Running Head: ENVIRONMENTAL ANALYSIS 1 Environmental Analysis 11 Environmental Analysis Pamela S. Waters HCS/586 Debra Schrager, Instructor Environmental Analysis of Arkansas Children Hospital Arkansas Children Hospital is a private not-for-profit organization. The hospital provides healthcare facilities to children at the age of birth to the age of 21. It also offers an extensive variety of healthcare services in the therapeutic field including asthma, infectious diseases, cardiology, immunology, pharmacology, oncology, neuroscience, rehabilitation, pharmacology and others (ACH Child & Family Services, n.d.). When conducting a comprehensive SWOT analysis of the healthcare organization, it outlined an in-depth strategic analysis of the businesses and activities of the organization. Based on the SWOT analysis, this paper will present an environmental analysis of Arkansas Children’s Hospital that outlines how important it is to develop a strategic plan that will be beneficial to the organization as well as the accomplishment of the visions, goals and mission. Conducting an environmental analysis of the business is very important in that it allows you to accurately evaluate the surrounding circumstances as it relates to the success or failure of the specified organization. In this case, Arkansas Children’s Hospital can conduct an environmental analysis that will assist them in implementing a strategic plan that will be beneficial for the organization and the local communities. Environmental analysis is a process which is used to identify all the internal and external elements that can affect the performance of an organization (Wheelen & Hunger, 2010). In order to be successful, the hospital will need to adapt to their internal environment by including financial and human resources, operations, technologies and policies to their external environment. This therefore calls for the performance of the environmental analysis to identify the possible influence of given aspects of the operating and general environments of the ACH’s activities of healthcare provision to children. The purpose of the environmental analysis is to identify the threats and opportunities in the healthcare environment with regard to its weaknesses and strengths. An environmental analysis is also conducted as a way to gain a better understanding of the opportunities, threats, weaknesses and strengths of ACH to know where adjustments and corrective measures should be put in the development of the strategic plan. The environment analysis is conducted also to assist in the process of developing the strategic plan that helps the hospital management to make an informed decision concerning the external environment of the hospital. Some of the external environmental factors that require consideration involve changes in politics of the day, environment pollution regulations, change in ...

1. Running Head: ENVIRONMENTAL ANALYSIS
1
Environmental Analysis 11
Environmental Analysis
Pamela S. Waters
HCS/586
Debra Schrager, Instructor
Environmental Analysis of Arkansas Children Hospital
Arkansas Children Hospital is a private not-for-profit
organization. The hospital provides healthcare facilities to
children at the age of birth to the age of 21. It also offers an
extensive variety of healthcare services in the therapeutic field
including asthma, infectious diseases, cardiology, immunology,
pharmacology, oncology, neuroscience, rehabilitation,
pharmacology and others (ACH Child & Family Services, n.d.).
When conducting a comprehensive SWOT analysis of the
healthcare organization, it outlined an in-depth strategic
analysis of the businesses and activities of the organization.
Based on the SWOT analysis, this paper will present an
environmental analysis of Arkansas Children’s Hospital that
outlines how important it is to develop a strategic plan that will

2. be beneficial to the organization as well as the accomplishment
of the visions, goals and mission.
Conducting an environmental analysis of the business is very
important in that it allows you to accurately evaluate the
surrounding circumstances as it relates to the success or failure
of the specified organization. In this case, Arkansas Children’s
Hospital can conduct an environmental analysis that will assist
them in implementing a strategic plan that will be beneficial for
the organization and the local communities.
Environmental analysis is a process which is used to identify all
the internal and external elements that can affect the
performance of an organization (Wheelen & Hunger, 2010). In
order to be successful, the hospital will need to adapt to their
internal environment by including financial and human
resources, operations, technologies and policies to their external
environment. This therefore calls for the performance of the
environmental analysis to identify the possible influence of
given aspects of the operating and general environments of the
ACH’s activities of healthcare provision to children.
The purpose of the environmental analysis is to identify the
threats and opportunities in the healthcare environment with
regard to its weaknesses and strengths. An environmental
analysis is also conducted as a way to gain a better
understanding of the opportunities, threats, weaknesses and
strengths of ACH to know where adjustments and corrective
measures should be put in the development of the strategic plan.
The environment analysis is conducted also to assist in the
process of developing the strategic plan that helps the hospital
management to make an informed decision concerning the
external environment of the hospital. Some of the external
environmental factors that require consideration involve
changes in politics of the day, environment pollution
regulations, change in population demographics and
technological development within the health sector.
It is essential to note that the environmental analysis plays a
critical role in policy decisions and corporate planning.

