STRATEGIC MANAGEMENT OF HEALTH CARE ORGANIZATIONS 7TH EDITION * Value-Adding Service Delivery Strategies Chapter 8 * Chapter 8 Learning ObjectivesUnderstand the decision logic for developing implementation strategies. * Chapter 8 Learning ObjectivesUnderstand the decision logic for developing implementation strategies.Understand that the service delivery portion of the value chain is key in the implementation of strategy. * Chapter 8 Learning ObjectivesUnderstand the decision logic for developing implementation strategies.Understand that the service delivery portion of the value chain is key in the implementation of strategy.Link the results of internal analysis and the development of service delivery implementation strategies. * Chapter 8 Learning ObjectivesUnderstand the decision logic for developing implementation strategies.Understand that the service delivery portion of the value chain is key in the implementation of strategy.Link the results of internal analysis and the development of service delivery implementation strategies.Understand how the pre-service, point-of-service, and after-service strategies of an organization are the means to achieve directional, adaptive, market entry, and competitive strategies. * Chapter 8 Learning Objectives Understand that competitive advantage may be created inside the organization through implementation of the service delivery strategies. * Chapter 8 Learning Objectives Understand that competitive advantage may be created inside the organization through implementation of the service delivery strategies. Understand that through service delivery strategies the organization itself is changed, strengthening competitive advantages and improving competitive disadvantages. * Chapter 8 Learning Objectives Understand that competitive advantage may be created inside the organization through implementation of the service delivery strategies. Understand that through service delivery strategies the organization itself is changed, strengthening competitive advantages and improving competitive disadvantages. Create service delivery strategies that carry out the directional, adaptive, market entry, and competitive strategies. * The Strategic Planning Process Strategic Planning Situation Analysis Strategy Formulation Planning the Implementation External Analysis Internal Analysis Directional Strategies Directional Strategies Adaptive Strategies Market Entry Strategies Competitive Strategies Service Delivery Strategies Support Strategies Action Plans * Strategic Thinking Map Hierarchy of Strategic Decisions and Alternatives Directional Strategies Mission Vision Values Goals Implementation Strategies Service Delivery Pre-service Point-of-service After-service Support Culture Structure Strategic resources Unit Action Plans Objectives Actions Timelines Responsibilities Competitive Strategies Strategic Posture Defender Prospec.

1. STRATEGIC MANAGEMENT OF
HEALTH CARE ORGANIZATIONS 7TH EDITION
*
Value-Adding Service Delivery Strategies
Chapter 8
*
Chapter 8 Learning ObjectivesUnderstand the decision logic for
developing implementation strategies.
*

2. Chapter 8 Learning ObjectivesUnderstand the decision logic for
developing implementation strategies.Understand that the
service delivery portion of the value chain is key in the
implementation of strategy.
*
Chapter 8 Learning ObjectivesUnderstand the decision logic for
developing implementation strategies.Understand that the
service delivery portion of the value chain is key in the
implementation of strategy.Link the results of internal analysis
and the development of service delivery implementation
strategies.
*
Chapter 8 Learning ObjectivesUnderstand the decision logic for
developing implementation strategies.Understand that the
service delivery portion of the value chain is key in the
implementation of strategy.Link the results of internal analysis
and the development of service delivery implementation
strategies.Understand how the pre-service, point-of-service, and
after-service strategies of an organization are the means to
achieve directional, adaptive, market entry, and competitive
strategies.

