Running head: LEARNING PLAN Learning Plan 9 Assignment: Cost, Differentiation, Focus & Strategy Johnson and Johnson Ansoff Matrix 1 LEARNING PLAN 2 Existing Market Development Production of Johnson’s baby is split Diversification High level of product diversification into three directions: Items for a diaper change, bathing items, and More than 230 subsidiary enterprises, that is, skin care products. “Johnson &Johnson Family ( BabyCenter, ALZA Corporation, ANIMAS Corporation, use of various sales channels like L.L.C., and others) direct or online sales Use the marketing mix Markets Market Penetration Product Development Increase sales; continue delivering products in different regions of Russia and the entire world. New Packaging The assortment is greater than 200titles including 230 subsidiaries in over fifty countries. J &J’s products are sold in over 175countries in all parts of the world. New Modernized products Generation of new products Increasing the efforts put in distribution and promotion processes for instance by investing more on product advertising. promotional campaigns that are more aggressive Increasing the usage of products by existing for example, by introducing customer loyalty schemes. Existing New LEARNING PLAN 3 Products and Services Johnson and Johnson Tow’s Strengths Product diversification Weaknesses Ruined reputation in some countries Product innovation Strategic acquisitions Reliance on small molecule drugs Positive revenue growth projections Dependence on launch products’ success Substantial marketing avenue Opportunities Plenty of cross-selling opportunities The company specializes in a variety of products that complement each other Potential to Exploit Biologics Market, for example, antibodies and therapeutic proteins Positive change in many people’s perception of health SO Strategies WO Strategies Continue diversifying products to capture the increased consumer demand from health a perception change Utilize the niche markets to reduce the company’s reliance on the success of launch products Utilize the diversified product line to maximize revenue through cross-selling opportunities Leverage the opportunity to open new markets to attract customer Use product innovation to exploit the biologics market Exploit the biologics market to reduce reliance on small molecule drugs Niche markets Threats ST Strategies Utilize the diversified product Johnson and Johnson's and marketing avenue to put pharmaceutical must be pressure on competitors approved before getting released to the market making WT Strategies Settle recent lawsuits to improve the company’s image and reputation LEARNING PLAN 4 it hard to get new products into the market Competition Use the substantial marketing Focus on producing high-quality avenue to build the brand’s products that meet the image. regulatory standards Different countries have different regulations Product bans can affect the brand image of the company Johnson and Johnson Ansoff Matrix Results Market Penetration The Ansoff matrix tool was highly useful in developing strategies. For, market penetration there were several strategies developed to facilitate it, focusing on increasing the Johnson and Johnson’s sales of existing products to a market that was already in existence. Some of the appropriate ways that the market penetration strategy can be achieved include reducing the prices of products in order to attract the new or existing customers and acquiring a competitor within the marketplace (Grünig & Kühn, 2018). Another strategy that can be implemented is increasing the efforts put in distribution and promotion processes for instance by investing more on product advertising. J & J’s market penetration can also be achieved through the restructuring of a mature market by eliminating competitors. This can be done by doing promotional campaigns that are more aggressive in conjunction with a pricing strategy which will be structured to make the market unattractive for the competitors. Increasing the usage of products by existing customers is also an effective strategy, and this can be done for example, by introducing customer loyalty schemes. LEARNING PLAN 5 Market Development Again, strategies that could facilitate the achievement of market development were also identified. Here the focus will be on new markets or areas in the existing market and selling larger amounts of the existing product to different people (Gurcaylilar-Yenidogan, & Aksoy, 2018). Some of the strategies that might be useful in doing this include targeting different geographical markets either locally or abroad. For example, the product can be exported to a new country. This can involve conducting a PESTEL Analysis, using the CAGE distance framework, or identifying threats and opportunities in different markets. Again, market development can be done through the use of various sales channels like direct or online sales if the selling process is conducted through intermediaries or agents. Another way of doing this is through market segmentation whereby different groups of people will be targeted based on their gender, demographic profiles, or age. The use of a marketing mix is also an effective way of achieving market development as it assists the organization to understand how it can best reposition its product. Product Development In product development, Johnson and Johnson will be selling different products to the same customer or market it is currently serving. The ways of achieving product development