3. The environmental analysis is basically a three step process
where the organization has to first identify the environmental
factors that affect the operations of Arkansas. For example,
ACH may consider prevalence of certain diseases and their
causes on children. The organization then gathers information
regarding the selected environmental factors which can
probably impact on the activities of the organization. This
information is critical in forming the strategic plan for the
organization since they serve to forecast the impact of each of
the environmental factors on the organization and project ways
of improving the activities of the healthcare organization in
order to achieve its mission, goals and objectives.
Based on the vision of the Arkansas Children Hospital, the
organization aims at transforming the delivery of healthcare to
children in Arkansas, the local environment and abroad (ACH
Child & Family Services, n.d.). This analysis is also important
in that it will help in the establishment of the needed
transformations through the use of research, innovative
advancements in care provision and the advocacy for education
that can enhance healthcare improvement. Generally, the
environmental analysis is evaluated in the process of developing
strategic plan for the organization.
The effectiveness of the business plan depends on how well the
organization management understands their business
(Muralidaran, 2007). The developed strategic plan for the
hospital should be in a position to respond to different
environment conditions. Failure to respond accordingly to the
business environment exposes the hospital to the risk of failure.
The hospital utilizes and continues to implement the effective
business environment analysis to forecast on how future
activities that might be undertaken by the hospital will alter the
hospital operations or business.
Arkansas Children’s Hospital will also develop the proposed
business plan basing it on the forecast that the environmental
analysis will have helped to develop. The hospital will then
prepare for all the possible events that are anticipated to occur.

4. Some of the possible change events may involve government
changing the tax policy for health organizations. In the case of
such event occurring, the hospital accounting practices will be
affected by the period of implementation. The proposed
strategic plan for the hospital must be able to address the issue
and provide the best alternative to handle the changes.
The environmental analysis should also help to develop a
business plan that allows flexibility. The flexibility, in this
case, refers to the ability to respond to unpredictable changes
within the health sector. The developed strategic plan must be
in a position to prepare the hospital for the best strategy to
handle such occurrences.
The competitive analysis allows us to develop matrices for
spotting underserved or unreserved gaps in the market and
strategically plan towards filling them. Additionally, through
competitive analysis, we identified the steps that other health
organizations take in improving their healthcare provision,
particularly with regard to professionalism, technology and
relationship with their clients.
Conducting the competitive analysis was effective in that it
gave us the opportunity identifying various opportunities for
differentiating our products and services for better care
provision versus our competitors. These aspects of competitive
analysis gave us a clear way in which we should direct our
strategic plan based on the development of healthcare services
that our competitors currently provide.
Arkansas Children’s Hospital fully embraces the competition
analysis as an important tool for ensuring the establishment of a
sound strategic plan (Friend & Zehle, 2004). The hospital
management uses the following methods techniques to source
for crucial information about the competitors. One of the
techniques involves analyzing the recorded data of the
competitors. This data is readily available in published form
such as annual reports as well as services brochures. The other
technique involves observable data. The hospital relies on
various sources to gather the required information about the

