Marketing Strategy

Definition

“Strategy refers to the generalized approach to be

taken in meeting the challenges of the market”
• Strategies set the tone for marketing activities (tactics) and in
effect establish the parameters within which the marketer
must operate
• The strategy chosen will influence the nature of the marketing
plan that is ultimately developed and will guide any
subsequent marketing initiatives
• The absence of an articulated strategy, however, does not
mean that no strategy exists.
• Acts of commission or omission ultimately serve to create a
strategy, and the lack of a formal strategy could actually be
considered a strategic approach in a technical sense
Characteristics of Strategy
• Provide direction for the organization or program - The
strategy should constitute the “how to” aspect of
organizational development

• Focus the effort on one of many possible options - Because

there will always be numerous strategic options from which to
choose, focusing on a particular strategy prevents confusion of
purpose and diffusion of effort

• Unify the organization’s actions - The chosen strategy should

provide the purpose and direction for the organization
necessary to get everyone on the same page and unify the
actions of organization members
• Differentiate the organization - The strategy chosen should
serve to solidify the organization’s identity and distinguish it
from competitors

• Customize the organization’s promotions -The strategy should

provide guidance in the development of promotional material,
with all materials presenting an image that is both distinct and
consistent

• Marshall the organization’s resources - The strategy should

provide guidance in the allocation of resources, allowing the
focusing of resources on one approach rather than many.
• Support decision making within the organization - The strategy
should provide a basis for making decisions, implicitly
establishing criteria that can be used to frame issues that
require a decision.

• Provide a competitive edge for the organization - Ultimately,

strategy development is about positioning the organization
vis-à-vis the market. The approach should capitalize on the
organization’s strategic assets and provide an advantage over
competitors.
Definition

“Strategic Planning is a process of defining and

managing actions that will shape an organization; the
development of organizational objectives and
measurement of ongoing performance
Steps of Strategic Planning
1. Gathering Stakeholder Inputs

2. Analysis of the internal environment

• Mission, Vision, Values, Culture

• Performance analysis

• Capability assessment

3. Analysis of the external environment

• Competitor’s Analysis - Porter’s five forces

• PESTEL Analysis
Steps of Strategic Planning
4. SWOT analysis

5. Setting priorities based on Organization objectives

6. Define Strategic initiatives

7. Deployment
1. Gathering Stakeholder Inputs
• Stakeholders
• Employees
• Patients
• Regulatory Bodies
• Accreditation agencies
2. INTERNAL ENVIRONMENT
ASSESSMENT
Mission, Vision and Values
• Org mission refers to the organization fundamental purpose of
existing, who the organization is, its values and the customers it
wishes to serve
• Foundation on which the strategy is built
• Set the tone for the organization and provide broad set of directions
for how it should develop further business strategies
• a leader cannot plan if there is no future state to which he or she
aspires
• A clear link and consistency between the vision, values, and mission
enhance the strategic planning process and increase the likelihood
that the organization’s performance will improve
Examples
• Apollo Hospital’s Mission

“Our mission is to bring healthcare of International standards within

the reach of every individual. We are committed to the achievement
and maintenance of excellence in education, research and healthcare
for the benefit of humanity”.

• Mission of American Hospital Dubai

“The American Hospital Dubai is a private healthcare facility whose

mission is to provide high quality, cost effective, American standard
healthcare which will meet the needs and expectations of Dubai,
United Arab Emirates, and the surrounding Gulf States through
comprehensive primary, secondary and selected tertiary care services
on an inpatient, outpatient and referral basis”
Performance Analysis
• KPIs
• Clinical
• Non Clinical
• Process
• Patient
• Financial
• Balanced Score card
Capability Assessment
• Self assessment
• A series of statements that test the strategic capability in your
organization
• Governance
• Financial viability and sustainability
• Adaptive Leadership
• Operational Management
• Workforce Development
• Outcomes Focus
• Organizational Technology
• Organizational Responsiveness
ANALYSIS OF THE EXTERNAL
ENVIRONMENT
Competitor Analysis - Porter’s
Five Forces
• This tool was created by Harvard Business School professor
Michael Porter, to analyze an industry's attractiveness and
likely profitability

• Five forces is a framework for understanding the competitive

forces at work in an industry, and which drive the way
economic value is divided among industry actors

• Porter recognized that organizations likely keep a close watch

on their rivals, but he encouraged them to look beyond the
actions of their competitors and examine what other factors
could impact the business environment
Porter’s Five Forces
• Competitive Rivalry
• Looks at the number and strength of your competitors
• How many rivals do you have?
• Who are they, and how does the quality of their products and
services compare with yours?
• Cost of competing and on the bases around which competition will
occur
• To what degree is the competition cost – based?
• Competition is intense – when product is standardized and competitors
are relative numerous and similar in size – scenario in healthcare
industry
• Competition can be intense – cost of switching the providers is relatively
low
• For employers, cost of switching insurance plans / health plans is not an
obstacle
• Competition can be intense when there is over capacity and firms
still in market because of high fixed-asset position – happens often
in inpatient care in healthcare