include extending the product for instance through the production of different variants of it or repackaging the products that exist. Also, related products or services can be developed. In the service industry, product development can also be attained by shortening the time to market or LEARNING PLAN 6 improving customer service or quality o services delivered (Grünig & Morschett, 2017). Other ways of successful product development are research, development, and innovation, and obtain detailed insights into the needs and expectations of customers as well as how they keep changing. Diversification Lastly, diversification is an important strategy which is highly risky. Here there is the least scope for the use of existing expertise or for attaining economies of scale since J &J is simply trying to sell products that are entirely different to new customers (Grünig & Kühn, 2018). Successful diversification will require the company to understand clearly and have an idea about the expected gain from the strategy. An honest and critical assessment of the risks involved is also essential. Balancing risks and rewards in the right manner also leads to successful diversification. In diversification, the following might be helpful: related diversification, unrelated diversification, upstream integration of the firm’s suppliers, and downstream integration of agents or intermediaries. LEARNING PLAN 7 References Grünig, R., & Kühn, R. (2018). Development of Strategic Planning and Its Integration Into Strategic Management. The Strategy Planning Process (pp. 17-25). Springer, Berlin, Heidelberg. Grünig, R., & Morschett, D. (2017). General Strategic Planning as the Starting Point for Going International for New Markets. In Developing International Strategies (pp. 57-65). Springer, Berlin, Heidelberg. Gurcaylilar-Yenidogan, T., & Aksoy, S. (2018). Applying Ansoff’S Growth Strategy Matrix To Innovation Classification. International Journal of Innovation Management, 22(04), 1850039. 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. Running Head: FIVE FORCES AFFECTING HEALTHCARE SECTOR Five Forces Affecting Healthcare Sector Broad Analogy 1 FIVE FORCES AFFECTING STRATEGY FORMULATION 2 Introduction The five forces analysis is an approach used to analyze the various factors that could affect the strategies formulated by a given firm and result in performances not expected by the firm. These five forces determine the competitive advantage any given firm could have if properly analyzed and reacted upon. These forces include the following; The intensity of the rivalry This force examines the degree and intensity of competition from other related firms that are currently prevailing in the market. It is generally determined by the total number of competitors in that market. The higher the number of competitors the lower the competitive rivalry. With a high rivalry in competition, there comes increased advertising and more price wars leading to adverse effects on that given business (Kunc, M. 2018). When there are two clinics or hospitals in a given region, the will be two competing firms both seeking a market in the region. This will, therefore, call for more advertising and other cost-increasing activities aimed at attracting more customers to the individual firm that carries out these activities. The implication of this will be decreased profits for the firms. This, therefore, calls for a plan to curb this force. The threat of new entrants This force examines the ease or difficulty that potential investors in the industry have in entering the market and operating as competitors of the already existing firms. The ease or difficulty in an entry is determined by factors such as the intensity of initial capital required, economies of scale, well-recognized brands, and control of various inputs required for the production process. It can be considered in two ways, either as barriers to entry or response by FIVE FORCES AFFECTING STRATEGY FORMULATION 3 the existing firms. Most hospitals in many regions have control of their inputs which are also produced in limited amounts to avoid misuse and abuse by various consumers (Walker, 2015). Hospitals also largely operate in large scale that enables them to admit services at reduced prices and this may be unfavorable for small potential investors who can’t keep up with the prevailing market prices for the services. The threat of substitute products The existence and the prices of other substitute goods also affect the strategy that an organization chooses to settle on. The existence of substitute goods in the market limit the ability of a firm to charge high prices on its goods and reduction of the prices of these substitute goods will also call for the reduction of prices of a firm’s products (Stiglitz, 2015). In the healthcare industry for instance. When the prices of substitute products of health reduce, the prices charged for the meds reduce consequently thus the hospitals need to develop an effective strategy to curb the effects by substitute goods. Bargaining power of suppliers This is the power held by the suppliers of raw materials of production, assembling of the inputs and their disposal which then affect the prices of the goods. When there is a very small base of suppliers of the various input for production, their bargaining power is high and this results to increase in the costs of the inputs. The number of physicians and surgeons who offer healthcare services affects the cost of production. If the