Fluent Essays

HA4110D - Healthcare Planning and Evaluation Assignment 10: Strategic Fit Outline Directions .READ Chapters 25 and 26. .REVIEW PowerPoints chapters 25 and 26. .COMPLETE Exercise in chapter 25. .Using the completed exercises throughout the course, create an outline to follow for your final project paper. There should be seven areas to address: 1.Organizational Information 2.Corporate Mission 3.Research and competitive analysis 4.Broad analysis 5-forces .PEST .Benchmark .SWOT-Generic .EFE .Financial statement McKinsey 7 or BCG 6.Generic Strategies .Ansoff .TOWs 7.Strategic Fit Results Provide a least two paragraphs for each numerical heading and subheading. Provide a reference page as your final page and a minimum of 7 references written accorsing to APA standards. All references must be complete and no URLs provided alone or the reference will be unacceptable. Strategic Analysis for Healthcare: Concepts and Practical Applications--Vitalsource [email protected]#magicMAN61Strategic Analysis for Healthcare Chapter 25 Copyright © 2016 Foundation of the American College of Healthcare Executives. Not for sale. Health Administration Press 1 Strategy Selection To begin the process of strategy selection, the analyst reviews the potential strategies identified in the Ansoff and TOWS matrices. Many strategists place each possible strategy on a separate sticky note, so the strategies can be sorted and moved around into clusters. The strategist searches for commonalities among the strategies. Most likely, about 25 strategies can be grouped under four or five main headings. The strategist identifies those main headings and places the appropriate strategies under each. The main headings become “overarching strategies,” and the specific strategies from the Ansoff and TOWS matrices become “supporting strategies” or “substrategies.” Copyright © 2016 Foundation of the American College of Healthcare Executives. Not for sale. Health Administration Press Health Administration Press Strategy Selection In a strategy consolidation from the Ansoff and TOWS matrices, “Expand into adjacent counties,” “Expand into urgent care,” “Place satellite locations,” “Open cancer center,” and “Buy out private practices” could all be grouped together. A title of “Facility Expansion” could be placed above these strategies, and that could become an overarching strategy. Likewise, many Ansoff and TOWS example strategies could be consolidated under other overarching strategies, such as “Service Expansion,” for instance. Copyright © 2016 Foundation of the American College of Healthcare Executives. Not for sale. Health Administration Press Health Administration Press Strategy Selection Pursuing every good strategy is not recommended. An organization likely will not have sufficient funds to pursue every option, and doing so would lead to a lack of focus. The strategic options need to be culled and the most promising ones retained. After the strategies have been consolidated, the analyst can evaluate the strategies at two levels. Copyright © 2016 Foundation of the American College of Healthcare Executives. Not for sale. Health Administration Press Health Administration Press Strategy Selection First, the overarching strategies can be compared against one another. For example, the facility expansion strategy would be compared with service expansion. At the second level, the substrategies under an overarching strategy can be evaluated and then either retained or discarded. In the facility expansion example, the analyst would decide whether to retain or discard “Expand into adjacent counties,” “Expand into urgent care,” “Place satellite locations,” “Open cancer center,” and “Buy out private practices.” Copyright © 2016 Foundation of the American College of Healthcare Executives. Not for sale. Health Administration Press Health Administration Press Strategic Fit Assessment and the QSPM To choose among the overarching strategiStrategic Analysis for Healthcare Chapter 26 Copyright © 2016 Foundation of the American College of Healthcare Executives. Not for sale. Health Administration Press 1 Financial Fit Assessment and Projection In strategy selection, the financial investment required to support implementation is a significant criterion, as is the amount of time needed to recoup the investment and profit potential. The QSPM model might show one proposal to be superior to the others in a strategic sense; however, the organization might not have the financial resources to successfully implement and maintain that strategy. To address concerns of this nature, the strategist must apply a financial screen to the proposed strategies. Copyright © 2016 Foundation of the American College of Healthcare Executives. Not for sale. Health Administration Press Health Administration Press Financial Fit Assessment and Projection In a survey of 1,139 executives by McKinsey & Company, 75 percent said companies that get the best results use a balanced mix of financial and strategic targets; only 11 percent disagreed. The point behind these findings is that a strategic fit is not enough. One needs both a strategic fit and a financial fit. A complete financial analysis, using factors such as depreciation, tax effect, and so on, is beyond the scope of this book. However, this chapter introduces several important financial analysis measures, including net present value, internal rate of return, profitability index, payback period, and probability of success. Copyright © 2016 Foundation of the American College of Healthcare Executives. Not for sale. Health Administration Press Health Administration Press Net Present Value The net present value (NPV) of a future stream of income recognizes that the future income is worth less in today’s dollars than a simple arithmetic sum of the same dollars would indicate. The basic idea behind this concept is that a dollar in hand today is worth more than the promise of a dollar five years from now. The promise five years from now will be eaten away by inflation, which lessens the dollar’s purchasing power. Copyright © 2016 Foundation of the American College of Healthcare Executives. Not for sale. Health Administration Press Health Administration Press Net Present Value The next slide demonstrates a calculation for net present value using Microsoft Excel. To begin, set up a chart showing the annual cost of capital or discount rate, followed by each yearly income. You can then use Excel’s “=NPV” function to calculate the net present value. Use the discount rate as “rate,” and highlight the cells with the initial cost and yearly incomes to finish the equation. In the example shown in the exhibit, the total return less the up-front investment is $4,000,000; however, the net present value is only $1,188,443 due to the time value of money. Copyright © 2016 Foundation of the American College of Healthcare Executives. Not for sal