Health Maintenance Organization Strategic Planning

INTRODUCTION

Strategic Planning is a management instrument which helps organization to focus its energy, to make sure that members of the organization are working toward the same goals, to review, evaluate and adjust the organization's direction in response to a changing environment. In short, strategic planning is a premeditated effort to produce basic decisions and actions that shape and guide what an organization is, what it does, and why it does it, with a focus on the future.

Understanding what an organization wants to do, how to do it and how well to excel in it is the fundamentals of strategic planning. It helps organizations to direct and make decision effectively in allocating its recourses to pursue a strategic plan.

The Hygeia HMO is the case study upon which the strategy planning of this work would be based.

Hygeia HMO

The organization is a Health Maintenance Organization (HMO) which has delivered first-class health insurance since 1986 across Nigeria. The organization manages care schemes and provides an outstanding level of healthcare and also offers various wide-ranging levels of healthcare offering option and meeting the ever-changing and complex needs of their client-base.

Since the organization doesn't exist in a vacuum, there a number of external factors which affects its strategy planning. These external factors will be discussed using the PESTEL framework of macro environment. This framework would help understand the political, economic, socio-cultural, technological, environment and legal factors affecting the organization.

Political:

 Disorderly regulated regimes left behind by corrupt previous government

 Government intervention in the industry

 The flexibility nature of the Nigerian Health care system

Economic - Variables like interest rate, exchange rate and the growth of the nation. This has impacts on the purchase of health facilities from other countries.

Socio-cultural - The perception of the Nigerian citizens on the nature of health insurance and their beliefs on staying without drugs

Technological - Technological advancement of the health care facilities system. The introduction of new researches into the health care system are all also an external factor of importance to the company

Environmental Factors - The temperature rate, climatic changes and the nations weather situation.

Legal - Health care system law, environmental law, insurance scheme law all affects the strategy plans of the organization.

The stakeholders to the company and their needs are

 Owners, investors and directors - expects high returns on profit and increase in the company subscribers

 Employees, work council and labour unions - job satisfaction and security, motivation and appraisal

 Government (local, state, federal and international) and regulators (Nigerian Health Insurance Scheme, Nigerian Medical Association of Nigeria) - Abiding to rules and regulations and paying of duties

 Clients - excellent network connection and high satisfaction on values

 Partners and suppliers - mutually beneficial relationship

However, the Nigerian environment which is characterized by high level of uncertainty affects strategic planning. The uncertainty in the external environment that affect this organization is increased through environmental dynamism and complexity. The organization dealing with different rates and frequency of changes in the environment characterized its environmental dynamism and also, the environment of the organization dealing a range of activities that affects the company directly characterized its environmental complexity. This affects the strategy planning of the organization and its positions in the market.

Therefore, the BCG matrix will be used to analyse its effects on current business plan.

BCG Matrix

Analysis on current business plan

Stars (high growth, high market share) Question Marks (high growth, low market share)

Cash Cows (low growth, high market share) Dogs (low growth, low market share)

The effect on business plan

Star - Business units to be maintain and improve on products

Question Marks - .Business units to improve on services with good commercial potentials

Cash Cows Business Units will beat their profit target easily

Dogs Business Units fight an impossible battle and, even worse, investments are made now and then in hopeless attempts to 'turn the business around'.

Therefore, the position of the company would be analyzed with SWOT

Strengths

High prolific professional staffs.

Cultural connections

Extraordinary reputations

Geographical advantage (superior location)

Innovative services

Weakness

Absence of marketing plan

Gaps in capabilities and service areas

Undifferentiated service lines

Opportunities

Changes in population profile and need

Lack of dominant competition

Availability of new technology Threats

A shrinking economy

An increase in health care costs

Increased regulation

The strategic options of the organization are analyzed within the framework of the Porters Generic Strategies. The strategic options are

Cost Leadership Strategy - Here, the organization sets out to become the squat cost producer in its industry.. They may include the pursuit of economies of scale, proprietary technology, preferential access to raw materials and other factors. A low cost