Strategic Analysis

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Strategic Analysis

• Stuart Haines

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Strategic Analysis

• Strategic Environment
• 5 Forces Analysis
• Cultural Web
• Organisational Competence
• Value Chain
• Cost Efficiency

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Strategy is best considered alongside political
and cultural issues.
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Clinical Team
Clinical Directorate
Trust
Health Economy
SHA
NHS
HM Government
Strategic Analysis
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PEST

• Analysis of Environmental Influences

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What environmental factors affect the
organisation?
Political/legal Factors
Economic Factors
Socio-cultural Factors
Technological Factors
Which of these are the most important now, in the
medium and in the long term?
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Competitive Environment5 Forces Analysis
Johnson G Scholes K (1999) Adapted from Porter
M (1980)
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Porters 5 Forces

• Threat of Entry
• Buyer Power
• Supplier Power
• Threat of Substitutes
• Competitive Rivalry

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1. Threat of EntryLargely depends on barriers
to entry

• Economies of Scale
• Capital Requirements of Entry
• Access to Distribution Channels
• Cost advantages independent of size
• Expected retaliation
• Legislation or government action
• Differentiation

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2. Power of BuyersBuyer power is high when

• Concentration of buyers - especially volume
  purchasers
• The supplying industry has large number of small
  operators
• Alternative sources of supply
• Cost of switching supplier involves little risk
• There is a threat of backwards integration from
  the buyer

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3. Power of SuppliersSupplier power is high when

• Concentration of suppliers, rather than
  fragmented source of supply
• Switching costs from one supplier to another are
  high
• Brand of the supplier is high
• Possibility of supplier integrating forwards
• Suppliers customers are highly fragmented so
  their bargaining power is low

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4. Threat of Substitutes

• Product-for-Product substitution
• Substitution of Need
• Generic Substitution
• Doing Without

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5. Competitive Rivalry

• Extent to which competitors are in balance
• Market growth rates affect rivalry
• Existence or development of global customers
• High fixed costs in an industry
• Addition of extra capacity in large increments
• Differentiation
• Acquisition of weaker competitors
• High exit barriers in an industry

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Compete or Collaborate?

• Collaborating adds greater value to the
  organisation than when its on its own
• Collaborating allows an organisation to
  concentrate on its core skills - avoiding wasted
  peripheral activities

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The Cultural Web

• Analysis of Internal Cultural Influences

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Understanding the culture of an organisation is
important but not straightforward.
Dont make assumptions. Underlying
assumptions are only evident from talking to
people.
How do people behave towards each other?
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Why map culture?

• Surface what we take for granted so that we can
  question them. If we dont question what we take
  for granted, change is difficult.
• See where barriers to change are.
• See linkages between aspects where there is
  particular resistance to change.
• Can map what change is necessary to deliver new
  strategy.
• See whether such change is sustainable.

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Symbols
Stories
Power Structures
Rituals Routines
The Paradigm
Control Systems
Organisational Structures
The Cultural Web
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Stories
Cures
Villains (politicians managers)
Heroes heroism
Change agents are fools
Managers are abused
There was a Golden Age
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Symbols
Terminology
White coats/uniforms
Mobile phones/bleeps
Doctors dining room
Big institutions
Royal
University connection
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Power Structures
Fragmented
Professional bodies
Doctors
Senior Clinicians
Old-Boy network
Politicians
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Organisational Structures
Hierarchical
Mechanistic
Pecking order of services
Tribal/functional
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Control Systems
Financial reporting
Waiting lists
Consultant episodes
Professional responsibility
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Rituals Routines
Clinical rituals
Consultation ceremonies
Patient infantilising
Waiting rooms
Putting to bed
Waking up
Ward rounds
Blaming the next tier
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The Paradigm
NHS is a good thing
Public service
Free at the point of need
Clinicians values
Providers know best
Acute sector superior
Ours
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Does the culture support the kind of organisation
you need?
Symbols
Stories
Power Structures
Rituals Routines
The Paradigm
Control Systems
Organisational Structures
The Cultural Web
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The Competence of the Organisation

• Getting right what you do best

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The Value Chain
Firm Infrastructure
Human Resource Management
Support Activities
Technology Development
Procurement
Margin
Inbound Logistics
Service
Marketing Sales
Outbound Logistics
Operations
Primary Activities
Adapted from Porter (1985)
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The Value Chain
Supplier Value
Your Value
Buyers Value
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Identify Core Competences

• Identify SBUs that are clearly successful
• Identify the bases of perceived value by
  customers
• Unpack each base of success - why are the SBUs
  successful?
• Unpack secondary reasons for success
• Look for patterns of explanation

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Primary
Secondary
Tertiary
Success
Good Service
Rapid Response
Flexibility
Solving Patients Problems
Staff Discretion - rule bending
Good relations - GPs
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Analysing Cost Efficiency

• How effective are your processes?

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Economies of Scale
Experience
Cost efficiency
Product/process design
Supply Costs