Jack: Hi, everyone,
and welcome to this week's lecture
on Strategic Management and Marketing.
In this module, we're going to discuss
the key concepts of strategic management,
do an overview of strategic thought in healthcare,
and strategic management instruments in organizations,
learn about marketing and strategic management,
and look at strategy formulation and alternatives.
So to begin with,
what are some key considerations
when we think about strategic management?
So strategic management is important
throughout the continuum of care.
Healthcare organizations work with people
who are being diagnosed, being treated,
going through palliative care, et cetera,
and it's important to manage
all of those different aspects of care strategically,
for lack of a better word.
One way to do this is to utilize a balanced scorecard.
A balanced scorecard is a set of measures
that gives top managers a fast
but comprehensive view of the business.
It includes financial measures that tell
the result of actions already taken,
and it complements those financial measures
with operational measures on customer satisfaction,
internal processes, and the organization's innovation
and improvement activities,
which are all operational measures
that are the drivers of future financial performance.
One way to think of the balanced scorecard is
the dials and indicators in an airplane cockpit.
For the complex task of navigating and flying an airplane,
pilots need detailed information
about many aspects of the flight.
They need information on how much fuel is left,
how fast they're going,
the altitude at which they're flying,
their bearing or direction,
their destination, and other indicators
that summarize the current and predicted environment.
Importantly, it's not just
about what's going on at the moment,
it's also looking to the future.
Relying on only one indicator or instrument
is not able to give this complex picture.
In a similar fashion,
the complex management of organizations today
require many indicators and a comprehensive view
of all of those indicators.
One way to do that is to use a balanced scorecard.
Next, the triple bottom line
describes some of the key outputs
or key indicators of an organization.
How happy are people?
How satisfied are people,
both the people working in the organization,
the people the organization serves,
and other people in the community?
What are the profits?
Financially, how much money is the organization making?
Are there other ways to measure profit?
And, finally, the planet.
Is this organization sustainable
both in terms of the material goods,
but also in terms of longevity
of the venture or of the organization?
Finally, three key aspects
of the organization are the directional strategy,
its mission, its vision,
and its value, which we'll discuss in this module
and also future modules.
So to begin with, there's a couple of different ways
to analyze the operation of an organization
internally and externally.
One is a SWOT analysis where SWOT stands
for the strengths, weaknesses, opportunities, and threats.
It's a planning process that helps
a company or organization overcome challenges
and determine which new leads to pursue.
You should perform a SWOT analysis
before you commit to any sort of organizational action,
whether you're exploring new initiatives,
revamping internal policies,
considering opportunities to pivot
or altering a plan midway through its execution.
The primary objective of a SWOT analysis is
to help organizations develop a full awareness
of all the factors involved in making a business decision.
It's impossible to accurately map out a small business
or a small organization's future
without first evaluating it from all angles,
which includes looking exhaustively at all
of the strengths, weaknesses, opportunities, and threats
that are facing the organization.
Next, we'll discuss Porter's Five Forces,
which this diagram depicts nicely.
So at the center of the diagram is the rivalry
among existing competitors.
It's important to know the other operators in the field
and in that sector to weigh
and consider their strengths and weaknesses
and where you fit in the market.
Other aspects that help to determine this rivalry
include the bargaining power of suppliers,
the threat of substitute products or services,
the threat of new entrants,
and the bargaining power of buyers.
So now when we turn to strategic marketing,
which is closely linked to strategic management,
we'll discuss some of the key aspects
of designing an effective marketing strategy.
The first is having a strong focus on customers.
So who are your customers?
How do you communicate to them?
How do you reach them?
Is it through electronic ads?
Is it through paper ads?
What is your communication strategy?
And then, how are you communicating these messages?
What languages are important?
What level of language?
Are people very educated that you're serving?
Are they less educated?
A common rule of thumb
for designing strategic marketing messages
and communications is that they should use words
that a fifth grader can understand.
Marketing also has a role of achieving buy-in
or helping people buy into the mission of an organization.
And similar to focusing on customers,
it's important to identify your target markets
and describe those markets and understand them
before you can develop an effective communication
or marketing strategy.
Next, we'll turn to the Ansoff Matrix, which is a tool
that can help you to understand messages and markets.
So this matrix compares existing markets
and new markets on one axis,
and existing products and new products on the other axis.