number is small, there will be more wages paid to them due to higher bargaining power thus calling for a strategy to curb their bargaining power. FIVE FORCES AFFECTING STRATEGY FORMULATION 4 Bargaining power of the consumers There is more consumer bargaining power in situations where there are a large number of consumers with a limited number of sellers if consumer purchases large amounts of seller’s products and ease in the ability to switch seller. If there are many buyers of healthcare in a region with little healthcare facilities, consumers have more bargaining power that enables them to have more price cuts that thus reduces the hospital's profits calling for the need for a strategy to curb this force. These forces can be curbed by strategies such as diversification of products, cost leadership, differentiation, focus among many other economic ways of cutting costs and increasing returns. FIVE FORCES AFFECTING STRATEGY FORMULATION References Kunc, M. (2018). Strategic Analytics: Integrating Management Science to Strategy. Newark: John Wiley & Sons, Incorporated. Stiglitz, J. E., & Rosengard, J. K. (2015). Economics of the public sector. Walker, (2015). Marketing Strategy. 5 Health Administration Press Strategic Analysis for Healthcare Chapter 11 Copyright © 2016 Foundation of the American College of Healthcare Executives. Not for sale. Health Administration Press Financial Statement and Ratio Analysis • The analysis of an organization’s financial ratios combines an internal analysis of the firm’s finances with an external comparison of the same factors. • The financial data you choose to look at depends on the particular organization and the specific industry. • Financial ratios can be grouped into several broad categories— – – – – – – liquidity, leverage, activity, profitability, growth, and valuation. • The analyst should include at least two or three relevant ratios for each. Copyright © 2016 Foundation of the American College of Healthcare Executives. Not for sale. Health Administration Press LIQUIDITY RATIOS Ratio Current ratio Quick ratio (acid test) CFO ratio Days cash on hand Formula Current assets Current liabilities What it tells you Positive trend Ability to pay short term debts Higher Cash + Marketable Securities + Receivables Current liabilities Financial solvency when inventory is not easily liquidated Higher Cash from operations (aka operating cash flow) Current liabilities Is the firm generating enough cash to cover current operations Higher Cash + Marketable securities+ Long term investments (Operating expense-Depreciation & amortization)/365 Cash available to pay x number of days average cash outflow Higher Copyright © 2016 Foundation of the American College of Healthcare Executives. Not for sale. Comparator Peer group Historical average Rule of thumb (>2) Peer group Historical average Rule of thumb (>1) Peer group Historical average Rule of thumb (>40%) Peer group Historical average Health Administration Press LEVERAGE RATIOS Ratio Formula What it tells you Debt-to-totalassets ratio Debt-to-equity ratio Long-term debt-toequity ratio Times interest earned ratio Total liabilities Total assets Total liabilities Total equity (or net assets for non-profits) Long term liabilities Total equity (or net assets for non-profits) Earnings before interest & taxes (aka EBIT) Interest expense The percent of total assets being funded by creditors The percent of total assets being funded by firms owners The amount of long term debt a firm has compared to equity How easily a firm can pay interest due on outstanding debt Copyright © 2016 Foundation of the American College of Healthcare Executives. Not for sale. Positive trend Comparator Lower Peer group Historical average Lower Peer group Historical average Lower Peer group Historical average Higher Peer group Historical average Health Administration Press ACTIVITY RATIOS Ratio Formula What it tells you Total asset turnover ratio Fixed asset turnover Inventory turnover Total Revenue (aka sales) Total assets Total Revenue (aka sales) Fixed assets Total Revenue (aka sales) Inventory Receivables Total Revenue (aka sales)/ 365 Accumulated depreciation Depreciation expense The amount of total revenue per dollar of total assets A firms ability to effectively utilize fixed assets How long sales inventory waits to be sold How long it takes to collect monies due How old the plant & equipment is. Newer is better Average collection period Age-of-plant ratio Copyright © 2016 Foundation of the American College of Healthcare Executives. Not for sale. Positive trend Comparator Higher Peer group Historical average Higher Peer group Historical average Lower Peer group Historical average Lower Peer group Historical average Lower Peer group Historical average Health Administration Press PROFITABILITY RATIOS Ratio Formula Revenue per adjusted discharge Operating Revenue (Gross patient revenue/ gross inpatient revenue) x total discharges Total operating expense (Gross patient revenue/ gross inpatient revenue) x total discharges Salary and benefit expense Total operating expense Operating revenue generated from patient care services Higher Peer group Historical average Expense associated with patient care services Lower Peer group Historical average Employee expenses as a percent of total expenses Lower Peer group Historical average Net income (profit) Total assets Management’s ability to earn a return on each dollar of assets Higher Excess of revenues over expenses Total assets In Nonprofit