Strategic Planning in Healthcare: Tools for Success

Listen Topic: Strategic Planning and Strategic Healthcare Marketing Class, welcome to Session 2. In Session 1, we defined healthcare administration and examined the roles, functions, and competencies of healthcare managers. We also touched on leadership, outlined some of the differences between a leader and a manager, and highlighted the importance of motivation as a driving force for employee performance. In this session, we will learn about ways managers identify factors, both current and future, that impact production processes. We shall examine the dynamics that could influence the effort to improve production systems. Every organization strives to be successful by identifying those critical factors leading to that success. Often, that success lies in how well an organization can plan and tap into market opportunities. As a result, managers have adopted the use of strategic planning tools to enhance the likelihood of success in their businesses. Buchbinder and Shanks (2017) define strategic planning as a process of identifying a defined future state for an organization and a means to achieve it. We will learn how through an ongoing analysis of an organization’s operating environment, matched against its own internal capabilities, an organization’s leadership is able to identify strategies that will drive the organization from its present condition to that desired future state. We will also learn how an organization can use strategic marketing in the progression of becoming a market-oriented organization. Today’s practicing healthcare managers are being challenged to operate in increasingly complex, interdependent, and dynamic markets. We will learn the kinds of activities that the firm uses to satisfy consumer needs; the approaches managers pursue to create, communicate, and deliver value in selected markets; and the means in capturing value in return. Topic Outcomes: By the end of this session, students should be able to: ● Describe strategic planning, a strategic planning process, and the importance of strategic planning as a dynamic process. ● Identify healthcare market powers and trends, including their impact on health services.

● Identify issues and concerns with a current healthcare system and how to improve it by using strategic planning tools such as SWOT Analysis. ● Explain the major functions of the marketing management process, including various technical terms used in marketing. ● Describe how healthcare managers can integrate ethics and social responsibility into marketing strategy. The healthcare industry is a very dynamic industry subject to radical changes over time. Managers strive to provide quality care with the hope of harnessing patient satisfaction and loyalty. In an attempt to provide quality care, managers should identify current issues and concerns within the health care system by effectively planning and mapping out operational paths. Experts have come up with several strategic planning tools of vital importance to organizations. When managers effectively deploy these tools, they are in position to identify the strengths and weaknesses of their institutions’ operations and their relative position in the market. Armed with such information, managers are then in a better position to devise strategies to overcome those issues and concerns plaguing their businesses. In addition to identifying strengths and weaknesses, managers may also identify the threats facing their businesses and the opportunities available to them. Some strategic planning tools include: ● SWOT/TWOS Analysis ● Fishbone/ Root-Cause Analysis ● 5 Whys ● Boston Matrix ● Porter’s 5 Forces ● SOAR – Strengths, Opportunities, Aspirations, and Results ● PEST – Political, Economic, Social, and Technological ● VMOST – Vision, Mission, Objectives, and Tactical ● Decision Tree Analysis ● PDCA Cycle - Plan, Do, Check, and Act For this lesson, we will discuss SWOT analysis extensively. When healthcare managers use strategic planning tools, they do so for the following reasons: ● To change the direction and performance of their healthcare businesses. ● To identify deficiencies and strengths of their organizations.

● To create standards for decision-making in the organization. ● To set a proper context for decisions and performance evaluations. ● To train managers to develop better decision-making skills. ● To remain competitive. ● To reduce costs. ● To forecast (Buchbinder & Shanks, 2017; Daniel, 2011). Strategic Planning Process A successful strategic planning process should: ● Describe the organization's mission, vision, and values. ● Target and explore potential markets for emerging threats and opportunities. ● Understand the current and future priorities of targeted customer segments. ● Analyze the company's strengths and weaknesses relative to competitors. ● Determine on which elements of the value chain the company should concentrate. ● Identify and evaluate alternative strategies. ● Develop an advantageous business model that will give the organization a competitive edge over its competitors. ● Define stakeholder expectations. ● Prepare programs, policies, and plans to implement the strategy. ● Establish control systems, as well as hiring and training systems. ● Allocate resources and plan for contingencies. ● Monitor performance (Buchbinder & Shanks, 2017). The following diagram presents the strategic planning process:

