Environment Analysis and Setting Strategic Goals
Arron Foulkes
Environmental Analysis
A business environmental analysis is a process in which the outside factors that may affect the business are evaluated and determined. Such factors include political, economic, social and technical. In an environmental analysis, each of these factors is determined individually in order to evaluate how likely it is for them to affect the business and at what degree (Grant, 2003). Environmental analysis is mainly used to determine the failure or the success of an individual business. Strategy formulation first begins by assessing the internal and external environment for potential strengths and weaknesses (Hunger, & Wheelen, 2011). It assists the business organizational manager to evaluate the opportunities and threats that are likely to come from the implementation of an individual strategy. Environmental analysis is carried out through various analytical models, such as SWOT analysis. Environmental analysis has a number of implications for business strategic planning (Thompson & Martin, 2005). The SWOT aims to expand on the effects of the environmental analysis by dissecting relevant gains and potential issues throughout the organization (Swayne, Duncan, & Ginter, 2008). It helps the planner on the best ways forward that will ensure the success of a business. The implications depend on different components, such as political, economic, social and technical. The environmental analysis is the first step in a strategic plan. It helps the managers to evaluate the opportunities and threats within a business operation (Grant, 2003). The analysis also helps the manager determine the internal strengths and weaknesses within a strategic planning. The analysis of strengths and weaknesses of a business defines a lot the level of business competitive advantage in relation to its market share.
Competitive Analysis
A competitive analysis is essential in a business strategic plan. Competitive advantage helps the organization determine its internal strengths and those of their direct competitors in order to determine the position they stand within the market share (Ingram & Media, 2015). A competitive analysis present the entrepreneurs with clearer understanding of the conditions within a market where they are expected to venture. It also helps the already established businesses to restructure their strategies in order to deal with the issues on the ground (Grant, 2003). Such an effort enables them to counter the competitions by the competitors. A competitive analysis, also, helps the strategic planners to identify and evaluate the marketing gaps that affect its operations. The identified gaps assist the planners to develop the best strategic approaches that will ensure an addition of competitive advantage in order to raise the markets share. Additionally, the competitive analysis helps the planners to determine the best market trends that will ensure business success.
Effects on Banner Health’s Strategic Planning
Banner health is a non-profit health system in the US. It is currently operating more than 20 hospitals together with a number of special health facilities (Banner Health, 2015). Based on this reason, some of legal and political factors that may affect its strategic plan are the legal restrictions and regulations provided by the state government of Arizona and the federal laws of United States (Banner Health, 2015). Economically, the region is facing some economic difficulties due to recent series of recessions. Therefore, to run a non-profit organization might be somehow tricky and challenging. The health center runs its operation by providing everything to the community free of charge. They do not carry out a profit generated business. Based on this reason, to keep it running the market is affected by economic downturn, which has reduced the number of donors and sponsors (Thompson & Martin, 2005). For the services offered for sale, the organization has been established within the regions where people are financially well up (Ingram & Media, 2015). Such financial capability will determine a lot during the strategic analysis.
In most states, the laws favor any health care facilities, especially when they have established free or affordable services (Banner Health, 2015). However, the government has established strict regulations for the health care providers. Every health care provider must meet certain standards before being allowed to offer the services to the public. Such regulations are likely to affect the operational of the health center, whereby, in order for the center to be successful in their operation, the management must set various strategies that comply with the laws.
SWOT Analysis
Banner has set a mission, ‘’to make a difference in people’s lives through excellent patient care’ (Banner Health, 2015). In order to accomplish this mission, the health care center requires some strengths and qualities in management and strategic approaches. The following analysis determines the position of the center to meet this mission together with its goals.
Strengths
The Banner is a non-profit organization that offers a range of medical services to a number of clients free of charge, which has helped them maintain a large base of clients. The company has become a technology leader and has a well-trained and innovative workforce. The company has been offering a variety of inpatient, outpatients and home care to its patients thus winning high popularity within the market. Banner also performs health research through Banner Sun HealthResearch Institute in Arizona, the US and Banner Alzheimer’s Institute (Banner Health, 2015). Such a broad research capabilities has enabled the company build a very strong brand image and a large market share within the region.
