Table of Contents
Environmental scans are tools of strategic planning process. Environmental scans identify projected governmental, demographic, and social changes that will affect Beta Pham nursing facility strategic planning in era of health care reform, aging population, single parenthood, drug use, and crime (Geisler, Widerberg & Willich, 2010). Internal environmental scan should encompass assessment of notable strengths and weaknesses of various dimensions of Beta Pham.
Berkowitz (2006) says that internal environmental scan of Beta Pham nursing facility is an analysis of the facility’s environment and of the facility itself. Beta Pham must consider economic, competitive, regulatory, social, and technological changes occurring in the marketplace. Berkowitz (2006) says that scanning these dimensions of the internal environment gives management of the facility insight on the existence of opportunities and threats to which the organization must respond in its overall strategic plan and in subsequent functional plans.
As the population ages, Beta Pham must use this trend and decide what implications it holds for its business. Berkowitz (2006) says that the nursing facility should devise ways of responding to opportunities that arise in the course of its running. Through internal environmental scan the nursing facility should consider the barriers that exist in the market place (Havaldar, 2010). In formulating the strategic plan Beta Pham must consider barriers to entry, which are the conditions that the facility must overcome in order to pursue business opportunities (Berkowitz, 2006).
Beta Pham must assess what it does better than competition and develop it as a differential advantage. Berkowitz (2006) says that there are numerous processes and elements that are essential in the delivery of high quality care. Clinicians in the facility must devise key methods of providing a certain standard of care. Beta Pham should analyze its environment in terms of the service it offers, market it serves, and the cost of the services.
According to Berkowitz (2006), for a market based position competitors might target smaller groups to establish a differential advantage. In Beta Pham the cost factor could contribute to an advantageous position within the market. Berkowitz (2006) noted that in health care the cost position may be the most difficult to maintain. On the other hand, technology has a dramatic impact on the cost position of Beta Pham. This implies that exclusive focus on cost can also lead to a failure to recognize market needs or new service opportunities that might come in the course of its running after adopting the strategic plan (Geisler, Widerberg & Willich, 2010).
Internal Assessment Using Michael Porter's Value Chain Analysis Model
Michael Porter’s value chain includes five forces which can be integrated in the assessment of Beta Pham nursing facility.These forces include current competitor rivalry, threat of new entrants to substitute products and services, bargaining power of customers, and the bargaining power of suppliers. Cheverton (2010) says that current competitor rivalry plays an important role in the internal analysis of Beta Pham nursing facility. Each competitor is jockeying for position through price, quality, or service. Cheverton (2010) says that nursing facility rivalry increases when there is little difference between the facilities, staff skills, and reputation or when the facilities are few and evenly sized. Also when the market is mature and the growth slows down, there are high exit costs and, therefore, players cannot leave because they are committed to filling service gaps. Competitor rivalry is likely to bring new competencies such as maintaining low infection rates, system of dispensing medications without error, and efficient scheduling of operating rooms.
While carrying out internal assessment the management of Beta Pham should take into consideration the threat of new entrants. Cheverton (2010) says that there is a threat of new facilities that are likely to be attracted by the profitability of growth of the nursing care market or by the failings of the incumbents. Not all new entrants are as successful as their aggressive launch plans promise. Their presence, however, reshapes the competitive dynamics of the market.
Beta Pham is faced with the threat of substitute products and services. Cheverton (2010) says that replacing company’s offer through new technology or a lower cost alternative will change operations of the nursing facility. Research shows that substitutes are most likely when technology in nursing facilities takes a leap forward and existing players are weak when customers have become tired of status quo (Geisler, Widerberg & Willich, 2010).
Beta Pham in its internal assessment process should focus on the bargaining power of patients. This is because reducing in numbers through amalgamation consequently increases the patient’s buying power. Cheverton (2010) says that patients find other ways in which to apply their bargaining power such as pressure groups. Buyer’s power increases when buyers are more numerous than sellers. When sellers fail to differentiate offers, the products concerned are of low importance to the patient and switching costs are low (Cheverton, 2010).
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The bargaining power of suppliers will play a fundamental role in the internal assessment of Beta Pham. This is because sometimes through merger and consolidation other nursing facilities are likely to provide increasingly high-value unique services (Cheverton, 2010). Cheverton further says that major suppliers can wield enormous power either through brand names or through the scale of their operations (2010). Suppliers’ power in nursing facilities increases when they form a critical component in the customer’s product. It also occurs when suppliers are more numerous than customers or when there switching costs are high.
Other Approaches of Conducting Internal Assessment of Healthcare
Beginning with Porters’ value chain model, Beta Pham nursing operations should be broken down into its component activities (Moseley, 2009).The management should make decision about how the value chain of Beta Pham will be decomposed. Beta Pham should focus attention on few most significant activities that incur the largest portion of costs or create the largest share of value. Moseley (2009) says that “special focus should be given to those activities that have been determined to be critical to whatever competitive advantage the nursing facility has been able to achieve” (p. 46).
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When determining costs incurred and value created, the management of Beta Pham nursing facility should be sensitive to inter-activity linkages and synergies that might be disrupted by changes in individual activities (Moseley, 2009). There is a fundamental difference between performing an activity in a different way and performing it better in the existing way. Beta Pham nursing facility should perform its existing activities as best as possible. However, the most that this will gain the facility is competitive parity.
Overall Assessment of Organization’s Internal Strengths and Weaknesses
Determining Beta Pham’scurrent and potential competitively relevant strengths and weaknesses is the goal of internal environment analysis (Swayne, Duncan & Ginter, 2006). Beta Pham organizational characteristics that represent key strengths of strategists may have little importance to patients and other stakeholders or may be strengths to competitors. Competitive advantage for Beta Pham nursing facility is a matter of positioning where the physician office and hospital occupy well defined competitive niche (Mara & Ziegenfuss, 2000). The major strength of Beta Pham nursing facility is its location. The location for Beta Pham is strategic strength because it prohibits other organizations from occupying that specific location. Swayne, Duncan & Ginter (2006) say that the key weakness of Beta Pham may occur when the organization assumes excessive debt financing for its facilities. In the long run it may not be able to finance new emerging technology.
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Strengths and weaknesses of Beta Pham nursing facility may be based on having rare or abundant resources, special competencies or skills, or management or logistical capabilities (Swayne, Duncan & Ginter, 2006). At the same time, competitive advantage of facilities may result from a lack of resources, competencies, or capabilities. As a result, strengths and weaknesses are easier to be identified if one thinks in terms of organizational resources and competencies.