5. competitors. Some of the source of the observable data from
competitor services pricing, advertising campaigns, and
promotions.
Arkansas Children’s Hospital focuses on obtaining competitor
information about customer satisfaction, their future investment
strategies, strategies for new services, and contractual terms
with various stakeholders and partnerships and customer
retention rate or levels (Fine, 2009).
The hospital management focuses on understanding the hospital
competitive advantages compared to the competitors. The other
benefit of analyzing the competitors is that it enables the
hospital management to understand the past, present and future
strategies of the competitors. The information is essential in
formulating the future hospital strategies that would help make
in making it more competitive advantaged. The competitor
analysis helps the hospital establish the returns obtained by the
competitors from investing into a new investment project that
the hospital has not yet implemented. The information on
returns helps the hospital to strategize on how to achieve the
best returns from new projects.
There are some economic, legal and regulatory issues that may
potentially affect the strategic plan mainly because strategic
planning involves allocating resources towards accomplishing
the long term goals and objectives (Wheelen & Hunger, 2010).
The success of the strategic plan depends largely on financial
planning. It is essential to note that without access to capital,
plans set out by ACH cannot be met. By selecting
knowledgeable management staff, they will be aware that
strategic planning requires adaptation to countless changes in
financial and operational variables. Therefore, if ACH is
experiencing financial constraints, management would have to
implement measures that cut expenses until the problems are
solved. The plans implemented will generally subject the
organization to continuous dynamic adjustments. This will
continue as long as the financial constraints continue to
increase. Additionally, the strategic plan could also be affected

6. by legal issues such as possible legal dispute with major
stakeholders based on the strategic plans in place, diversity
issues resulting from recruitment of culturally diverse
workforce. Because of their vested interest in the company,
stakeholders have a legal responsibility to make sure all issues
concerning the organization are resolved.
Legally, it is also their responsibility to ensure that all
interdepartmental conflicts are resolved because they can create
legal conflicts and most importantly, cause the strategic plan to
become ineffective. It is very important that the strategic plan
is in accordance with the legal requirements of the government,
environment or local authority.
Based on Arkansas Children Hospital’s SWOT analysis, the
organization has the ability to accomplish their mission, goals
and objectives. ACH places the health of the children in their
local community and abroad as their first mission (ACH, n.d.).
They have implemented programs that help to identify
healthcare issues before they evolve therefore placing majority
of its focus on prevention. ACH has the responsibility of
transforming the quality of healthcare delivery to children.
The organization has relevant resources that can help meet these
goals based on its strengths included in the SWOT analysis. It
provides high quality medical care to children therefore forming
the basis of their objectives. They also have a long term staff
and loyal employees that enhance professionalism in their
responsibilities. They are accountable to the rules and
regulations that guarantee the quality services they provide.
The team are also goal oriented and work towards achieving the
best. They are also trust worthy. The organization also
enhances research and innovation which is key to the improved
ways of service delivery.
Also, based on the SWOT analysis in the Excel attachment, the
goals and objectives of ACH for the next three years will entail
the following:
In the first year, ACH will aim at improving the long term
health and wellbeing of each patient and increasing their access

7. to medical care. This will be achieved by improving enrollment
in health coverage, calling for time off for the parents to take
care of their children, expanding health-based centers,
increasing clinical hours, increasing the number of providers
and also increasing the number of children who receive well-
child exams.
Research has indicated that enrolling parents in health coverage
will increase child coverage and also allow an opportunity to
get the level of coverage they require. The Affordable Care Act
has the possibility of lowering the rate of uninsured children by
even 40% as parents get more access to affordable plans (ACH
Funding, n.d.).
For the second year, the organization will also enhance or
facilitate sexual education. We will also implement programs
that will increase patient and their family’s feedback on their
experience during their visit within the hospital. Data
collected indicates that there are alarming rates of teen
pregnancy, high rates of sexually transmitted diseases and early
sexual activities in adolescents in Arkansas (ACH Funding,
n.d.). Arkansas also possesses the highest number of teen
births. Based on the new effective policies and programs to
prevent teen pregnancy, we will be able to provide education
and reduction programs and support for pregnant and parenting
teens.
This can be achieved by improving the capacity of education
and schools to offer comprehensive health education,
professional development and training that include prevention
sexually transmitted diseases within a widespread health
education curriculum. Additionally, Arkansas will expand
capacities for home visiting in order to help pregnant women
and new mothers on how to make positive choices for the health
of their families.
They are also aiming at facilitating a solid enrollment effort in
healthcare coverage under the Affordable Care Act, including
reproductive and prevention healthcare.
Enhancing programs that reduces the chances of obesity among