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(Source: Mybusinessprocess.net, 2013, http://www.mybusinessprocess.net/strategic-planning-process-an-introduction/) To effectively change things around in any organization, managers frequently use the SWOT analysis. There is also a tool known as the TOWS matrix, often used alongside the SWOT. The TOWS matrix emphasizes the external environment, while the SWOT emphasizes the internal environment. Below is a template of the TOWS matrix outlining: ● Internal Strengths ● Internal Weakness ● External Opportunities ● External Threats And the strategies deployed include: ● Maxi-Maxi Strategy (Strengths and Opportunities) ● Maxi-Mini Strategy (Strengths and Threats) ● Mini-Maxi Strategy (Weakness and Opportunities) ● Mini-Mini Strategy (Weakness and Threats)

(Source: MindTools Editorial Team, n.d., https://www.mindtools.com/pages/article/newSTR_89.htm) Managers must examine these inputs as outlined above and effectively combine them using a well-defined strategy to devise a structure that could improve processes in the organization. Healthcare Market Forces The U.S. healthcare system is based on a market economy that encourages competition. Health services providers must compete for patients and other resources. Therefore, healthcare marketers must deploy creative ways to advertise or market their services via different media, including: ● Fliers ● TV ● Internet – digital marketing ● Mass marketing via mails ● Coupon programs ● Individual client’s testimony ● Reputation and community goodwill

Marketing is a means of creating, communicating, delivering, and exchanging goods and services that are of value to a consumer (American Marketing Association, 2013). Healthcare providers provide quality services to patients and they must create a good brand that may differentiate their services from other competitors to encourage patients to make use of their services. The goal is to create customer loyalty. The 8 Ps of Marketing For healthcare providers to be effective in marketing their products and services, they must examine the 8 Ps of marketing. See figure 3 below. (Source: Marketing for Beginners, 2006, https://marketingforbeginner.blogspot.com/2006/12/marketing-mix.html)

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The 8 Ps make up the marketing mix and have a tremendous impact on the accessibility and delivery of healthcare services. After careful identification of the 8 Ps, providers must follow the strategic marketing process to identify consumer needs and make sure those needs are provided for. The following diagram portrays the strategic marking process. A careful adherence to the 7 steps in the marketing process is critical. However, in some cases one or two steps may be unnecessary. (Source: Mybusinessprocess.net, 2013, http://www.mybusinessprocess.net/strategic-planning-process-an-introduction/) Marketing Terms ● Market segmentation ● Target marketing ● Marketing mix elements ● Relationship marketing ● Competitive positioning ● Niche’ market (See Ch. 6 in textbook for definitions)

Ethics and Social Responsibility Healthcare managers may incorporate ethics and social responsibility into marketing. This can be done in various ways, including: ● Avoiding deceptive practices ● Free sample campaigns ● Free consumer education ● Free trials ● Use of quality products ● Avoid selling expired products ● Ensuring consumer affordability of services by price reductions ● Avoid products that may cause potential harm to consumers ● Acquire required licenses, if necessary ● Ensure proper qualifications for employees Aside from incorporating ethical marketing practices, managers must also ensure that employees follow their professional ethics. Summary Every organization needs to plan strategically. The goal is to identify weaknesses within the organization, correct them, and expedite the achievement of organizational goals. Since healthcare is a business, the need for increased product quality and differentiation to attract clients has increased over the years. Hospitals and other healthcare providers see the need to market their products and services in order to remain competitive. No matter the method used, providers need to remain ethical and execute their marketing programs accordingly. References Buchbinder, S. B., & Shanks, N. H. (2017). Introduction to health care management (3rd ed.). Burlington, MA: Jones and Bartlett Learning. Daniel, H. (2011). Benefits of SWOT analysis. Retrieved on August 28, 2017 from http://benefitof.net/benefits-of-swot-analysis/

Marketing for Beginners. (2006, December). Marketing Mix Classification – 4 Ps 7 Ps 8 Ps. Retrieved from https://marketingforbeginner.blogspot.com/2006/12/marketing-mix.html MindTools Editorial Team. (n.d.). Using the TOWS Matrix. MindTools. Retrieved from https://www.mindtools.com/pages/article/newSTR_89.htm Mybusinessprocess.net. (2013, January 7). Strategic Planning Process – An Introduction. Retrieved from http://www.mybusinessprocess.net/strategic-planning-process-an-introduction/ Listen Dictionary Translate

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