Healthcare service providers usually employ strategic management techniques and tools in order to come up with effective strategic plans, and satisfy customers’ expectations and needs. Essentially, the core strategic mission of healthcare organizations is to deliver and improve best net value for their customers. Thus, it is extremely vital that they constitute super ordinate goals because chasing any other goal(s) represents pursuing self-interest.
In essence, the principal management responsibilities of formulating and executing strategies that deliver and improve customers’ net value are indigenously intertwined. Ginter et al (2012) observed that strategic management entails a philosophy of managing a business entity or organization in a manner that will link strategic analysis and thinking to the actions of the organization, and it is externally oriented. Therefore, in healthcare, a strategy refers to the means/methods adopted to meet customers’ expectations and needs. Value strategy is the most vital strategy because it tends to align with the organization’s mission, and it yields a competitive advantage over competitors.
The success/long-term performance of any healthcare provider is chiefly determined by its customers’ view of feasible net value. It follows that value is extremely vital to managers and customers than earlier envisioned. Given the ever-rising legal requirements and consumer demand for quality healthcare services, it follows that customers will only remain loyal if the organization offers best value. Similarly, for managers, the surest way of improving customers’ value subject to cost is by adopting statistically-based value strategies. Harris (2006) observed that organizations must reexamine their management strategies if they are to gain a competitive advantage.
AIDitionally, strategy formulation is extremely fundamental because it communicates to the vision and mission of the organization. In essence, it entails making decisions basing on the data collected during situational analysis (Ginter et al, 2012). Directional, market entry, adaptive and competitive strategies influence the process of formulating strategies. The majority of healthcare providers have failed to recapture their markets because they are competitor-oriented rather than customer-oriented. Therefore, all healthcare organizations must incorporate customers’ net value when formulating their management strategies if they are to remain competitive in the healthcare market.
The mission, values, and strategic goals make up the
directional strategies for the organization (Ginter, Duncan, & Swayne,
2013, p. 167). The directional strategies help guide leaders to make important decisions regarding the company (Ginter, Duncan, & Swayne, 2013, p. 167). The
directional strategies require the involvement of Board Members to assist in
developing the path of the organization (Ginter, Duncan, & Swayne, 2013, p.
192). However, Board members do not typically “establish” the directional
strategies their input is valuable to the organization. These directional
strategies allow employees to know what the organization wants to achieve.
Consequently, the adaptive strategies specify how an organization will maintain, reduce, or expand its operations (Ginter, Duncan, & Swayne, 2013, p. 210). It is important that the adaptive strategies are more specific than the directional strategies. There are a variety of adaptive strategies which include diversification, market or product development, liquidation, harvesting, and enhancement (Ginter, Duncan, & Swayne, 2013, p. 212). The strategies chosen will depend on the organization’sscope. If an organization decides to enter or expand into a new market then the market entry strategies must be established. The market entry strategies allow an organization to determine how the company will enter or develop the market(Ginter, Duncan, & Swayne, 2013, p. 230). There are three major methods used to enter markets which include purchase strategies, cooperation strategies, and development strategies (Ginter, Duncan, & Swayne, 2013, p.230). After, adaptive and market entry strategies are determined an
organization must determine its competitive strategies. An organization must
determine its strategic posture within the marketplace (Ginter, Duncan, &
Swayne, 2013, p. 239). There are two fundamental positioning strategies which
include, differentiation and cost leadership (Ginter, Duncan, & Swayne,
2013, p. 241). Overall, all of these strategies are required to be completed
for a successful organization because each strategies works with the other. There
is an “ends-means” relationship among the strategies. Therefore, it
is important that the directional, adaptive, market entry, and competitive
strategies are established, managed, and implemented properly.
Hi there! Click one of our representatives below and we will get back to you as soon as possible.