3. *
Chapter 8 Learning Objectives
Understand that competitive advantage may be created inside
the organization through implementation of the service delivery
strategies.
*
Chapter 8 Learning Objectives
Understand that competitive advantage may be created inside
the organization through implementation of the service delivery
strategies.
Understand that through service delivery strategies the
organization itself is changed, strengthening competitive
advantages and improving competitive disadvantages.
*
Chapter 8 Learning Objectives
Understand that competitive advantage may be created inside
the organization through implementation of the service delivery

4. strategies.
Understand that through service delivery strategies the
organization itself is changed, strengthening competitive
advantages and improving competitive disadvantages.
Create service delivery strategies that carry out the directional,
adaptive, market entry, and competitive strategies.
*
The Strategic Planning Process
Strategic Planning
Situation Analysis
Strategy Formulation
Planning the Implementation
External Analysis
Internal Analysis
Directional Strategies
Directional Strategies
Adaptive Strategies
Market Entry Strategies

5. Competitive Strategies
Service Delivery Strategies
Support Strategies
Action Plans
*
Strategic Thinking Map
Hierarchy of Strategic Decisions and Alternatives
Directional Strategies Mission
Vision
Values
Goals
Implementation Strategies
Service Delivery Pre-service Point-of-service After-service
Support Culture Structure Strategic resources
Unit Action Plans Objectives Actions Timelines
Responsibilities
Competitive Strategies
Strategic Posture Defender Prospector Analyzer (Reactor)
Positioning
Market-wide Cost leadership Differentiation
Market Segment Focus/Cost
leadership Focus/
differentiation

6. Market Entry Strategies
Purchase Acquisition Licensing Venture capital
investment
Cooperation Merger Alliance Joint venture
Development Internal
development Internal
venture
Adaptive Strategies
Expansion of Scope Diversification Vertical Integration Market
Development Product Development Penetration
Contraction of Scope Divestiture Liquidation Harvesting
Retrenchment
Maintenance of Scope Enhancement Status Quo
*
The Health Care Value Chain
Pre-Service
Market Research
Target Market
Services Offered/
Banding
Pricing
Distribution/Logistics
Promotion
Point-of-Service

7. Clinical Operations
Quality
Process Innovation
Marketing
Patient Satisfaction
After-Service
Follow-up
Clinical
Marketing
Billing
Follow-on
Clinical
Marketing
Organizational Culture
Shared Assumptions Shared Values Behavioral Norms
Organizational Structure
Function Division Matrix
Strategic Resources
Financial Human Information Technology
Support Activities
Service Delivery
Add Value
Add Value
*
The Health Care Value Chain
Pre-Service
Market Research
Target Market
Services Offered/
Banding

8. Pricing
Distribution/Logistics
Promotion
Point-of-Service
Clinical Operations
Quality
Process Innovation
Marketing
Patient Satisfaction
After-Service
Follow-up
Clinical
Marketing
Billing
Follow-on
Clinical
Marketing
Organizational Culture
Shared Assumptions Shared Values Behavioral Norms
Organizational Structure
Function Division Matrix
Strategic Resources
Financial Human Information Technology
Support Activities
Service Delivery
Add Value
Add Value
*
Logic for Implementation Strategies
Ends

9. Directional Strategies
Adaptive Strategies
Market Entry Strategies
Competitive Strategies
*
Logic for Implementation Strategies
Ends
Directional Strategies
Adaptive Strategies
Market Entry Strategies
Competitive Strategies
Value-Adding
Strategies
Service Delivery
Strategies
Pre-Service
Point-of-Service
After-Service
*
Logic for Implementation Strategies
Ends

10. Directional Strategies
Adaptive Strategies
Market Entry Strategies
Competitive Strategies
Value-Adding
Strategies
Service Delivery
Strategies
Pre-Service
Point-of-Service
After-Service
Support Strategies
Organizational Culture
Organizational Structure
Strategic Resources
*
Logic for Implementation Strategies
Ends
Directional Strategies
Adaptive Strategies
Market Entry Strategies
Competitive Strategies
Value-Adding
Strategies

11. Service Delivery
Strategies
Pre-Service
Point-of-Service
After-Service
Support Strategies
Organizational Culture
Organizational Structure
Strategic Resources
Action Plans
Objectives
Actions
Timelines
Responsibilities
*
Logic for Implementation Strategies
Ends
Directional Strategies
Adaptive Strategies
Market Entry Strategies
Competitive Strategies
Means
Value-Adding
Strategies