• Where rivalry is intense, companies can attract customers with

aggressive price cuts and high-impact marketing campaigns

• In markets with lots of rivals, your suppliers and buyers can go

elsewhere if they feel that they're not getting a good deal from you

• On the other hand, where competitive rivalry is minimal, and no one

else is doing what you do, then you'll likely have tremendous
strength and healthy profits
• Bargaining power of suppliers
• determined by how easy it is for your suppliers to increase their
prices?
• How many potential suppliers do you have?
• How unique is the product or service that they provide?
• how expensive would it be to switch from one supplier to
another?
• The more you have to choose from, the easier it will be to switch to
a cheaper alternative
• When fewer suppliers are there, more you need their help, the
stronger their position and their ability to charge you more. That can
impact organization profits
• Bargaining power of Buyers
• how easy it is for buyers to drive your prices down?
• How many buyers are there, and how big are their orders?
• How much would it cost them to switch from your products and
services to those of a rival?
• Are your buyers strong enough to dictate terms to you?

• When you deal with only a few savvy customers, they have more
power

• Your power increases if you have many customers

• Threat of Substitution –
• refers to the likelihood of your customers finding a different way
of doing what you do
• For example, if you supply a unique software product that
automates an important process, people may substitute it by
doing the process manually or by outsourcing it.
• A substitution that is easy and cheap to make can weaken your
position and threaten your profitability
• In healthcare, the threat of substitution most often occurs due to
technological change.
• Technological change can eliminate a particular business line in a
short period of time.
• The new technology moves the existing technology into its
mature phase of lifecycle of a product
• Threat of New Entry
• Organization position can be affected by people's ability to enter your
market – Barrier’s to entry
• Barrier’s to entry – conditions that company must over come to pursue a
business opportunity
• These could be regulatory, technological, financial or strategic
• In Healthcare, regulatory requirements are a major barrier
• Sub acute care – low barriers for entry from regulators
• Image of a existing hospital for a service could be a barrier
• Barriers to exit – infrastructure and capital investment
• If it takes little money and effort to enter your market and compete
effectively, or if you have little protection for your key technologies, then
rivals can quickly enter your market and weaken your position
• If the barriers to entry are strong, then you can preserve a favorable
position and take fair advantage of it
ENVIRONMENTAL SCANNING
• Environmental scanning is the acquisition and use of
information about events, trends and relationships in an
organization’s external environment – assists in planning the
org future course of actions

• Also referred to as PESTEL ANALYSIS

• Six major factors which influence or affect the market

• Economic Factors
• Inflation – decrease in buying power
• Cost of borrowing increases
• Opportunity to offer new services – constrained by higher
costs of capital
• Consumer income
• Gross income – total amount of money earned by a
person/ family
• Disposable income – money left for food, clothing &
shelter after paying taxes
• Discretionary income – income left after paying taxes and
necessities; used for entertainment, recreation or luxuries
• Technological Factors
• As new technology enters the market, existing services
and products are pushed out
• Impact of Technology is 3 fold
• Quality – better services, decrease in mortality
• Cost – High or low; previous technology cheaper;
• Behavior – searching online for health information
• Transparency – sharing & transparency of
information - shopping
• Regulatory Environment
• Local regulations
• Insurance regulations – Ex:Thiqa
• Data submission
• Capacity planning
• Data base of performance information
• Social Factors
• Demographics –
• population, baby boomers (1946 & 1964) – aging, Family
• Geographic shifts – people on move (ex: Urban)
• Racial and Ethnic distinctions – Service line implications and
communication strategies
 • Culture
• Role of men and women (Ex: working women)
• Changing providers – more woman than men
• Changing attitudes – health & fitness, diet etc
• Political:
• these factors determine the extent to which a government
may influence the economy or a certain industry.
• new tax or duty due to which entire revenue generating
structures of organizations might change.
• Political factors include tax policies, Fiscal policy, trade tariffs
etc. that a government may levy around the fiscal year and it
may affect the business environment (economic
environment) to a great extent.
• Environmental:
• these factors include all those that influence or are determined
by the surrounding environment
• Ex: Tourism, farming, agriculture etc.
• Factors of a business environmental analysis include but are not
limited to climate, weather, geographical location, global changes
in climate, environmental offsets etc.
SWOT Analysis
• For SWOT to be successful, we should be willing to do the
following
• Turn the focus of SWOT from products to business
processes that meet customer needs
• Capitalize on its strengths to provide better value to
customers than competition
• Turn any weakness into strength by strategically in key
areas

