the Grading Rubric for the criteria that will be used to evaluate your assignment. Chapter 4 rganization's leaders have agreed to adopt a mission statement, vision statement, and set of strategic goals, the strategic planning process can commence. Strategic planning is the development of a plan that integrates all organizational activities into a coherent course of action (Bedeian, 1986, p. 100). The strategic planning process involves the completion of four primary tasks: Analysis and diagnosis—strengths, weaknesses, opportunities, threats (SWOT) analysis Generating strategic alternatives Strategy evaluation and choice Strategy implementation Successful strategic planning begins with analysis and diagnosis. During this stage, top management often assesses two main sets of factors prior to considering any strategic alternatives. The SWOT model, which was briefly introduced in Chapter 1, offers one common method of investigating two key elements: internal company operations and the external environment. Examination of internal operations yields understanding of the organization's strengths and weaknesses (the SW in SWOT). Analysis and diagnosis of the external environment reveals opportunities and threats (the OT). Analysis and diagnosis of the organization's strengths and weaknesses requires managers to take a step back to avoid "turf wars," "empire building," and other forms of political activities that would disrupt the objective evaluation of operations. Table 4.3 provides areas that managers should consider when carrying out the "SW" part of analysis and diagnosis. Table 4.3 Internal assessment of strengths and weaknesses Department Factors to consider Production Quality of medical care Efficient delivery of services Follow-up after patients leave Marketing Advertising programs Community relations Public relations activities Community support Outreach and screening programs Finance Ability to acquire equipment Ability to upgrade facilities Accounting On-time and accurate billing practices On-time and accurate payment methods Human resources Relationships with physicians Satisfaction indicators of internal staff (e.g., rates of absenteeism, tardiness, turnover, accidents, grievances, vandalism) Research and development Methods of diagnosis Treatment programs Medicines Surgical instruments Chapter 1 outlined an analysis of semicontrollable and noncontrollable forces in the external environment. Semicontrollable forces affecting healthcare comprise patients or customers, suppliers, the local community, financial institutions, unions, and stockholders or partners. Noncontrollable forces are the political, social, economic, technological, and competitive factors that healthcare managers study and create responses. The combination of these factors results in the potential combinations displayed in Table 4.4 (Boston Consulting Group, 1970). Table 4.4 Outcomes of a SWOT analysis Internal company Strengths Weaknesses External environment Opportunities Pursue with a strategy Consider investing resources in order to pursue with a strategy Threats Monitor for change Create a strong strategic response Source: Adapted from Boston Consulting Group, 1970. As shown in the table, when the external environment offers an opportunity in an area in which the organization is strong, it makes sense to consider developing strategies to take advantage of the situation. Should the environment present an opportunity in which the hospital or healthcare provider has weaknesses, managers may consider investing funds to create a stronger internal operation and then pursue a strategy related to the opportunity. For example, if the population of a small suburban community were to suddenly and dramatically increase (an opportunity), and the local hospital has an effective top management team, then the organization's leaders might consider a diversification strategy. This strategy might involve adding new specialties, such as a heart center, birthing center, or cancer center, in order to increase revenues and grow the size of the organization. In the same setting, if the hospital were to experience difficulties in attracting physicians to work for the organization or to seek privileges in that facility, the management team might consider finding ways to improve recruiting programs in order to strengthen the internal organization. This would then allow the hospital to grow to accommodate the needs of an increasing population. When the environment presents a threat in an area of company strength, the management team will often continue to assess the situation before taking any major strategic action. If, however, the threat is powerful in an area of organizational weakness, a strategic response would be required; without such a response the organization may not survive. For example, a turbulent financial environment characterized by rising unemployment and high interest rates on debt could strongly threaten a healthcare facility facing cash flow and liquidity problems. In that circumstance, a response such as a merger with a more financially sound organization may be the only way to continue operations (Robbins & Coulter, 2012, p. 228). Industry Analysis and the Five Forces Framework In addition to a SWOT analysis, managers in healthcare settings may also use the Five Forces Framework. The approach, as developed by Michael Porter (1980), outlines industry-specific factors that influence the management of an organization—in this case, a healthcare operation. The five factors are the threat of new entrants, barriers to entry, the degree of substitution possible, supplier power, and buyer power. These five factors combine to indicate the level of industry intensity or rivalry, which summarizes the degree of competition for customers (in this instance, patients and "market share"). Industry intensity poses the greatest potential threat to an organization. The stronger the level of rivalry, the lower revenues and potential profits become. Four structural factors within the industry determine the degree of industry intensity or rivalry: (1) the threat of new entrants, (2) the degree of substitution possible, (3) supplier power, and (4) buyer power. New entrants create rivalries because they can reduce the market share held by established organizations, which in turn increases price competition (lowering charges for medical services so that patients won't leave). At the level of an individual physician's practice, the threat of new entrants, or new doctors offering the same services, constitutes the primary threat. As organizations increase in size, such as large community hospitals, the potential for new entrants lessens. Barriers to entry, or the influences that prevent new competitors from entering a market, occur at this level due to the factors displayed in Table 4.5 The degree of substitution present either allows or restricts patients from seeking the same or a similar service from another organization. For example, if a community has numerous physical rehabilitation providers, patients enjoy additional choices in selecting the facility to attend. The presence of substitutes drives down prices and increases competitive rivalry. Conversely, higher switching costs (the amount a person pays to change providers, in terms of time, money, and effort to transfer medical records) lower competitive rivalries. Supplier power results from an organization's exclusivity in providing a product or service. When a pharmaceutical company develops a superior medicine that no other company provides, supplier power reaches a maximum. The same holds true for any manufacturer of advanced medical equipment. Logically, suppliers seek to keep prices higher, which can reduce competitive rivalries among providers offering the item. Table 4.5 Factors influencing the potential for new entrants Factor Description Economies of scale The hospital delivers the same service to a large number of patients, which means fixed costs can be allocated to a large number of people. Government restrictions Local and state boards may limit the number of licenses to practice in a geographic area. Brand power Local patients become loyal to a given facility. Exclusive or long term agreements These agreements include contracts with physicians, other organizations, and suppliers. Threat of retaliation Existing healthcare facilities may take action to challenge new entrants. Buyer power arises when consumers (patients) experience alternative choices. An individual who believes a choice exists between chiropractic care and other forms of medical service providers enjoys buyer power. When groups of consumers hold the same power, competitive rivalries increase, and amounts charged for services tend to become lower. In addition, nonmarket structural characteristics affect competitive rivalries. These characteristics include levels of fixed costs, the presence of excess capacity, product similarity or differentiation, and the nature of the sales process (Porter, 1980; Luke, Walston, & Plummer, 2004). Excess capacity drives down the prices that organizations can charge, thereby increasing competitive rivalries. The same takes place when products are similar—prices become reduced as rivalries rise. Certain sales procedures also intensify competition. At the completion of a SWOT analysis or a competitive analysis featuring the five main forces, healthcare executives should have a solid understanding of the organization's current position with regard to internal activities, the industry, and the organization's external environment. At that point, it should be possible to select potential strategies to consider. Couldn't get chapter 7, but if you can find it the name of my text book is: Baack, D. E. & Fischer, A. (2013). The essentials of managing in the healthcare industry. San Diego, CA: Bridgepoint Education, Inc. Thanks