Deck 10: Monitoring, Fine-Tuning, and Changing the Strategy

Question 1

Exactly what is an organization paying attention to through its strategic monitoring program?

Answer 1

$\bullet$ The assumptions and goals of the strategies
$\bullet$ The continued validity of the assumptions
$\bullet$ The performance of the strategies in comparison with their goals, in light of changes in environmental circumstances
$\bullet$ The gaps between original assumptions and new environmental circumstances
$\bullet$ The gaps between original goals and current performance
$\bullet$ Making appropriate adjustments and corrections

Question 2

What are some of the elements and trends in the health care industry that make strategic monitoring especially important?

Answer 2

$\bullet$ Commercial lives of products are shorter.
$\bullet$ Product development times are longer and more expensive.
$\bullet$ New technology developments (clinical and information) occur more frequently.
$\bullet$ More competitors in the domestic market and more foreign competitors.
$\bullet$ More for-profit companies and money-driven entrepreneurs active in the health care industry.
$\bullet$ Resulting in competition that is more intense and ruthless.
$\bullet$ Resulting in more rapid and dramatic changes in health care business models and industry structure.
$\bullet$ External environment is more complex with more variables to be considered.
$\bullet$ More laws and regulations applying to health care and bioscience, with new ones being issued at an accelerating pace.
$\bullet$ Accelerating change in every aspect of life.
$\bullet$ Accurate projections are more difficult to make.
$\bullet$ Time span for valid projections and plans is shorter, and they become obsolete sooner.
$\bullet$ Critical success factors in the industry change more often.
$\bullet$ As a result of all these changes, the health care industry has become more fragmented and complex (40 years ago, there were no MCOs, specialty hospitals, hospitalists, physician assistants, Medicare, Medicaid)

Question 3

List 10 significant developments or changes in an organization's competitive or market environment that might be discovered by a good strategic monitoring program.

Answer 3

$\bullet$ Changes in customers' demands for products and product features.
$\bullet$ New technologies that have become available in the industry and, of these, those which are essential to maintain competitive position.
$\bullet$ Increase or slowing in the pace of economic growth in our markets served.
$\bullet$ Competitors' reactions to the organization's strategies.
$\bullet$ New strategies initiated by competitors. Other actions, strategic or otherwise, by them that threaten the viability or success of our strategies or create opportunities for us to initiate successful new strategies.
$\bullet$ New competitors that have entered the industry or existing competitors that have departed?
$\bullet$ New products/services introduced to the market or existing products dropped.
$\bullet$ New substitute products/services that have been introduced to the markets.
$\bullet$ New market segments that have emerged in the overall market.
$\bullet$ Any competitors' strengths that have become weaker or weaknesses that have become stronger.
$\bullet$ Any of our own strengths that have become weaker or weaknesses become stronger.
$\bullet$ New opportunities that have emerged in the industry or markets.
$\bullet$ New threats that have emerged in our industry or markets.
$\bullet$ Evidence of new demographic trends that may affect the size or preferences of the customer base, shrink or expand the markets, or create entirely new markets.
$\bullet$ New laws enacted, court rulings issued, or governmental administrative decisions rendered that create legal doubts about some features of our strategies or that free up new courses of strategic action that previously seemed blocked.
$\bullet$ Organization appears to be moving closer to or farther away from its long-term/fundamental strategic objectives.
$\bullet$ In light of changes in external environmental conditions and in the resources and competencies that it can apply to strategic initiatives, does its current vision and mission still makes sense.
$\bullet$ Any key people left the organization, upon whom the strategies depend. New people joined the staff with competencies that make new strategies possible.
$\bullet$ Conditions in the markets for financial capital (debt and equity) changed sufficiently for it to consider raising additional capital to fund new, more expansive strategies.
$\bullet$ As strategies were implemented, gaps or failings discovered in the competencies thought to be possessed.

Question 4

Compare and contrast the monitoring of trends and events in the past, the present, and the future. Explain how monitoring can occur in each of those three time frames and their significance to the strategy implementation process.

Question 5

Describe the steps that a managed care organization might follow in setting up a strategic monitoring program. Explain how those steps and the resulting program might differ in a small physician group practice.

Question 6

What are the differences in strategic monitoring programs at the level of multi--SBU corporations and individual SBU's?

Question 7

What are some metrics that the strategic monitoring program of a multi-SBU corporation might want to track?

Question 8

List seven metrics that a pharmaceutical company (or a health plan, or a large multispecialty group practice) would want to follow through its strategic monitoring program.

Question 9

What policies or procedures might a health care organization use to decide when changes in its external environment require some type of change or adjustment in its strategies?

Question 10

Discuss some of the changes that an organization might make to an ongoing strategy in response to developments it has observed in its external environment.