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Health Strategic Plan: Health Organization Essay

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Updated: May 11th, 2022

The strengths of the health firm emanate from its internal environment. First, the health corporation is a dominant provider of health services in the industry and it is able to operate at a large scale while realizing economies of scale. Dominance comes with other benefits such as enjoying a large market share compared to its competitors. The market of the firm covers a large region with its facilities being distributed in many locations to serve many patients (Hill & Jones, 2009, p. 162). Due to its dominance, the health organization enjoys a strong brand that is comprised of many services and health products that are in constant consumption by its customers. These include high quality health services not only from qualified, but experienced doctors and provision of high quality original drugs.

Weaknesses

The weaknesses of the health corporation emerge from its internal environment just like the company’s strengths. To begin with, the company is operating in an industry that is saturated domestically and the firm needs to establish other markets other than its current markets. However, there are insufficient funds that can enable the firm meet this objective. The inadequacy of the funds could be partly attributed to the low level of net cash flows. The level of cash flows has reduced due to many factors such as increased competition. In addition to the low cash flows, the health organization is experiencing increasing costs of operation that arises from the products it uses and the high employee salaries (Hill & Jones, 2009, p. 178).

Opportunities

The opportunities of the health organization exist in the external environment and it is important that the firm becomes the first to spot the opportunities, be unique and take action. Some of the existing opportunities include increasing healthcare spending and the ability of the firm to grow and expand. The increased availability of healthcare implies that the organization can rely on the funds to meet the patient’s bills, which in turn could increase the level of cash flows (Hill & Jones, 2009, p. 187). The firm is now able to undertake some medical activities for its patients that were very costly that the patients could not afford. Concerning growth, the healthcare organization is in a strong position to grow and expand out of its current saturated markets.

Threats

The threats affecting the healthcare corporation are mainly found in the external environment. First is increasing medical costs that cannot be offset by the patients and the Medicare fund combined especially for complicated cases in which the hospital has no otherwise but subsidize its charges in order to save lives. Second, there is a shortage of medical practitioners in the market and the available ones are demanding a high pay that has increased the costs incurred by the firm thereby limiting its financial capability. Increasing shortage will affect the liquidity of the firm and the long term effect is that the firm could be drive out of the market (Lawrie, 2005, p. 145).

Present and Prospective Customers of the firm

The current market of the firm comprises of its existing patients that are treated for various ailments. This market includes all customers existing in its current markets covered by its facilities. However, the firm could increase its presence into other markets through mergers and acquisition whereby it will target potential patients.

PESTEL Analysis

Beginning with the political environment, the country’s political environment is very stable and does not pose any threat to the firm, but provides it with an opportunity to perform its duties. Economically, the country is recovering from the effects of the global financial crisis and it is yet to grow exponentially. However, the economic recovery offers the firm with increased activity with many patients visiting the hospital for various ailments.

The consumer and social environment is very accommodating since the firm is familiar with the peoples’ culture. Technologically, there are new equipments manufactured with the latest technology that are able to perform various hospital activities effectively. However, the poor financial performance of the corporation hinders the firm from purchasing such equipments as they are costly. As the firm operates, it has to adhere to all health regulations in all the regions and states it operates especially new regulations on Medicare. When the firm expands, it also has to abide by regulations in the countries of operation (Swayne, Duncan & Ginter, 2009, p. 76).

Significance of Environmental Scan to the Health Corporation

This environmental scan is very significant to the strategic plan because it helps the firm establish its ability to accomplish its objectives. One of the objectives of the health corporation is to be the best health care provider with the best quality of services and products. After analysis of the examination of the external environment, it is clear that the hospital has to acquire the best equipment with the latest technology even though they are costly. This will help the firm establish its competitive advantage and thereafter maintain its dominance in the market. The PESTEL analysis can enable the firm establish the legal regulations it has to adhere to if it has to expand its operations such as selling of original drugs of high quality among others. These factors will help the firm meet its mission and goals of growth.

Responses to Internal and External Environment Alterations

The business environment is challenging. However, the availability of an environmental scan enables the health organization to respond to changes while overcoming the challenges. For instance, the challenge of increased competitiveness could be well handled by high quality that originates from qualified medical personnel hired form the labor market and purchase of modern technology equipment.

A Three Year Plan

  • Year 1: the goals for the first year are to improve competitive advantage and reduce production costs. These goals could be achieved through various means such as improving service quality through purchase of modern equipment manufactured with latest technology. The second goal could be achieved by outsourcing some services from other regions.
  • Year 2: The goals for the second year are still maintaining a competitive advantage through increased service quality and profit maximization. The competitive advantage could be achieved through corporate social responsibility that increases the awareness of the firm while increasing customer loyalty. Maximization of the profits could be achieved through increased minimization of incurred costs while capitalizing on increased revenue from increased number of customers following the awareness generated by the corporate social responsibility.
  • Year 3: This year will be marked by increased growth, expansion and market focus. Focus means that the firm will focus on meeting the needs of specific markets that it will expand in. This goal could be achieved through positioning of its products and services and good pricing. The goal of expansion could be attained by the firm consolidating its resources and acquiring or merging with other firms. In addition, joint ventures could also be beneficial.

Conclusion

An environmental scan is very significant in the healthcare industry as seen in this case of the healthcare corporation. It can help the firm refine its strategic plan by establishing the factors that affect the firm as threats and weaknesses that can be overcome by available strengths and optimization of opportunities. The health corporation could establish a competitive advantage by acquiring modern medical equipment that could help it provide high quality services.

References

Hill, C. & Jones, G. (2009). Strategic Management Theory: An Integrated Approach. Florence, KY: Cengage Learning.

Lawrie, J. (2005).Strategic Planning and Management in Transit Agencies. Washington, DC: Transportation Research Board.

Swayne, L., Duncan, J. & Ginter, P. (2009). Strategic management of health care organizations. Hoboken, NJ: Wiley.

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