3 & 4 - Strategic Management Flashcards
Define strategic planning
Process of determining mission/ vision statements, formulating goals, envisioning the future, planning the steps to achieve desired goals/outcomes
Define strategic management
Process of implementing and evaluating decisions in order to reach the organizations goals and objectives while ensuring the organization is aligned w/ the external (competitive) environment
Describe the 4 stages of strategic planning, and which step of Kaplan and Norton each coincides with
- Environmental scan (step 1 in Kaplan & Norton) – gathering, organizing and analyzing the competition, industry, and environment
- Strategy formulation (steps 2, 3, and 4) – prioritize strategies and determine resources required to reach goals
- Strategy implementation (step 5)
- Strategy evaluation (step 6)
Describe a mission statement
- Defines purpose and primary objectives
- Statement of how an organization will achieve its purpose/ how it is different
- Broad statement that is concise
- May change w/ organizational change
- Statement should be related to the business (products, services, customers, quality, efficiency)
- *Major part of strategic planning
- Feasible, clear, inspiring, precise, unique, credible
Describe a vision statement
- Indicates where the organization wants to be in the future (dreams and aspirations)
- Should be inspirational
- Doesn’t change even if the environment changes – speaks to what the organization represents
- Aligned w/ organizational culture and values
- Harmonize, clear, realistic, short and concise
What is the major difference between a mission statement and a vision statement?
- Mission statement is more for customers b/c tells what the business is
- Vision statement more for employees b/c tells them where you want to go
What are core values?
- Fundamental beliefs of the organization
- Guiding principles for behaviour and action of an organization
- Shared ideas w/in the organization
- Values should be incorporated into the training, rewarding and consequences for employees
What are SMART goals?
- Specific
- Measurable
- Achievable
- Realistic
- Time-framed
Describe an environmental scan
- Analysis of internal and external environment of an organization
- Considers trends that affect the business now and what could affect it in the future
- Involves staff and customer opinions
Describe an internal analysis
- Identifies strengths and weaknesses in the organization
- Includes employees, management, and stakeholders (px, HCPs, regulatory bodies, etc.)
- Surveys, discussions, interviews w/ each employee, focus groups
Describe an external analysis
- Competition – brands, services, products, pricing strategies; constant monitoring
- Gov’t – policy changes, payment changes
- Demographics – helps w/ forecasting future trends
- Technology
What should be considered regarding strengths and weaknesses?
- People/skills (expertise or skills of employees, customer service, staffing levels, right people for the job)
- Organizational structure (business structure, communication w/ employees, management)
- Facilities/location (availability and condition of business, accessibility, parking)
- Market assets (image/ reputation in the eye of the customer, services, brand recognition)
What should be considered regarding opportunities?
- What needs are not being met in the marketplace?
- Do local demographics support what you want to do?
- Can you offer a service that is better than your competitors?
- How is the environment changing to your advantage or disadvantage?
What should be considered regarding threats?
- What potential problems might threaten the success of organizations initiatives?
- What potential new competitors may arise? How might the firm’s current competitors respond to your changes/services?
- What changes may be occurring in the environment to make your product or service obsolete?
What are Porter’s 5 forces?
- Threat of new entrants/competitors
- Customers buying power
- Threat of substitutes (products or services)
- Supplier power
- Rivalry among competing firms
What is the difference between Porter’s 5 forces and a SWOT analysis?
Porter’s 5 forces looks more externally than a SWOT analysis, so not as relevant for pharmacy b/c we need to look internally as well
Describe “threat of competition”
- Competitive rivalry is most likely in industries w/ many competitors
- Large # of competitors = lower price of product or service (professional fees)
- In pharmacies, professional fees are not the money-maker, so pharmacists have to focus on services and what they can do differently
Describe “threat of new entrants” (what would be easy or difficult to enter)
- Easy to enter -> common technology, low cost to enter marketplace, absence of customer loyalty, absence of strong brands; no reason for people to go to one place over another
- Difficult to enter -> patented product/ service, high cost for entry into the marketplace, high customer loyalty, well established brands
Describe “bargaining power of buyers/ customers”
- Small customer base = more power to demand service/ pricing in order to keep them
- Others supplying the same service/ product = risk customers will shop for the best deal
- Strong branding/ brand identity = less chance customers will change
Describe “threat of substitutes”
- How easy is it for a customer to switch from a product or service that someone else offers?
- Do reasonable alternatives to your product or service exist?
Describe “bargaining power of suppliers”
- How much power does the supplier have?
- Fewer suppliers = more power they have/higher costs
What are the steps of the planning phase?
- Identify who your customers are and what do they need
- Develop mission statement and vision statement
- Review SWOT analysis
- Prioritize goals and strategies
- Define who and how results will be measured
Describe how to plan a strategy
- Set objectives and targets -> what is our strategy and what are the long term and short-term goals?
- Evaluate the environment -> what are the initiatives required to compete in the environment?
- Resources required?
- Performance analysis -> who does the analysis and when?
What are the steps of the implementation phase?
- Organize and educate teams for implementation of different phases
- Communicate the plan
- Develop action plans, timelines, and targets
- Implement the changes
What are the steps of the evaluation phase?
- Regular reporting by those involved
- Adjust when needed or celebrate successes
- Use of reporting methods (scorecards, dashboards)
- Continued communication to employees
How should you evaluate strategies?
- Review the main strategies (internal and external forces)
- Measuring performance
- Quantitative (financial ratios)
- Qualitative (human factors)
- Corrective actions
What is a balanced scorecard?
- Tool used to help an organization align their shared vision focusing on strategies and results
- Used to measure the effectiveness of an activity against the strategic plan
- Often used in hospitals, long-term care facilities, mental health centres, health insurance companies, and some chain pharmacies
What is a key performance indicator (KPI)?
- KPI = measurable value that determines if an organization is reaching key objectives (performance measurement)
- Quantifiable measure of quality that is clearly linked to organizational priorities
- Monitors effects of practice improvements, compare results from competitors/ industry leaders (benchmarking), track outcomes in healthcare
Examples of KPI’s?
- Patient care outcome
- Productivity outcome
- Cost outcomes
