Lincolnshire tPCT

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Lincolnshire tPCT Provider Development
Academy Module 2 Knowing your market place
market research, analysis and clinical
informatics Brenda Setchell
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Module objectives

• Share information on a range of techniques and
  data sources that can be used to assess markets
• Contribute to the development of a provider fact
  base
• Provide an opportunity to trial some of the
  techniques

Tactics, tactics and more tactics
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Todays agenda
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Assessing local needs and demands
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Fit-for-purpose providers will ground their
success in the new healthcare market on a solid
fact base
2. Current services
1. Current needs

• Activity data by disease group
• Actual referral patterns by practice
• Stated service referral policies by practice
• Public census data
• Geo-demographic data
• NHS data sets, e.g. HES, QoF
• GP datasets showing populations current health
  status
• Epidemiology data

• Audit
• Users by disease group, service location
• Providers by disease group, service location
• Performance measures
• Staff base
• Physical assets
• Direct operating costs

4. Competitor profiling
3. Changing demand patterns

• Users wants, attitudes behaviours
• User experiences
• Purchasers preferences
• Changes in size composition of population,
  e.g. local government planning decision shifts
  in immigration patterns local population
  projections projected trends in activity data
  referral patterns
• Technological changes

• For prospective competitors
• Services supplied
• Skill, technology resource bases
• Cost structure financial performance
• Client base user experiences
• Goals aspirations

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Exercise provider fact base audit

• Conduct a rapid audit of the organisation and
  availability of information within your PCT to
  inform the development of your PCTs provider
  fact base
• Working in your PCT project team, identify the
  following for your service project
• Who has responsibility for each of the key market
  information sets listed below and which
  department or team do they currently belong to?
• Patterns of service use (including HES, community
  services data)
• Service users needs, demands and experiences
• Commissioning patterns
• Commissioners needs and demands
• Clinical outcomes/service quality (including QoF
  data)
• Local geo-demographic and census data
• Competitor intelligence
• How would you rate the usefulness of each of
  these data sets to developing competitive service
  offerings (high/medium/low/dont know)?
• Given the outputs of your audit, what top 3
  provider fact base priorities do you believe need
  to be urgently addressed by the PCT?

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Provider Fact Base_______________ Project
Team/ PCT
Ranking high, medium, low, dont know
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Key market analysis tools
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Why do market analysis?
Market analysis
Enables you to assess
Strategic position
Performance improvement
Market attractiveness

• Nature and scale of market opportunities
• Forecast growth (volume and value)
• Dynamics of a business sector

• Predict alternative future scenarios
• Identify your strategic options
• Define your strategic position

• Competitive strengths and weaknesses
• Prepare for upcoming challenges
• Review suitability of existing strategy
• identify areas for improvement

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There are a range of analytic tools that can
contribute to the understanding of your strategic
position
Examples of tools we cover in the modules

• Market sizing and share
• PEST analysis
• Porters five forces of competitive position
• SWOT analysis
• Scenario forecasting
• Company/competitor analysis
• BCG (growth/ share) matrix
• Customer/purchaser/supplier needs/demands
• Financial analysis/ ratiosRelative costs
• Benchmarking

Module 2
Module 4
Module 3
Module 5
NB Remember that they are only tools.
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Market sizing and share
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Exercise sizing a market from scratch

• Working in pairs/threes, discuss the approach you
  would take to estimating the volume of red roses
  sold in the UK on Valentines Day this year
• You have a 500 budget, a computer and phone, and
  one day to derive an answer
• Consider the following
• What key information would you need to derive an
  estimate
• How would you obtain this information
• What gaps in the required information might you
  need to fill with informed assumptions?
• You have10mins to complete this exercise

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Class discussion
Question Your PCT is considering setting up a
new community hospital-based diabetic retinal
screening service. The service will offer free
transport to appropriate patients. How could you
estimate the costs of providing such a transport
service?
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PEST analysis accounting for ongoing changes in
a market
P
E
S
T
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SWOT analysis insight into a companys strategic
options
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Porters five forces assessing a companys
competitive position
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Porters five forces assessing a companys
competitive position
Threat of new market entrants
Intensity of competitive rivalry
Bargaining power of buyers
Bargaining power of suppliers
Threat of substitution
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BCG matrix managing the product or service
portfolio
BCG Boston Consulting Group
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BCG matrix managing the product or service
portfolio
Question Marks Cash users
Stars Cash in balance
?
High
Dogs Cash in balance
Cash Cows Cash generators
Market growth ()
Low
Low
High
Relative market share
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Tea/coffee break
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Forecasting future needs and demands
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Using forecasts to assist decision making