organizations; Managements ability to earn a return on each dollar of assets Higher Net income (profit) Shareholders’ equity Rate of return on stockholders’ investment Higher Peer group Historical average Economic comparison (avg weighted cost of capital) Peer group Historical average Economic comparison (avg weighted cost of capital) Peer group Historical average Operating expense per adjusted discharge Salary and benefits as a % of operating expense Return on assets (ROA) Return on total assets Return on equity (ROE) What it tells you Copyright © 2016 Foundation of the American College of Healthcare Executives. Not for sale. Positive trend Comparator Health Administration Press PROFITABILITY RATIOS (cont.) Ratio Return on net assets Gross profit margin Formula Excess of revenues over expenses Net assets Net sales- cost of goods sold Net sales Net profit margin Net income (profit) Sales revenue Operating margin Earnings before interest and taxes (ie, from operations) Net sales Cash flow margin Income before depreciation, interest, taxes Return on capital employed Earnings Before Interest and Tax (EBIT) Total assets – current liabilities What it tells you Positive trend Comparator In Nonprofit organizations; rate of return in net assets Higher Peer group Historical average Gross profit margin Higher Peer group Historical average The amount of net profit as a percent of sales Higher Peer group Historical average Operating profit margin Higher Peer group Historical average Income including non-operation sources Higher Peer group Historical average The efficiency with which its capital is employed Higher Peer group Historical average Copyright © 2016 Foundation of the American College of Healthcare Executives. Not for sale. Health Administration Press GROWTH RATIOS Ratio Revenue increase Earnings per share (EPS) * Dividends payout ratio * Formula This year’s revenue Last year’s revenue Net income-preferred stock dividends Average outstanding shares Dividends per common share of stock Earnings per share What it tells you Percent increase in revenue year over year The amount of profit per share of stock The portion of a company's profit paid relative to each common share of stock * For public companies Copyright © 2016 Foundation of the American College of Healthcare Executives. Not for sale. Positive trend Comparator Higher Peer group Historical average Higher Peer group Historical average Varies Peer group Historical average Health Administration Press VALUATION RATIOS (for publicly traded companies) Ratio P/E Ratio Dividend yield Dividend payout Cash flow per share Price-to-book ratio PEG ratio Return on net worth Formula What it tells you Price per share Earnings per share Dividends per share Price per share Annual dividends per share After tax earnings per share After tax profits + Depreciation Number of common shares outstanding Price per share Total assets-(intangible assets & liabilities) P/E ratio Annual earnings per share growth How much investors are willing to pay per dollar of earnings. Dividend payout as a percent of stock price Dividend payout as a percent of profit Amount of cash per share of stock Higher Peer group Historical average Varies Peer group Historical average Varies Peer group Historical average Higher Peer group Historical average Compares a firm's market value to its book value A stock's value while taking the company's earnings growth into consideration Profit as related to the firm's net worth Higher Peer group Historical average Higher Peer group Historical average Higher Peer group Historical average Net Income Net worth Copyright © 2016 Foundation of the American College of Healthcare Executives. Not for sale. Positive trend Comparator Health Administration Press Financial Ratio Analysis • The internal financial ratio analysis is concerned with both the current state of the organization and the trend. • Knowing that the organization is at “point X” is important to the strategist; even more important, however, is observing a trend and predicting where that trend will lead without intervention. • To carry out this kind of observation, the analyst needs to assemble three to five consecutive years of data. • The relevant ratios can be selected from the list in the previous slides or from Exhibit 11.1 in your book. • Once the data has been recorded and reviewed, the analyst should create a list of implications for strategy. Copyright © 2016 Foundation of the American College of Healthcare Executives. Not for sale. Health Administration Press Financial Ratio Analysis • Simply looking at the organization’s financial ratios, however, does not tell an analyst all there is to know. • The data needs to be compared to some reference point. • Though standards exist for every financial ratio, in competitive analysis and strategy development, the relevant comparison is to the firm’s competitors, then to the industry within which the firm competes. • This is because each industry has its own norms. • As an example, it may be self-evident to an analyst that a firm has an extremely high debt-to-equity ratio simply by looking at the numbers. • On the other hand, in addition to knowing that, the strategist would also like to know how highly leveraged the firm’s competitors are and what the norm is for the particular industry. Copyright © 2016 Foundation of the American College of Healthcare Executives. Not for sale. Health Administration Press Financial Ratio Analysis • An even more powerful tool is looking at