Professional Documents
Culture Documents
Residency
January, 2008
If business is like a
gamestrategy is the
theory of how to excel in
that game
Compare it to blackjack
Corporate
In which businesses should we be?
How should we manage the array of
businesses?
Business
How should we compete in a given
business?
Functional
How best can each function support the
business level strategy?
The Strategic Management process
Internal
Analysis
Mission/Vision Objectives
Strategic
External Choice
Analysis
Strategic Implementation
Competitive advantage
Mission and Vision
Set Targets
Become.
Common Enemies
Beat..
Role Model
Be Like.
Internal Transformation
Transform the company how
Knowing your stakeholders
Product Market
Organizational
2
How do you increase the size of
the pie so that there is more to
go around?
Honda case
Structure-conduct-performance model
Five forces model
SCP Model
Industry Structure
Number of competing firms
Homogeneity of products
Cost of Entry and Exit
Firm Conduct
Price taking
Product differentiation
Tacit collusion
Exploiting market power
Performance
Firm level: Normal, below normal
above normal performance
Society: Productive and allocative efficiency,
Level of employment, progress
The linkage
Varies from
Identification of competition
Other hospitals, doctors, alternative methods
Should competition dictate health care
offerings?
What are the geographic locations of your
competitors?
What is the demographic make-up of the
competition?
What is your market position?
Competitive Analysis
Oversupply of physicians
Available market to support new ventures
What exactly will the market support
Cultural/Social
Abortion Clinics
Animal Research
Ethics Issues
Economy Hospital
Tiers of hospitals
The Consumer
National trends
Learn from others
Geographic assessment
What is happening in your environment
Geographic
Service marketing
Specialized equipment
Overall package
Planning assumptions
Enactors
Adapters
Survivors
Philosophy on risk
A Risky Venture
Setting a strategic direction
Backward:
For hospitals, owning physician practices
Forward:
Providing rehabilitation
Backward Integration
Prospectorsembrace change
Analyzers--fast followers
Defenderstargets a narrow market, feeds on
stability
Reactorshoots from the hip
Utility levers:
How a company can unlock exceptional utility for
buyers
Greatest blocks often represent the most pressing
opportunities
Look across leversthe more blocks
uncovered the bettergo back and refine
The map highlights differences between ideas
truly new and those that are only revisions
Purchase Delivery Use Supplements Maintenance Disposal
Customer
Productivity
Simplicity
Convenience
Risk
Fun &Image
Environmental
Friendliness
Uncovering blocks
Customer Productivity: where is the
biggest block to customers
Simplicity: where are the biggest blocks to
simplicity
Convenience: where are the biggest
blocks to convenience
Risk: same
Fun and Image: same
Environmental Friendliness: same
Strategic pricing
People must be attracted and willing to pay
Know from the start what people will be willing to
paydont start at one level and drop price later
To some the value of a product may be tied to
number using it (eg: eBay)
Must earn reputation from beginning
Curves
Starbucks
Price must not only attract buyers but retain them also
Identify price corridor of the mass
Challenge to pricing:
Understanding price sensitivities of people
comparing products to yours outside the
industry
How then:
Look at products of different forms but same
function
Products of different forms and functions but same
overall objective
Different form, same function
Ford priced Model T against horse drawn
carriage..not other cars (price point lower)
Different form and function, same
objective
Cirque du Soleil lured customers from all
other areas of entertainmentincluding
bars and restaurants---objective, an
evening out
Specify level within price corridor
Determine how high can price without
inviting imitation products as competitors
Dependent on:
Degree it is protected legally (patents or
copyrights)
Degree company owns core assets or
capabilities
Example: Dyson patent and hard to imitate
bagless vacuum
Companies should choose mid to
lower pricing if
High fixed cost and marginal variable
costs
Attractiveness depends on network
externalities
Cost structure benefits from steep
economies of scale and scope
Strategic Pricing to Target Costing
To maximize profit potential..start with
strategic price..deduct desired profit
margin and arrive a target cost
Example: episode of Flip this House and the city building inspector
Focus groups
Find out what, when, where and how
much the patient actually requires verses
what is actually being delivered
Would an uninsured patient choose to pay for
a particular process step, activity or feature?
Why not eliminate?
How much value does a fountain or brass
doors on an elevator bring to the patient?
Do expanded services provide true value if
they are already being provided elsewhere?
What is the true goal?
Bottom line and market share?
Cost effectively and measurably improve
the health status of the community?
Step 1
Have a clearly defined project charge and
make sure this charge is clearly aligned
with your mission and vision
Step 2: Map the Patients Value
Stream
All the actions, both value-creating and
non-value creating, required to bring the
patient from admission, through discharge
and follow up
Map out in flow chart
Label as:
Those that definitely provide value
Those that provide business value but little value
to patient
Those that provide no value whatsoever
Step 2
What can be eliminated without taking
away value from the patient? Think in
terms of what an uninsured person would
be willing to pay for
Consider pedometer to see where steps can
be eliminated
Goal is to eliminate waste, waiting anything
that is not adding value
Step 2: Advise from former
PEMBA
Clearly define what is value-added and
non-value added
This is imperative to a successful outcome
Have a clear knowledge of the WASTE
Develop an as is and to be value
stream map
Group Activity
Map out activities in one of your offices
First: develop as as is value stream map
Everyone in the group can help by posing questions
Second: what is value-added and non-value-added
Third: determine what is waste
Four: develop a to be value stream map
Fifth: identify your problem areas for implementation
of the to be map
Step 3: Look at how all core
processes work in detail
Spend time observing all processes..even
doing
Require all supervisors/managers to do value-
added work
Give everyone a say in how things can be
improved
Consider creating an internal observation and
improvement team
Step 4: Implement Toyota-style
lean production methods
Establish a continuous work flow
Set a target of reducing patient wait time
to a maximum number
Post signs to inform desk if time maximum
has been exceeded
With continuous flow, size of waiting room/
physician and treatment room numbers can
be reduced
Step 4
Could invest in efficient patient scheduling
systemToyota does not
Uses a pull systemkanban system
Use identifying card with patient ID
Card given to patient upon arrival
After every step..card returned to receptionist or nurse in
charge..used as a notification that a process has been
completed and another ready
Draw services to patient
Review all systems to assure the pull value is automatic
More on Kanban
Invented in 1950 at Toyota
Belief that parts will only be produced at the
previous step to satisfy demand at the next
step of the process
As each container of parts used up at a
manufacturing step, it was sent back to the
previous stepwith a kanban card
The kanban card signals for more inventory at
the right place at the right time
Pick a process (other than
the example I gave)