• Forecasting the estimation of a variable (or set
  of variables) at some future point in time
• Assumption is that if you can predict what the
  future will be like, you can modify behaviour now
  to be in a better position than you otherwise
  would have been when the future arrives
• Different uses for forecasts

Operational
Tactical
Long term
Short term3-6 mths
Medium term6mths 2yrs
Long termgt2 yrs
E.g.Production planning,distribution
E.g. WorkforceEquipment needs
New servicedevelopments,RD
high
low
Ability to make use of data
JE Beasley, Imperial College
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Forecasting methods

• No relevant past data
• Delphi technique ( asking a body of experts to
  arrive at consensus)
• Ability to forecast y where given values for x
• Can extend from one variable (linear) to many
  variable ( multiple)
• Econometric modelling where any different
  variables interact through a series of equations
  (e.g UK Treasury models)
• Changes over time, especially for short term
  where past behaviour of variable is a good
  predictor of future (e.g moving averages)

Qualitative
Regression
Multiple equation
Time series
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Scenario forecasting quantifying the impact of
major market drivers on your business over a
defined time period

• Step 1 identify the 3 or 4 main variables that
  will affect your business over the next 5 years
• Step 2 think about how the interplay between the
  variables could they combine to have
• The most favourable impact on your business
• The least favourable impact on your business
• The most likely impact on your business?
• Step 3 quantify the impact of each possible
  outcome on your business over the next 5 years
• Step 4 translate this into 3 growth scenarios
• Best case
• Most likely
• Worst case
• Step 5 develop a strategy around the most likely
  outcome - But contingency plan in case the
  market changes

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Exercise Key drivers affecting your service

• What do you think are likely to be the key
  drivers affecting your project service over the
  next 5 years?
• What kind of impact could they have on demand for
  your service(s)?
• Will demand increase or reduce?
• How will demand change?
• What will be the major consequences for your
  service(s)
• What further information will you want to access
  to improve your understanding of these drivers?

15 minutes
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Research tools

• Secondary (desk) research
• Primary (field) research

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Assessing demand Desk research is always a good
place to start not least that much of its
free!

• Before starting any study, always ask has it
  been investigated before?
• Typical sources of desk research include
• QoF, HES and other NHS data
• Former in-house research
• Press clippings
• Sector surveys
• Trade information (including government data,
  healthcare journals, brokers reports)
• Internet searches
• Customer records offer unique insights
• Patterns of service use
• Comparisons with peers
• Cost
• Avoid information overload though..

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Techniques for assessing users preferences and
experiences
Core market research techniques
OBSERVATION
Qualitative studies Seek to make relatively
precise measurements of a sample and infer from
them to a strictly defined population
FOCUS GROUPS
MYSTERY SHOPPING
Quantitative studies Aim to extract meaning
(especially about cause and effect) from the
sample itself

• SURVEYS
• Face-to-face
• Telephone
• Mailed
• Online/digital

Other useful techniques in healthcare include
panels, narratives and intercepts
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Design tips for optimising outputs from research

• Design the questionnaire with the studys
  specific aims and respondents in mind
• Questions short, to the point and no leading
  questions
• Devise a logical flow to questions
• List possible categories of responses
• Put sensitive questions towards the end and
  explain your reasons for asking them
• Include instructions for interviewers
• Conduct a pilot test
• Select an appropriate sample size

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Research Ethics Not to be Overlooked