12. Service Delivery
Strategies
Pre-Service
Point-of-Service
After-Service
Support Strategies
Organizational Culture
Organizational Structure
Strategic Resources
Action Plans
Objectives
Actions
Timelines
Responsibilities
Ends
Means Ends
Means

13. *
Internal Processes & Support Activities
Ways in which things are accomplished in the organization and
occur throughout the organization should also be reviewed
Are the current processes and support activities (FS, HR, IT,
etc) aligned with the strategies of the organization?
*
Developing Value-Adding Strategies
Identify the requirements
of the selected:
Directional Strategies
Adaptive Strategies
Market Entry Strategies
Competitive Strategies
Results of internal
Environmental analysis:
Pre-Service
Point-of-Service
After Service
Culture
Structure
Strategic Resources

14. *
Developing Value-Adding Strategies
Identify the requirements
of the selected:
Directional Strategies
Adaptive Strategies
Market Entry Strategies
Competitive Strategies
Results of internal
Environmental analysis:
Pre-Service
Point-of-Service
After Service
Culture
Structure
Strategic Resources
Compare Strategy
Requirements with
Internal Analysis
*
Developing Value-Adding Strategies

15. Identify the requirements
of the selected:
Directional Strategies
Adaptive Strategies
Market Entry Strategies
Competitive Strategies
Results of internal
Environmental analysis:
Pre-Service
Point-of-Service
After Service
Culture
Structure
Strategic Resources
Compare Strategy
Requirements with
Internal Analysis
Maintain
Change
*

16. Developing Value-Adding Strategies
Identify the requirements
of the selected:
Directional Strategies
Adaptive Strategies
Market Entry Strategies
Competitive Strategies
Results of internal
Environmental analysis:
Pre-Service
Point-of-Service
After Service
Culture
Structure
Strategic Resources
Compare Strategy
Requirements with
Internal Analysis
Guidance for
Organizational Units
To Maintain
Maintain
Change

17. *
Developing Value-Adding Strategies
Identify the requirements
of the selected:
Directional Strategies
Adaptive Strategies
Market Entry Strategies
Competitive Strategies
Results of internal
Environmental analysis:
Pre-Service
Point-of-Service
After Service
Culture
Structure
Strategic Resources
Compare Strategy
Requirements with
Internal Analysis
Guidance for
Organizational Units
To Maintain
Guidance for
Organizational Units
To Expand

18. Guidance for
Organizational Units
To Contract
Maintain
Change
*
Developing Value-Adding StrategiesValue-Adding Service
Delivery StrategiesResults of Internal AnalysisRequirements
of Selected StrategiesComparison of Requirements and Internal
AnalysisMaintain or ChangePre Service
Research
Target Market
Branding
Pricing
Distribution
PromotionPoint-of-Service
Clinical OpsAfter-Service
Follow-up
Billing
Follow-on

19. *
Pre-Service Activities
Market and Marketing Research
Identifying the Target Market
Branding
Pricing
Distribution/Logistics
Promotion
*
Maintaining Pre-Service Activities
Engage in periodic customer focus groups and market research
to understand the wants, needs, and desires of the organization’s
target markets and whether they are or are not being satisfied
Monitor the demographic, psychographic, and health status
characteristics of the service area (with particular attention to

20. trends in the target markets)
*
Maintaining Pre-Service Activities (con’t)
Continually communicate to physicians, patients, third-party
payors, and others concerning the type and range of services
offered, pricing, and branding
Monitor promotional effectiveness
Monitor customer ease of system entry (logistics)
*
Changing the Pre-Service Activities
Change the services attributes to better match the expectations
of the target market
Train employees to better provide the new services
Redefine the target market to match the changing demographic,
psychographic, and health status characteristics of the service
area
Provide price discounts or price classes among members of the
target market
*

