Environmental Analysis and Competitive Advantage
It is imperative for today’s organizations to conduct environmental analysis that will be used for current and future strategic planning. When conducting an environmental analysis on Northwestern Memorial Hospital in Chicago, there are certain steps that I will undertake to complete the strategic evaluation. First, I will identify environmental forces that are likely to affect the hospital’s operations. The environmental forces identified should be relevant to the organization, the health care industry, and the geographical location that the hospital operates. Since the hospital is located in Chicago, I will identify environmental forces that are within the city, but also consider other factors that are prevalent in the health care industry. After identifying the relevant forces, I will then analyze the information I will have gathered relating to the environmental factors that are likely to impact its operations. The gathered information should entail both internal and external environmental forces such as legal regulations, government policies, prevailing economic conditions, social settings, technological factors, and internal resources.
I will then use the gathered information to forecast the impact that each environmental force has on the future operations of the Northwestern Memorial Hospital. It is essential to evaluate both positive and negative implications of the environmental factors so that the organization can identify the factors that will boost its growth and performance, while also noting those that can deter its progress. Synthesizing and assimilation of the collected data is vital in the formulation of the strategic plans that can be adopted by the hospital in order to gain a competitive edge over other competitors in the industry. After analyzing the information, I will then advice the hospital on the positive strategies that it can formulate based on the information at hand. The analysis will be important in the hospital’s decision-making process since its stakeholders will be well-equipped with sufficient information that they can use to respond to potential threats and opportunities in its environment.
Northwestern Memorial Hospital’s strategic position is influenced by various adverse factors that are likely to limit its future growth and performance. The organization faces stiff competition in its industry since there is no limited barrier to entry. The health care industry is highly concentrated and fragmented, and the players in the market vary in size. The ever-increasing numbers of direct or indirect competitors are likely to affect the organization’s future customer base. Additionally, the large entry of competitors into the industry is likely to cap the hospital’s earning capability and its anticipated profits. This limitation can affect the organization’s strategic position in the market. Another limitation to the organization’s strategic position is the increased competition among insurance plan providers, which makes the hospital to appear costly as compared to the cheaper providers. Over the years, there has been an upsurge in premium providers who have tailored their products to offer very affordable health covers.
High fixed and operational costs of the hospital also impose a limitation on the strategic position of the organization. As the organization intends to undertake strategic growth and expansion measures, it is restrained due to its high costs. High expenditures affect the available resources within an organization and thus pose as a weakness in its internal environment. According to (QUOTE IN-TEXT), the high costs in today’s healthcare organizations are influenced by factors such as the increase in population and inflated medical expenses. This limitation affects the hospital’s strategic position since growth strategies have huge financial requirements. Shortage of healthcare workers also limits the hospital’s strategic position. For the organization to effectively establish itself in the market and attain its strategic goals, it requires sufficient workforce will propel the hospital to effectively implement and execute its strategic plan.
The limitations that impact Northwestern Memorial Hospital’s strategic position in the health care industry also have negative implications on its core strategic guiding principles. The hospital is committed to being a top-notch health care provider that is committed to offering superior quality care, excellent academic options, and enhanced patient safety. However, due to the high level of rivalry in the industry, the hospital has not attained its guiding principle of being the market leader. The organization offer’s excellent patient care, but it also faces rivalry from similar facilities that also offer high-quality care, but at lower prices. The limiting factors that have an adverse impact on the hospital’s strategic position also slow down the rate at which the organization is likely to attain its long-term strategic plan and abide by its guiding principles.
The limitations that have impacted Northwestern Memorial Hospital’s strategic position have also affected its core strategic principle of striving to be a cost-effective and patient-centred care provider. The ever-increasing healthcare costs have limited the organization’s ability to be cost-effective and offer cheap and affordable care. By attaining cost-effectiveness, the organization would have been able to cheaply implement its strategic plan of increasing its community outreach and empower the society. The limitation has also barred the organization from attaining market leadership through strategic price positioning. From the analysis, it is evident that if the company is well knowledgeable of its environmental limitations and opportunities, it will be able to align its strategic plan in a manner that it will take advantage of the prevailing opportunities while working on minimizing the implications of its environmental threats. By conducting the environment analysis, Northwestern Memorial hospital will be better positioned in the market and formulate strategies of outdoing its competitors in the health care industry.