Health Care Executive Summary

The U.S. healthcare system has become more complex in effect of the Patient Protection and Affordable Care Act of 2010 (Reed, 2013). Consumers are confused over the sheer inefficiency of medical services despite rising costs. Healthcare providers, on the other hand, are either going bankrupt or undergoing tremendous changes that seem too overwhelming to adapt. This is why it is imperative for healthcare organizations to conduct a strategic analysis of competitiveness on a regular basis to determine its position in the local and global market.
According to Arlen Meyers (2013), there are five reasons why organizations need a competitor analysis. First, there is an immediate threat of substitute products or services, and threats of established rivals as well as newcomers. The fourth and fifth factors are the bargaining power of suppliers and that of the customers. Based on Porter’s five forces, companies who create value will remain strong in the game. To translate this in healthcare, providers should focus on giving value for patient’s money and not just simply lowering the costs. The competition should also be centered on medical conditions
over a particular care cycle. Ideally, high quality care should be less expensive, and that value is introduced by those with experience, skills, and education. Care providers should aspire to escalate from local to regional or national. Finally, providers and patients should get access to information on value-based services. Following Michael Porter’s competitor analysis framework, healthcare organizations should get a hold of the following information: objectives, assumptions, strategies, and capabilities.
Objectives and assumptions are the driving factors of the competitor’s business, while the strategies and capabilities are what the other companies are currently doing. In general, a competitor analysis takes into consideration the financial aspect of the organization. Thus, one would need to obtain annual shareholder reports, 10k reports, interviews with analysts, management statements, and press releases. It would be helpful to know the competitor’s hiring activity, R&D projects, capital investments, promotional campaigns, strategic partnerships, and mergers and acquisitions (Internet Center for Management and Business Administration,
2010). In the healthcare industry, most care providers have similar objectives – that is to provide the best possible affordable care services to patients. Some may also strive to become a leading scientific research facility, depending on the direction of the organization. Organizational structures are almost identical from one hospital or clinic to another. Simply put, objectives are not necessarily crucial in a healthcare competitor analysis. But assumptions are important. These dictate the organization’s short- and long-term goals. A competitor’s assumptions may be based in the following factors: beliefs about its competitive standing, past experience with the service or product, regional influences, industry trends, and best practices (Internet Center for Management and Business Administration, 2010). Finally, the competitor’s resources and capabilities are what separate them from the rest of the care providers. Is the provider able to meaningfully respond to patient needs and demands financially and medically? What other external grants does the competitor have that make them attractive to clients? These pieces of information are important in the decision-making process because it dictates how, where, and when investments and resources should be allocated (Gamble, 2012). It also minimizes internal and external conflicts and organizational chaos because the company is narrowly focused.