competitors using five years of financial data. • This allows the analyst to identify trends for the competitors. • The strategist would like to identify deteriorating or improving competitor conditions. • Emerging competitor weaknesses can be exploited, and emerging competitor strengths need to be defended against. • Improving or degrading competitor trends can also be a warning sign for a firm’s own vulnerability. Copyright © 2016 Foundation of the American College of Healthcare Executives. Not for sale. Health Administration Press Exercise • Divide into groups. • Select which ratios are most relevant for the organization you are studying and explain why. • If time permits, research the numbers for your firm and its competitors. • Use the space provided on page 79 of your book. • What implications for strategy emerge? Copyright © 2016 Foundation of the American College of Healthcare Executives. Not for sale. 1 Running head: STRATEGIC FIT OUTLINE Strategic Fit Outline (Outline of previous assignments for this course) 2 STRATEGIC FIT OUTLINE Organization information GlaxoSmithKline is an international pharmaceutical giant, is the organization under analysis. It provides a wide variety of products and services, which include; oral healthcare (through the production of toothpaste), treatment of diseases (through the manufacture of medicines), nutritional care (through the manufacture of food supplements and vitamins) (Uribe, García-Galbis, & Espinosa, 2017). The company has a primary listing on the London Stock Exchange and is a constituent of the FTSE 100 Index. As of August 2016, it had a market capitalization of £81 billion (around $107 billion), the fourth largest on the London Stock Exchange. It has a secondary listing on the New York Stock Exchange ("effect of market volatility and firm size towards the difference of market reaction around stock-split announcement in Indonesia stock exchange," 2016). Corporate Mission Christina care Health care system is a non- profit health care organization committed to healthcare service delivery to communities through; Leadership and excellence in the delivery of quality healthcare services at affordable rates, Expanding the heights of biomedical knowledge through research, Improving healthcare status in the community through awareness of diseases and ways of disease prevention and Enhancing access to medical care through the expansion of medical access to underserved citizens (Nair & Chen, 2018). Quality patient care is the company focus. Providing excellent and quality medical service, support information in the health sector through research and proper medical education are an essential aspect of our mission. The mission was founded on ethical and cultural perspectives of the Declaration of the independence which inspires happiness to all American citizens. Research and competitive analysis The five forces analysis is an approach used to analyze the various factors that could affect the strategies formulated by a given firm and result in performances not expected by the firm. These five forces determine the competitive advantage any given firm could have if properly analyzed and reacted upon (Omsa, Abdullah, & Jamali, 2017). These actors are the intensity of the rivalry, the threat of new entrants, the risk of substitute products, bargaining power of suppliers, the bargaining power of the consumers. These factors affect the revenue collected amount by the respective company. Broad analysis 5-forces The five forces analysis is an approach used to analyze the various factors that could affect the strategies formulated by a given firm and result in performances not expected by the firm. These five forces determine the competitive advantage any given firm could have if properly 3 STRATEGIC FIT OUTLINE analyzed and reacted upon. These forces include the following; the intensity of the rivalry, the threat of new entrants, the risk of substitute products, bargaining power of suppliers, bargaining power of the consumers (Dulčić, Gnjidić, & Alfirević, 2016). These forces can be curbed by strategies such as diversification of products, cost leadership, differentiation, focus among many other economic ways of cutting costs and increasing returns. PEST PEST is the abbreviation of the factors that affect the company which is: political factors, economic factors, social and technological factors. These are the factors that affect the company both internally and externally enabling it to accomplish its goals or diminish the strategies. These factors are vital and are profoundly addressed by the firm (Herlambang, Sugiharto, & Rohmana, 2017). The company has to focus on the latest delivery techniques and other technical advances in their field. A sophisticated professional system would mean better production and distribution of the products, and thus a broader population can benefit from the products. Benchmark Benchmark analysis encompasses the PEST analysis factors: political factors, economic factors, social and technological factors. These are the factors that affect the company both internally and externally enabling it to accomplish its goals or diminish the strategies. These factors are vital and are profoundly addressed by the firm (Akbar, 2018). These factors are explained with the division of their control strategy. When these factors are considered seriously the company succeeds, the act like production functions that affect the output of the company. SWOT-Generic & EFE In SWOT and EFE analysis