Competitive advantage in health systems
Competitive advantage is a beneficial factor that allows a company to produce goods and services that are cheap than its rivals. The firm is thus able to have more sales and profits compared to its competitors in the market. In the health care sector, competitive advantage is a vital concept of strategic planning and healthcare leadership for stakeholder analysis. Some of the factors that attribute to compelling competitive advantage in the health industry are quality of services, branding, network distribution, customer service, intellectual property and cost of structures. The paper will discuss the resource-based theory of competitive advantage for stakeholder analysis, strengths and weaknesses and the implementation of the approach.
The basis of the resource-based theory of competitive advantage is to have long-term success in business innovation. There are certain factors to consider which are: a firm’s internal resources, its capability to use those resources and contribution of change to increase its revenue in the market. In this case, the firm can be a hospital, pharmacy chain, and clinics, among others.
The model of the theory revolves around four specific factors, as mentioned above. One of them is the firm’s resources. It involves the inputs to offer health care services innovation and is categorized into physical, human and organizational capital. Another one is the capability of the firm, which is the capacity of the health practitioners to meet the needs of customers and stakeholders. The third is the competitive advantage which is the potential for performing, and the last one is the financial performance (Holdford, 2018).
Competitive strengths and weaknesses are what attribute to competitive advantage. Some of the strengths of a health firm include its competitive advantage, speciality, target market, promotional strategies, attraction to customers, and its innovative services and products. On the other hand, its weaknesses include the markets that the firm underserves, factors causing dislike to customers and wrong use of media to contact the target market.
As a chief executive officer of a health system, I can implement theory to increase the firm’s competitive advantage. I can increase the firm’s resources by hiring the best practitioners in specific fields that we specialize and adding more physical resources like machines to help in the smooth operation of the firm. To enhance the firm’s capability, I can increase the ability of the available practitioners through seminars and further education so that they can offer quality services to the patients. I can also involve the stakeholders to form beneficial partnerships with other firms and lease some of the firm’s resources. In competitive advantage, I will enhance product differentiation; for example, in therapy, I can offer chiropractic, physical therapy, massage, and aquatic therapy. Additionally, I can improve customer satisfaction by hiring more helpful and friendly staffs, ease billing, and use comfortable methodologies with patients and practitioners. In financial performance, I can increase the firm’s size to improve the economies of scale, strengthen the bargaining position with the firm’s service providers and seek funding to aid in firms operations like surgeries. Additionally, I can improve the firm’s strength through branding, promotional advertising, and market targeting. I can also research to know what displeases the firm’s patients to improve on its weaknesses (Blackwell et al., 2017)
In conclusion, a competitive advantage in the health industry is the ability of a firm to produce health care services better than other firms in the market. The resource-based theory of competitive advantage comprises if four significant factors which include firms resources, its capabilities, competitive advantage and financial performance. As a CEO, implementing these factors to form a strategic plan will increase the firm’s competitive advantage.
Reference
Blackwell, A. G., Kramer, M., Vaidyanathan, L., Iyer, L., & Kirschenbaum, J. (2017). The competitive advantage of racial equity. FSG.
Holdford D. A. (2018). The resource-based theory of competitive advantage – a framework for pharmacy practice innovation research. Pharmacy practice, 16(3), 1351. https://doi.org/10.18549/PharmPract.2018.03.1351