• Strengths and weaknesses are often internal to the

organization
• Opportunities and threats relate to external factors
• Strengths: business attributes that will help you achieve
your objectives
• What do you do well?
• What are your unique skills?
• What expert or specialized knowledge do you have?
• What experience do you have?
• What do you do better than your competitors?
• Where are you most profitable in your business?
• Weakness: business attributes that will hurt your
progress in achieving your objectives
• In what areas do you need to improve?
• What resources do you lack?
• What parts of your business are not very profitable?
• Where do you need further education and / or
experience?
• What costs you time and/or money?
• Opportunities: external conditions that will help you achieve
your objective.
• What are the business goals you are currently working
towards?
• How can you do more for your existing customers or
clients?
• How can you use technology to enhance your business?
• Are there new target audiences you have the potential to
reach?
• Are there related products and services that provide an
opportunity for your business?
• Threats: external conditions that could damage your
business's performance.
• What obstacles do you face?
• What are the strengths of your biggest competitors?
• What are your competitors doing that you're not?
• What's going on in the economy?
• What's going on in the industry?
Marketing Plan
• Developed after strategic plan is developed

• Involves the following steps

1. Establishment of marketing objectives

2. Formulation of marketing strategies

3. Development of an action plan

1. Establishment of Marketing Objectives
• Quantitative measures of accomplishment by which the
success of marketing strategies can be measures
• Might include
• Retention
• New sales growth
• Market leadership in the form of share gain
• Improving brand awareness
2. Marketing Strategy Formulation -
• Involves
• Determining target market
• Specifying the market strategy
• Developing tactical plans for the 4 P’s
Determining Target market

• Specify whom the organization is trying to attract

• Selection of the target market involves

• Assessing the organization’s own strengths

• Competitive intensity for the target market

• Cost of capturing the market share

• Potential financial gain in attracting the targeted group

• In selection of target market, market can be treated as
• One homogenous group of customers
• Referred as Mass marketing
• Customers are relatively undifferentiated – in their
needs / desires
• Tries to satisfy greatest number of buyers with a single
product
• Most hospitals follow Mass Marketing strategy
• Advantage – Largest number of people can be targeted
• Disadvantage – susceptible to new competitors – may
apply strategy addressing the needs of sub-groups
• Consider market as different segments
• Referred as Multi-segment marketing
• Distinct marketing strategy for different sub groups
• Ex: 2 segments within a female group – Child bearing
age / Elderly women
• Ex: Multispecialty hospital and a specialized hospital
for higher income or specialized insurance etc
• Same product but different promotion strategies
•
• Pursue only a subset of market segments or one market
segment
• Referred as Market Concentration Strategy
• Must be able to defend its choice in the face of
competition
• Ex: Boutique hospitals / medical centers for additional
out of pocket payment
• Future based to solidify market share position within the
group
Specifying the Market Strategy

• Must decide which one of the several market position it will

take
• Market Leader
• Market Challenger
• Market Follower
• Market Niche
• Market Leader
• Within the single industry, only one organization
• Has the largest market share
• Dominates the competitors in a given market
• Dictates the pricing strategies of its competitors
• First to introduce new products
• Defends its position against all new entries
• Seeks to expand market or current market share
• Higher market share leads to higher profitability
• can be surpassed by other brands that enter the market later and
steal the market leader position
• Market Challenger
• Attempts to confront market leader
• Tend to be smaller in size than the market leaders
• Aggressive in strategy formulation
• Either vying for leader’s customers or attract customers or market
segments where market leader is weak
• May apply approaches such as
• Price cutting
• Less costly product alternatives
• Improved distribution strategy
• Novel promotion approach
• Market Follower
• Competes in the market place by following the market leader
rather than attack it directly
• Tries to maintain existing customers and attract new customers
• Little differentiation and high price sensitivity – follower approach
is useful
• Prevents aggressive competition
• Attracts new customers – quality service at good value
• Market Niche
• Targets a narrow segment or segments in large markets
• Specialized products or services
• Common approach for many small successful companies
• Niche strategies becoming more common in healthcare
• Ex: Specialty hospitals – Surgical DRGs or Medical DRGs
3. Development of an action plan
• A tactical plan developed after identifying target market and
market position
• Addresses all 4 Ps – Product, Price, Place & Promotion
• Actions for each P
References
• http://pestleanalysis.com/pestle-analysis-of-uae/

• http://smallbusiness.chron.com/apply-segmentation-
targeting-positioning-approach-marketing-78573.html