we examine the Johnson and Johnson Company. Johnson and Johnson is a profit organization that specializes in the production of medical equipment, consumer and pharmaceutical products. The company has been in operation for 132 years. It operates in sixty countries although its products get sold in 170 countries in total. The company’s products cater to the needs of both men and women and babies too. For example, the company produces a baby powder that is mostly used by babies; even newborn babies (Stawski, 2013). The company’s main aim is to make it easy for individuals to access healthcare products by making them affordable and reachable. It also focuses on creating healthy communities by providing products that help individuals to stay healthy. This part focuses on analyzing the external factors that have an impact on the company. External factors include the opportunities that the company can exploit, and the threats include the entities that threaten the well-being of the company. Financial statement McKinsey 7 or BCG 4 STRATEGIC FIT OUTLINE A BCG matrix is a technique which is built on the idea that products can be categorized based on their share and performance in the market. In order to understand the concept of BCG, it is essential to understand the various key factors and principles that it is built on and these are market share and the market growth rate ("BCG Growth-Share Matrix," 2017). This paper will aim to develop a focused analysis that determines the BCG Matrix within the healthcare industry. In the BCG matrix, the healthcare sector's growth rate is monitored, depending on how it is laid out, an organization's role and engagement will be recognized by its scope. Through this, it, therefore, becomes possible to know and measure the market share the same organization enjoys as it will be a correspondence of the growth rate of the same. Generic Strategies Ansoff and TOWs 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 (Hogue, 2015). Likewise, many Ansoff and TOWS example strategies could be consolidated under other overarching strategies, such as “Service Expansion,” for instance. 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 sub-strategies under an overarching strategy can be evaluated and then either retained or discarded. In the facility expansion example, the analyst would decide whether to maintain or reject “Expand into adjacent counties,” “Expand into urgent care,” “Place satellite locations,” “Open cancer center,” and “Buy out private practices.” Strategic Fit Results 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 ("Monetary Policy," 2017). 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 economic analysis, using factors such as depreciation, tax effect, and so on, is beyond the scope of this book ("Dynamic Strategic Fit in Organization Design in Shariah Banks in Indonesian," 2017). However, this chapter introduces several important financial analysis measures, including net present value, internal rate of return, profitability index, payback period, and the probability of success. 5 STRATEGIC FIT OUTLINE References BCG Growth-Share Matrix. (2017). Encyclopedia of Management Theory. doi:10.4135/9781452276090.n28 Dynamic Strategic Fit in Organization Design in Shariah Banks in Indonesian. (2017). Account and Financial Management Journal. doi:10.18535/afmj/v2i12.04 Monetary Policy. (2017). Applied Financial Macroeconomics and Investment Strategy. doi:10.1057/9781137401809.0007 The effect of market volatility and firm size towards the difference of market reaction around the stock-split announcement in Indonesia stock exchange. (2016). Journal of Administrative and Business Studies, 2(6). doi:10.20474/jabs-2.6.5 Akbar, T. (2018). DETERMINATION OF SHARIA STOCK PRICE THROUGH ANALYSIS OF FUNDAMENTAL FACTORS AND MACROECONOMIC FACTORS. Account and Financial Management Journal, 03(10). doi:10.31142/afmj/v3i10.01 Dulčić, Ž., Gnjidić, V., & Alfirević, N. (2016). From Five Competitive Forces to Five Collaborative Forces: Revised View on Industry Structure-firm Interrelationship. Procedia - Social and Behavioral Sciences, 58, 1077-1084. doi:10.1016/j.sbspro.2012.09.1088 Herlambang, A., Sugiharto, M. D., & Rohmana, Y. (2017). Factors which Will Affect The Labor Productivity of Industrial Convection. Proceedings of the 2nd International Conference on Economic Education and Entrepreneurship. doi:10.5220/0006881301010104 Hogue, C. (2015). Switch To Safer Chemicals Could Expand Employment. Chemical & Engineering News, 050311092222. doi:10.1021/cen051211124722 Nair, S., & Chen, J. (2018). Improving Quality of Care in Federally Qualified Health Centers Through Ambulatory Care Accreditation. Journal for Healthcare Quality, 40(5), 301309. doi:10.1097/jhq.0000000000000105 Omsa, S., Abdullah, I. H., & Jamali, H. (2017). Five Competitive Forces Model and the Implementation of Porter’s Generic Strategies to Gain Firm Performances. doi:10.31227/osf.io/9hbwt Stawski, B. (2013). Risk Management in Creating Value Based on the Example of the Company from the Sector of Production of Basic Pharmaceutical Products and Medicines and Other Pharmaceutical Products. SSRN Electronic Journal. doi:10.2139/ssrn.2246422 Uribe, N. G., García-Galbis, M. R., & Espinosa, R. M. (2017). New Advances about the Effect of Vitamins on Human Health: Vitamins Supplements and Nutritional Aspects. Functional Food - Improve Health through Adequate Food. doi:10.5772/intechopen.69122 
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