Weaknesses
The company is only operating in a small area compared to most of its competitors. It is only running a total of 23 hospitals within some few states within the US (Banner Health, 2015). Therefore, they are required to add some of the hospitals and centers at least in order to ensure successful operations and high competitive state. Additionally offering free services is a very tricky effort of business. The organization a shortage on key personnel and has an inflated system. In the current economy, most organizations are aiming to maximize their profits (Thompson & Martin, 2005). Therefore, for a banner to compete with such a non-profit strategy, it might be so hard for them to acquire a large market share. The modern medical environment, especially in the US is too complex.
Opportunities
The number of the patients who require free medical services is growing every day. For this reason, it is possible for the organization to offer quality services to their customers. The company has been pursuing new technologies and pharmaceutical goods. The competitors have been collaborating thus creating an enabling business environment. The company has developed new areas for treatments.
Threats
The US government has set strict policies, rules, laws and regulations. The cost of manufactured goods is hiking, and the cost of health care and insurance services is skyrocketing currently. There are other large health care providers that have started to offer non-profit services thus threatening the business growth of Banner within the market share.
Based on the above SWOT analysis, it is clear that, even if Banner has some few weaknesses and threats, it stand a better position to ensure successful business operations. Such operations are the ones that enable it attain its primary goals, mission, and objectives. The company’s primary goal is to make the health care services readily available for every person in order to make their lives more enjoyable and free of diseases (Banner Health, 2015). Based on this reason, offering free and quality services will eventually ensure the attainment of such goals.
The company has established various strategic approaches that are capable to facilitate its efforts of coping with any internal or external business challenges. For instance, the ability to comply with various regulations and laws on medicine enables them deal with most external issues (Thompson & Martin, 2005). The development of a good relationship with the public has increased the number of donors who contribute a lot of the financial support for the organization.
Strategic Goals
The goals for the first year include expanding the market share by increasing the number of health centers within each state and to increase the revenue generation within each center by increasing the number of donations and operations.
For the first two years, the plan is:
• To increase the number of hospitals by 5% by acquisition.
• To raise its revenue generation by 20%.
• To increase the number of patients attended to by 20%
The company wants to venture into every state within the US and to maximize its revenue generation in order to be able to deal with various internal and external challenges facing its business operations.
For the fourth year, banner aims:
• To construct a research center at every state.
• To open a health center in every state within the United States.
• To increase its revenue generation by 50% per annum.
Narrative Explanation
Banner health’s primary strategy is aimed to provide free and quality health services to everyone within its market. In reference to the objectives and goals presented in the above section, it is clear that the effort to expand its market share and to venture into every market will be enabled through its strategic approach. Creating a better relationship within the market will ensure the increase in the revenue generation, which will enable them achieve the rest of their goals. Also, establishing numerous research centers and promoting skill and knowledge development in the workplace is likely to increase its competitive advantage, which essential in ensuring market share expansion.
References
Banner Health. (2015). Banner Health. Retrieved on 6th April 2015 from https://www.bannerhealth.com/About+Us/Our+Nonprofit+Mission/_Our+Nonprofit+Mission.htm.
Grant, R. M. (2003). Strategic planning in a turbulent environment: Evidence from the oil majors. Strategic Management Journal, 24(6), 491-517.
Hunger, J. D., & Wheelen, T. L. (2011). Essentials of strategic management (5th ed.). Upper
Saddle River, NJ: Pearson Education.
Ingram, D., & Media, D. (2015). The Advantages of Competitive Analysis in Strategic Planning. Retrieved on 6th April 2015 from http://smallbusiness.chron.com/advantages-competitive-analysis-strategic-planning-18331.html.
Swayne, L. E., Duncan, W. J., & Ginter, P. M. (2008). Strategic management of health care
Organizations (6th ed.). Hoboken, NJ: Wiley.
Thompson, J. L., & Martin, F. (2005). Strategic Management: Awareness, Analysis, and Change.
London: Cengage Learning.
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