Health Administration Press Strategic Analysis for Healthcare Chapter 25 Copyright © 2016 Foundation of the American College of Healthcare Executives. Not for sale. Health Administration Press 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 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 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 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 Strategic Fit Assessment and the QSPM • To choose among the overarching strategies, the strategist constructs a quantitative strategic planning matrix (QSPM). • This matrix assesses each overarching strategy based on how attractive it is relative to the external factor evaluation (EFE) and internal factor evaluation (IFE) factors (see Chapters 10 and 18). • This assessment produces an attractiveness score (AS) and a total attractiveness score (TAS) for each strategy. • The strategy with the highest total attractiveness score is the strategy considered most appropriate for implementation. Copyright © 2016 Foundation of the American College of Healthcare Executives. Not for sale. Health Administration Press QSPM • To create the QSPM, place the external opportunities and threats from the EFE analysis and the internal strengths and weaknesses from the IFE analysis into the left column of the matrix. • Make sure you list at least ten external factors and ten internal factors. Include the weight from the IFE and EFE with each item. Copyright © 2016 Foundation of the American College of Healthcare Executives. Not for sale. Health Administration Press QSPM • The attractiveness score in the QSPM indicates whether each IFE/EFE factor is important to, has a significant impact on, or produces an “attractive” match with each strategy. • The scores are determined by analyzing each IFE/EFE factor and considering whether the factor makes a difference in the decision of which strategy to pursue. • If the factor does not make a difference, the attractiveness score is zero. • If the factor does make a difference, the strategy is rated relative to that factor. Copyright © 2016 Foundation of the American College of Healthcare Executives. Not for sale. Health Administration Press QSPM • The rating scale, from 0 to 4, is as follows: 1 = not attractive 2 = somewhat attractive 3 = reasonably attractive 4 = highly attractive 0 = not applicable • The strategist assigns the attractiveness score based upon everything known about the organization and its competitive environment. Copyright © 2016 Foundation of the American College of Healthcare Executives. Not for sale. Health Administration Press QSPM • As an example on the next slide, the overarching strategy of facility expansion is compared to service expansion. • The weight multiplied by the attractiveness score assigned by the strategist yields the total attractiveness score. Copyright © 2016 Foundation of the American College of Healthcare Executives. Not for sale. Health Administration Press QSPM Opportunities 1 Expansion of Existing Services 2 Additional Locations 3 Greater Exposure and Branding 4 Addition of Trauma Center Weight 0.050 0.100 0.050 0.025 Total Attractiveness Score Attractiveness Score Service Expansion Total Attractiveness Score Opportunities Attractiveness Score Weight Facility Expansion 3 0.150 4 0.200 4 0.400 4 0.400 4 0.200 3 0.150 4 0.100 4 0.100 Copyright © 2016 Foundation of the American College of Healthcare Executives. Not for sale. Health Administration Press QSPM • The entire IFE and EFE, containing all of the strengths, weaknesses, opportunities, and threats and their corresponding weights, is used. • Each item is issued an attractiveness score. • The attractiveness score is multiplied by the weight to arrive at a total attractiveness score. • The entire total attractiveness score column is summed for each strategy individually. • The strategy with the highest TAS is the strategy that is quantitatively most attractive and thus selected. Copyright © 2016 Foundation of the American College of Healthcare Executives. Not for sale. Health Administration Press Assessing the Supporting Strategies • The supporting strategies within the overarching strategy can be assessed next. • Not all the supporting strategies will be appropriate, and some may be mutually exclusive. • Many strategists run a QSPM again on the supporting strategies and retain those with the highest scores. • Other analysts use research and intuition to determine which ones stay and which go. • The cost of implementing one supporting strategy might affect how many other strategies the company can afford to take on. • At the same time, multiple supporting strategies might be necessary for successful completion of the overarching strategy. Copyright © 2016 Foundation of the American College of Healthcare Executives. Not for sale. Health Administration Press Consistency Check • Once strategies have been selected, they should be checked for consistency with the directional matrices discussed in previous chapters. • If the grand strategy matrix, SPACE matrix, and internal–external (I/E) matrix suggest a conservative strategy and the strategist has chosen an aggressive overarching strategy with aggressive supporting strategies, then something is wrong. • The inputs and decision making may need to be reconsidered. Copyright © 2016 Foundation of the American College of Healthcare Executives. Not for sale. Running head: JOHNSON AND JOHNSON COMPANY Choose An Organization Johnson and Johnson Company JOHNSON AND JOHNSON COMPANY. 2 Johnson and Johnson Company Johnson and Johnson is an American intercontinental company which deals with the manufacture of medical equipment, pharmaceutical and packaged goods for consumers. The company was founded 132 years ago that is in January 1886. The company is operational in sixty countries around the globe, but its headquarters is in one Johnson and Johnson Plaza, New Jersey, Brunswick. Their products are sold in over 170 countries worldwide and just like other companies Johnson has its website which is www.jnj.com The company specializes in the production of consumers packaged and pharmaceutical goods and medical equipment such as surgical materials. These products are such as Johnson and Johnson is a profit organization. However, they have funded several nonprofit organization to enable them to achieve their aim of reaching people with health needs widely (Johnson & Zinkhan, 2015). With Johnson's numerous outlets, they have managed to employ over 134,000 workers in their organizations. Why Johnson and Johnson? Johnson and Johnson is a company that offers a pure filed for a student in career or studies. The company presents students with career opportunities to impact the real world. The students are offered co-operative programs, internships and even full absorption where they get to experience continuous support from the company firsthand. Also, there is a connection with important job assignments through the team and leaders interactions across the company (Chattu, 2015). Also, through the experience and various opportunities offered, the students can express their interests and potential. With the global recognition and wide range of products, an individual is provided the chance to gain knowledge in different fields. With a company like JOHNSON AND JOHNSON COMPANY. Johnson that has managed to keep its profit for years despite running in over sixty countries, a young entrepreneur can learn essential and underlying measures of running and growing a company. 3 JOHNSON AND JOHNSON COMPANY. 4 References Johnson, M., & Zinkhan, G. M. (2015). Defining and measuring company image. In Proceedings of the 1990 Academy of Marketing Science (AMS) Annual Conference(pp. 346-350). Springer, Cham. Chattu, V. K. (2015). Corporate social responsibility in public health: A case-study on HIV/AIDS epidemic by Johnson & Johnson company in Africa. Journal of natural science, biology, and medicine, 6(1), 219. 
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