21. Changing the Pre-Service Activities (con’t)
Change the balance among advertising, personal selling, and
direct marketing (one-to-one marketing)
Brand individual products (as opposed to the organization’s
name as the brand)
Redesign parking lots, walkways, signage, and reception
*
Point-of-Service Activities
Clinical Operations
Mass Customization
Quality of Operations
Clinical Process Innovation
Marketing
*
Maintaining Point-of-Service Activities
Monitor service quality through asking customers (physician,
patient, payor, other) if there is a way the experience could be
improved – as they are the ones receiving the service
Monitor clinical (patient) and organizational (financial)
outcomes
Institute quality programs in key service areas

22. *
Maintaining Point-of-Service Activities (con’t)
Benchmark other organizations’ processes
Measure the organization’s efficiency (personnel, assets, costs)
against peer organizations and industry standards
Revise rules and regulations that limit process innovation
Continue to communicate and emphasize the individuality of
customers
*
Changing Point-of-Service Activities
Institute a CPI program for service delivery
Reengineer critical service delivery activities
Provide quality enhancement training for service delivery
personnel
Institute a cost-cutting program
Provide incentives for efficiency suggestions
Reduce dramatically rules and regulations that limit innovation
Provide savings or revenue sharing with employees to
encourage innovations
*

23. Changing Point-of-Service Activities (con’t)
To change marketing point-of-service activities, strategic
managers should:
target unserved consumers
increase market penetration activities
serve new markets with existing products
offer new products for current consumers
improve differentiation among services offered
*
After-Service Activities
Follow-Up
Billing
Follow-on
*
Maintaining After-Service Activities
Emphasize and train employees on telephone and email
communication and etiquette
Emphasize patient satisfaction
Improve the “readability” of billing statements
Stress the importance of correct billing statements and ensure
their accuracy
Develop relationships in the referral network to facilitate
follow-on activities

24. *
Changing After-Service Activities
Make follow-up an explicit part of patient (customer) care
Keep a log of patient follow-up as a part of the patient/customer
record
Train employees on telephone and email communication and
etiquette
Emphasize customer satisfaction at staff meetings
Redesign the billing statement with the assistance of a variety
of stakeholders, including patients and include definitions of
complicated medical terms in the statement
*
Changing After-Service Activities (con’t)
Inform customers about billing procedures
Clear confusion about billing charges and which charges are to
be paid by insurance
Continue to improve relationships with payors
Develop more and better relationships with referral
organizations
Develop a list of options for referral patients, explaining the
characteristics and pricing of each
*

25. Learning through Change and Maintenance Strategies Affect
Strategic Thinking and Planning
Strategic Planning
External Analysis
Internal Analysis
Directional Strategies
Situation Analysis
Strategy Formulation
Planning the Implementation
Directional Strategies
Adaptive Strategies
Market Entry Strategies
Competitive Strategies
Service Delivery Strategies
Support Strategies
Action Plans
Strategic Thinking
External Orientation
Analyze data
Question Assumptions
Generate New Ideas
Managing
Strategic
Momentum

26. Managerial Action
Strategy Evaluation
Emergent Learning
Re-initiate Strategic
Thinking
*
Managing Strategic Momentum
Service Delivery StrategiesHave the pre-service activities
provided customers with need satisfying services?Have the pre-
service activities provided the right price, level of information
to current and potential customers, and locations?Are the pre-
service logistics appropriate to the service?Are the point-of-
service activities sensitive to changing customer needs?Are the
point-of-service activities efficient? Effective? Has the quality
of the services changed?
*

27. Managing Strategic Momentum
Service Delivery Strategies (con’t)Has the organization
innovated delivery of its services?Is the delivery of services
flexible (can accommodate special customer needs)?Is there
proper follow-up with customers?Is the billing system timely,
accurate, and user friendly?Are the follow-on strategies
appropriate?
*
Chapter 8 Conclusions
After reading Chapter 8, you should be able to define the
following terms:Key TermsKey TermsAfter-Service
StrategyMass CommunicationFollow-OnPoint-of-Service
StrategyFollow-UpPre-Service StrategyMarket ResearchTarget
MarketMarketing ResearchValue-Adding Service Delivery
Strategies
*