• Research conducted within the NHS covered by
• Research governance framework for health and
  social care1
• Best research for best health a new national
  health research strategy2
• Implementation plans published from summer 2006
  on www.corec.org.uk
• Building on Improvement, implementing the
  recommendations, August 2006
• Core standard C12 of the Healthcare Commissions
  annual health check
• Research ethics committees
• Independent advice on compliance of research
  studies with ethical standards
• Available guidance is not definitive, but
  research studies on service evaluation and audit
  should not require REC approval oversight
  instead by NHS trusts
• Market Research Societys code of conduct see
  www.mrs.org
• Ethical consideration should be given to, for
  example
• How research subjects are recruited and what they
  are told about the study
• What data are collected and how this is done
• How data are treated post-research
• Strict data protection regulations apply to
  patient identifiable data

Sources 1 Department of Health (Apr 2005) 2
Department of Health (Jan 2006)
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Class discussion
Question How could you field research user
experiences in local care homes and what problems
might you experience when doing this?
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Competitor analysis
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Understanding your competitors
COMPETITOR ANALYSIS
What is it?
Why do it?
An assessment of the strengths and weaknesses of
current and potential competitors

• To understand your disadvantages relative to your
  competitors
• To understand competitors past, present and
  future strategies
• To inform strategies to achieve strategic
  advantage in the future
• To forecast potential returns on future
  investments

It is pardonable to be defeated, but never to be
surprised (Frederick the Great, 1712-96)
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Five steps to do competitor analysis
Step 1 Who are your competitors?
Step 2 What questions must your competitor
analysis answer?
Step 3 Pinpoint, then research relevant
sources
Step 4 Bring it all together in a competitor
profile
Include service portfolio, market positioning,
key financials strategic outlook
Step 5 Create a competitor array

• Identify Key Success Factors
• Rank and weight
• Assess comparative performance

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Step 1 identify who your competitors are

• Who is a competitor?
• Other organisations offering the same service now
• Other organisations offering similar services now
• Organisations that could offer the same or
  similar services in the future
• Organisations that could remove the need for your
  service
• They are likely to target your market when
• There are high returns to be made
• There is unmet demand (insufficient supply)
• There are no major barriers to entry
• There is future growth potential
• Competitive rivalry is not intense
• Gaining a competitive edge over existing players
  is feasible

Think about Porters five forces and the
intensity of competitive rivalry
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Step 4 the competitor profile

• Executive summary
• Very brief profile of competitor
• Competitors strategic objectives
• Key strengths and weaknesses
• What threats do they pose us?
• Background information
• Data founded
• Overview of what company does
• Executive team
• Vision statement
• Ownership structure
• Organisational/divisional structure
• Service portfolio
• Evolution in service focus
• Main services (including SWOT analysis)
• Development activity associated with each service
  line
• Current public sector contracts

• Market positioning
• Target customer segments
• Geographic markets
• Market share (where possible)
• Relationships with key suppliers, purchasers,
  commissioners, customers, government, etc.
• Marketing strategy
• Key financials
• Current, historical and projected revenues by
  division/service
• Cost structure (by division)
• Key ratios
• Profitability
• Strategic outlook
• Strategic objectives
• Growth catalysts (e.g. upcoming tenders)
• Growth strategies (organic growth, partnerships,
  MA)

To be covered in module 3
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Step 5 A competitor array
Hypothetical example from a consumer market
b
a
c
d
e
a
Key relate to steps to be followed
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Project review and follow up work
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Project progress to date

• Tasks set following module 1
• In your PCT project team
• Agree your project objectives
• Define the business model for your proposed
  service offering
• What is the proposed service offering to what
  target market with what skills and assets what
  is the competitive positioning
• Outline the actions, milestones and timing for
  the completion of your project service plan

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Module 2 follow-up creating a market research
and analysis strategy

• Objective
• Create a market research and analysis strategy
  for the service covered by your Academy project
  team
• Rationale
• Supports business development and marketing
  strategies
• Optimises business success by tailoring service
  offerings to users and purchasers current and
  future needs
• Task to consider
• What market research and analysis information you
  have about this service?
• To what extent can the information be used to
  inform decisions that the PCT needs to make over
  the next 12 months?
• Consider the timeliness, appropriateness and
  comprehensiveness of the information
• Focus in particular on its contribution to (a)
  understanding user and purchaser needs and wants
  (b) understanding user experiences, and (c)
  forecasting revenue
• What key market research and analysis gaps are
  important to fill over the next 6 months if the
  service is to be competitive and profitable?
• How can these gaps be most cost-effectively
  filled?

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Thank you