So in the case where you have
an existing product in an existing market,
you're focused on providing more
of an existing product into an existing market,
which is described as market penetration.
In contrast, when you're introducing
an existing product to a new market,
we will describe that as market development.
When you're introducing a new product
into an existing market,
you're participating in product development.
And when you're introducing a new product into a new market,
we describe that process as diversification.
And feel free to read more
about these examples on this slide
and also in the textbook chapter this week.
So now, as we described a little bit
about understanding your market
and understanding your customer base,
here we list some factors that influence buyer behavior.
So the culture of the buyers, their ethnicity or race,
the political system to which they belong,
and their political beliefs,
and their socioeconomic status,
and their gender and age.
There are many other factors that influence buyer behavior,
and this is just a subset or a list of examples.
Next, here are some tips for conducting market research.
It's important to identify a potential need in the market
and to consider competitive dynamics in the market.
And this is where the Ansoff Matrix will come in handy.
It's also important to think about market sizing,
how many buyers there are,
and how much demand there might be?
The competition, who else is providing your product
or a similar product in the market?
Which is related to the substitution
or the alternative choices that a customer may have.
And prices closely related to these too.
Can a customer obtain your product
at an equal or less lesser value
from an existing supplier in that market?
So now when we look at market segmentation and targeting,
we see that market segmentation is described
as breaking the market down into identifiable subgroups.
So there's demographics, psychographics,
geographic or service area, and utilization.
An example of that is demographics, for example.
Are the people participating in the market older,
or are they younger?
What is their age?
Are they children?
Are they less than 18?
Are they between the ages of 18 and 65,
or are they 65 plus?
Similarly, utilization is oftentimes segmented
into high use, medium use, and low use, or no use at all.
Targeting describes the practice
of making goods or services, especially available,
or tailoring goods and services
to one segment of the market.
And it's only beneficial if that segment has unique needs
and is large enough to merit the resources
involved in creating that specialized product
or honing that product
for the specific aspect of the market.
Next, let's dive into the four Ps of marketing.
The first, the product.
Is the product tangible?
Is it concrete?
Is it physical or material, or is it an intangible service?
It's important to assess the strengths and weaknesses
as well as competition,
as we've been mentioning,
looking at the different people in the market.
What is the lifecycle of the product?
Is it something that people use up or is it permanent?
Will people need to replace it over time?
Or is it something they buy once and never need again?
And what's the portfolio of products?
Are there other products like it?
Can it be marketed with another item in the portfolio?
Next, the price.
So it's important to note that the price of an item
both includes the monetary price
as well as any sacrifices a customer
has to make to obtain that product.
So whether that's time, which can include travel time,
or time waiting in line, discomfort, et cetera.
And here we list seven steps
in terms of determining the price
or involved with determining the price of an item.
Next, what's the place?
So we've spoken a lot about this in terms of the market,
but it's also important to think about the place,
the physical place in which this item will be sold.
Will be sold online,
will be sold in a physical brick and mortar store,
at a healthcare facility?
And it's important to remember
that there's complex multilink distribution chains
for most physical goods.
And these distribution chains, as we noticed during Covid,
can easily be impacted due to their multifactorial nature.
So related to container ships,
airplanes, trucking, et cetera,
there are many, many aspects
of the modern transportation system.
And an error or issue with any of those segments
or any of the pieces of that chain can lead
to delays, increased costs, et cetera.
Finally, the promotion.
So what strategies is the organization using
in terms of its public relations policy?
Does it have good publicity?
Are there promotes or are there events
or special promotions for specific items
for the company as a whole?
This is related to the advertising strategy
that the company uses, the marketing integration.
And it's important to remember that it's always important
to evaluate the marketing plan.
So finally, in conclusion, one of the most important things
to do when designing a marketing strategy is
to analyze the internal environment of the organization
and the external environment,
the individuals with which the organization works.
By looking at this environment,
that will help in understanding the needs
of customers and stakeholders.
And then after understanding those needs,
you're able to better allocate resources
to support the organization's goals and objectives.
In this lecture, we presented several tools
and strategies for looking
at marketing strategy, markets, and pricing.
And while these are helpful,
there are others in the textbook,
on the internet, et cetera,
that you might find more useful
for your particular organization or healthcare facility.