C432 Ch 7 The External Environment and Strategy Notes.docx

Industry driving forces driving forces are the major

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Industry-Driving Forces Driving forces are the major factors causing change in an industry. By identifying driving forces, organizations can develop strategy to prepare for their possible effects. The following forces are some of the most common in healthcare : Changes in consumer demand: Consumers are expected to become much more involved in decision making about the healthcare they receive. Demand is also anticipated to increase as populations age and more chronic diseases prevail. Technological changes: The use of the Internet and information technology is changing the way people interact, share information, and create business processes. Workforce availability: Shortages of healthcare personnel in nursing, ancillary services, and certain physician specialties are predicted to worsen. Shortages have become a global problem. Political changes: New state and national laws on healthcare access and reimbursement requirements have been and may be passed. Pest Analysis One analytical method for deriving driving forces is PEST ( p olitical, e conomic, s ocial/cultural, and t echnological) analysis . Political factors : include laws, regulations, and governmental policies that support or hinder an organization's plans. Economic factors : include macro-level data, such as national purchasing power, wealth distribution, workforce availability, financial growth, and inflation. 6
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Social/cultural factors : include population demographics, attitudes, and lifestyles, among others. Technological factors: encompass research and development, innovation potential, the rate at which technology is advancing, and the breadth of consumer use of emerging and existing technologies. Force Field Analysis Force field analysis elaborates on PEST analysis by determining whether the identified forces support or undermine an organization's plans. Forces that promote achievement of the organization's goals should be leveraged, while those that hinder it should be mitigated. Force field analysis has long been used to analyze problems and develop effective action plans that are multi-dimensionally focused on key driving forces. It graphically displays the forces that encourage and those that hinder the action or goal under consideration. Force Field Analysis 7
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Driving forces can be identified through brainstorming, surveys, and the input of key stakeholders. Questions such as the following can be used to facilitate discussion: What factors account for our present situation? What factors are keeping us from accomplishing our goals? What factors are helping us achieve our goals? Scenario Analysis Scenarios are stories that describe the effect environmental changes could have on an organization if those changes came to pass. Scenario analysis sensitizes leaders to different possible environments in ways that traditional graphs and written plans do not.
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