8. children is another goal for the third year. Inadequate physical
activities and poor nutrition will be considered by Arkansas
since they cause childhood obesity. Many people lack available
healthful food options since they contribute to the consumption
of high fat, high-calorie processed food. This will be enhanced
by expanding programs which improve the knowledge of parents
regarding healthy food choices, food preparation and shopping
via school curriculum.
Arkansas will also strengthen policies for nutrition and physical
activities in school, reducing access to sugar sweetened
beverages in the public and educate the public communities on
the impacts of these beverages on health.
Increasing the patient and family feedback that the organization
receives is important in that it allows an opportunity for the
hospital to identify areas for improvement before an extreme
issue arises. The feedback can be obtained by offering the
patient or their responsible family member a questionnaire
during the discharge phase of their visit.
In conclusion, environmental analysis played a critical role in
the strategic planning process of Arkansas Children Hospital. It
is used in identifying internal and external elements that affect
the performance of an organization. Competitive analysis also
played an essential role in strategic planning process amidst
some evolving economic, legal and regulatory issues affected
this process. Arkansas has the ability of accomplishing its
mission, goals and objectives in the previously set strategic
plans.

9. References
ACH Child & Family Services (n.d.). Retrieved April 15, 2016
from http://www.achservices.org/
Paediatric Health Care |Arkansas Children’s Hospital|Little
Rock, Arkansas (n.d.) Retrived April 15, 2016 from
http://www.arcchildrens.org/
ACH Funding|ACH Payment (n.d.) Retrieved April 15, 2016
from
Solution
s: http://www.ach-payments.com/ach-funding/
Wheelen, T. & Hunger J. (2010). Concepts in Strategic
Management & Business Policy: Achieving Sustainability (12th
Ed.). Prentice Hall: Pearson Education.
Muralidaran, S. (2007). Business environment analysis: an
introduction. India: Icfai University Press.
SWOT analysisSWOT AnalysisLocation of FactorType of
FactorFavorableUnfavorableInternalStrengthsWeaknessesHigh
quality medical careHigh level of current job stress among
hospital staff.Long term staff and loyal employeesHigh nurse
turnoverStrategic downtown locationWorkforce development is
major challengeReputed faith based
organizationExternalOpportunitiesThreatsChanges in population
profileNew competitorsStrengthen community based

10. interventionsCompetitor having innovative product or
serviceSupportive work environmentGovernment
policiesContract for major area employersCompetitors have
ability to reach patients outside of the local area
Preopening Budget ExampleUniversity of Phoenix
MaterialSample Strategic Planning SpreadsheetDiagnostic
Imaging Purchase &Hire & TrainStrategies to Increase
VolumeInstallStaffPurchase and install a new MRI.MRITrain or
hire additional staff to operate new MRI.RevenueYear 1Year
2Year 3Increase marketing to
physicians.CT$2,000,000$2,200,000$2,420,000AssumptionsMR
Is$8,000,000$8,800,000$9,680,000Increase in
revenue/year10.00%General
diagnostic$6,000,000$6,600,000$7,260,000Increase in
salaries/year4.00%Interventional$12,000,000$13,200,000$14,52
0,000Increase in supply expense/year5.00%Travel as a % of
revenue0.50%Total
revenue$28,000,000$30,800,000$33,880,000Maintenace as a %
revenue1.00%Contracts as a % of
revenue2.00%ExpensesMarketing as a % of revenue0.50%Misc
as a % of
revenue1.00%Salaries$18,200,000$20,020,000$22,022,000Salar
ies as a % of
revenue65.00%Supplies$4,200,000$4,410,000$4,630,500Travel

11. $140,000$154,000$169,400Maintenance$280,000$308,000$338,
800Contracts$560,000$616,000$677,600Marketing$140,000$15
4,000$169,400Miscellaneous$280,000$308,000$338,800Total
expenses$23,800,000$25,970,000$28,346,500Net
profit$4,200,000$4,830,000$5,533,500Capital
outlay$2,500,000$0$0