The Margin of Operation at Mayo Clinic - Research Proposal Example

Strategy Formulation and Evaluation Overview of mayo clinic Mayo Clinic has gone through some key changes following their acquirement by Tenent Health Corporation in the year 2013. One of Tenet’s aims through the acquirement is to raise the margin of operation at Mayo Clinic by enhancing cash flows, improving satisfaction, and increasing profits. A way in which this may be attained is via the strategic plan of improving the pediatric cardiology by widening the service scope. Because of the excellent standing and exceptional skill sets of the hospital along with satellite service centers, Mayo Clinic usually cares for pediatric patients that need care not available in their hometowns. Additionally, technological progress in cardiological equipment and capabilities carry on, making Mayo clinic to renew their services frequently so as to stay competitive. As such, expanding the span of pediatric cardiology could result in many constructive outcomes like increases in proceeds and serving more children. Adaptive Strategies The scale of pediatric cardiology can be expanded via the market development adaptive strategy. This approach will carry pediatric cardiology to sections on the market that do not at present offer these services. Even though, Mayo Clinic at present services an extensive geographic region, their services of Pediatric cardiology are not obtainable at every location. Consequently, the addition of this service to extra sites can reach new sections inside Mayo clinic’s present market share. So as to appraise the suitability of broadening the pediatric cardiology scope through market growth, two strategy assessment methods will be used. The approach will first be assessed using a Threats, Opportunities, Weaknesses and Strengths (TOWS) matrix. TOWS Matrix Strengths Weaknesses Positive standing for quality Latest buy out by Tenant Health company Strong presence in market Present budget restraints Opportunities 4. SO Strategies 2. WO Strategies Improvements in technology Use of technology to boost quality Build on reputation to raise confidence in unification Planned construction and facility improvements Inculcate technology in fresh construction along with existing locations Tackle existing budget and effectiveness problems in new build. Threats 3. ST Strategies 1. WT Strategies Ambiguity over reasonable care act Exploit on standing to improve customer confidence with fresh services Adjourn construction and development until the health care market becomes stable Waning market age demographic Draw patients from outside the market region Close existing locations with little volume As indicated in the above TOWS matrix, extending the pediatric cardiology scope through market growth emerges to fit well inside the Strength - Opportunity (SO) approach by addition of cardiologic technology in existing open standing service centers. This technique appears to associate with growing technology and would probably draw patients that are outside the market region in order to obtain the services. Additionally, the approach falls in quadrants three and four. Each of the quadrants is associated with market expansion strategies in the TOWS matrix (Harrison & Association of University Programs in Health Administration, 2010). The second type of strategy assessment is the Strategic Position and Action Evaluation (SPACE) technique. It evaluates strategies as they associate with the organization competitive position (Gapenski & Association of University Programs in Health Administration, 2013). The economic strength, service class strength, environmental steadiness, along with the Mayo Clinic competitive advantage was rated to develop the profile of the organization. This information was outlined on the SPACE Matrix as shown below: Strategic Position and Action Evaluation Factors (SPACE) Matrix Conservative Financial Strength Aggressive +6 +5 +4 +3 +2 +1 Competitive Advantage Service Category Strength -6 -5 -4 -3 -2 -1 0 +1 +2 +3 +4 +5 +6 -1 -2 -3 -4 -5 -6 Defensive Environmental Strength Competitive As demonstrated in the matrix above, the Mayo Clinic organizational profile of appears to be somewhat more competitive compared to the other aspects. Organizations that have a competitive profile succeed with strategies like enhancement, penetration, market development, product development, and status quo (Harrison & Association of University Programs in Health Administration, 2010). Consequently, market development seems to be a suitable strategy in this assessment method too. Market Entry Strategy Basing on the TOWS technique of adaptive strategy, it was established that the Cardiology Department must consider increasing their services. The assessment of the adaptive strategy shows that scope expansion would center on a market growth. As indicated by (Harrison & Association of University Programs in Health Administration, 2010), market development helps in entering new markets with existing services or products, which consists of geographic areas and new groups of clients. Market development as well entails product development suggestive of the introduction of a fresh product to current markets; this can include the development of products enhancements or a new product line. Finally, penetration is the effort that Mayo clinic can achieve by being able to improve service to their patients with extra available sites, (Harrison & Association of University Programs in Health Administration, 2010). All this is supported by the TOWS matrix that proved in the Strength – Opportunity (SO) quadrant that addition of Cardiology technology in present open standing service sections and adding new technology can be an appeal to patients. What was as well indicated inside the TOWS matrix is that market entry has the strong support of the hospital reputation. The weakness that can be worked out is the monetary budgeting. The Mayo Clinic as a healthcare organization just like others faces financial burdens. As a result, this healthcare organization should take slow, positive shift into development. Competitive Strategy Strategic Posture Strategic Posture asserted by Dean and Company is a decisive step in the definition of the strategy of a business. It determines it’s tactical positioning – the fundamental nature of how it contends and serves clients in the markets. Strategic postures can be classified into four diverse categories. Defender; which centers on a small market region as well as limited products, Prospector; which constantly seeks out new markets with fresh products, Analyzer; which is the ability to shield and perform well in given markets while attempting to selectively go into other markets as well as products and finally, Reactor; which always reacts to the strategies of other opponents (Harrison & Association of University Programs in Health Administration, 2010). Now that the Mayo Clinic wants to remain competitive and provide convenience and last in technology when dealing with Cardiology, their strategic posture should fall in the prospector posture. Mayo clinic always seeks the latest technology for use in their Cardiology Department. Having the prospector posture, this healthcare organization has many advantages that are: being current with technology, which offers excellent reputation, they keep up with regular change with technology as well as other internal and external changes. Disadvantages may also be found in this posture and should be watched. Technology is in continuous change, maintaining an excellent forethought as to what ought to be changed; purchased or kept the same is vital to this Department. Businesses that are in continuous motion should keep a grasp on the economic troubles that this can produce. Profits with realizing new technology may come slowly because of the break even pay off point. New technology is quite expensive to any healthcare business. An additional disadvantage could as well be the exercise of internal aspects. It matters if the internal workers will be able to appreciate and have the information to utilize the new technology satisfactorily. Strategic Position Strategic position as per Harrison & Association of University Programs in Health Administration (2010) is a marketing notion that draws what a business must do to sell and market its services and products to its consumers. This helps in creating the product image for the anticipated consumer. There are a number of positioning strategies that are formed with the respect towards the healthcare organization strategy. There are four distinctive classes under positioning strategies i.e. cost position leadership strategy, a strategy that is directed to the whole market at a low cost; differentiation position strategy, the development as well as use of a distinctive service or product that can service a whole market; focus cost leadership positioning strategy, a low cost as well as price strategy that is aimed at a certain market and not as extensive and last but not least, the focus – differentiation position strategy that is whenever a distinctive service or product is directed to a certain market area (Gapenski & Association of University Programs in Health Administration, 2013). All of the above strategic positions have disadvantages and advantages. Generally, the advantages is more, for example; being in a position to maintain the cost down, pleasing to an area of target, unique service or product development, chances to be competitive as well as greater market control. Disadvantages involves the quantity that might be required to cover a diverse service area, it could be difficult to determine what is service or product, products and services might be priced higher because of the uniqueness, reputation might be considered as low, and if attempting to maintain the cost low, quality might be associated with this leading to low quality of services and products. The positioning strategy that the Mayo Clinic is a cost leadership positioning strategy that can offer an excellent competitive benefit, a sturdy market position which dividing into satellite branches will offer, and the capability of financing latest technology. The Mayo clinic must as well be conscious of the disadvantages that they can encounter with this positioning. So as to service the satellite branches, there should be the buying of apparatus and machines to service these facilities; this may result to finance overrun. Giving these facilities lower than up to date machines can bring out the repute as be of poor quality. The facilities as well ought to go after the stern standards and be consistent all throughout which can create complexities in maintaining. Summary and Conclusion Mayo Clinic developed steadily from the medical practice of a founder doctor, William Mayo Worrall, who stayed in Rochester, Minn., in 1863. His devotion to medicine turned out to be a family custom when his sons, Charles Horace Mayo and Drs. William James Mayo, joined his practice in 1888 and 1883, correspondingly. As time advanced, so did the clinic. The Mayo Clinic has developed as well as changed to the concerns, needs, economy as well as their patients’ service area that they serve with at all times providing as well as upholding their strong repute as leaders for healthcare. Considering the always varying service area, Mayo Clinic has in no way lost sight of their goals, mission, values, and vision. They have put some huge concerns with maintaining the course of this healthcare institute in a competitive, yet highly regarded organization. With watching keenly on market strategies as well as positions have made them grow as well as prosper, not losing focus on the healthcare. References Gapenski, L. C., & Association of University Programs in Health Administration, (2013) Fundamentals of healthcare finance. Chicago, Ill: Health Administration Press. Harrison, J., & Association of University Programs in Health Administration, (2010) Essentials of strategic planning in healthcare. Chicago, Ill: Health Administration Press Read More