DPH 485 Test two

days cash on hand

(cash + cash equivalents)/ ([total operating expenses- depreciation and amortization]/365) answers: how many days can firm pay daily operating expenses without collecting more cash

marketing and sales management

- addresses the organization's proposed approach to marketing the new product or service - describes the following: type of marketing to be used, distribution channels to be used, and related advantages

operating statements

- also referred to as profit and loss statements, revenue statements, statements of financial performance, earning statements, and statements of operations - contain financial activity for a specific period - includes revenues, expenses, and the difference between the two

PEST analysis

- an analytical method for deriving driving forces - conducted much like a SWOT process - guides participants to examine each driving force sequentially to provide a more detailed environmental analysis

a vision should

- be apart of an organization's strategic intent - express what the organization wants to become - foster commitment and galvanize employees to action - be short enough to remember and be understandable, and - show employees what they are striving for and give meaning to their work

power of buyers

- buyers can have little or extensive market power, depending on their size, their number, and the nature of the market - buyers enjoy more power when they are large relative to sellers and purchase a large part of a business's output. - buyer power increases if switching costs are low, the number of buyers is small relative to the number of sellers. the demand for the product is marginal, buyers can acquire sellers fairly easily, and the products sellers offer are not critical to the buyer's business

common driving forces in healthcare:

- changes in consumer demand - technological changes - workforce availability - political changes

weaknesses

- characteristics that place an organization at a disadvantage in the marketplace - include poor reputation and market image, old facilities, poor customer relations, and inefficient operations

strategic groups

- clusters of organizations that use the same or similar strategies in an industry - factor/factors used to form strategic groups depend on which best capture essential strategic differences among the organizations in an industry

portfolio analysis

- comparatively evaluates the viability and future of the main components of an organizations business (SBUs or key products and services) - graphically depicts the performance of an organization's products and services - examines the balance between cash flows and growth among key business components - guides strategic allocation of resources

market analysis typically contains the following:

- description of the industry and its prospects - customer characteristics - size of the existing market - competitive analysis - market barriers and impediments

force field analysis

- determines 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

SWOT analysis

- easy to use tool for developing an overview of a company's strategic situation and a better understanding of its internal and external environment - examines four aspects of an organization: 1. it Strengths, 2. its Weaknesses, 3. its Opportunities. and 4. its Threats

organizational and product-related factors affecting rivalry

- equality of organizations' strengths - degree of product differentiation - height of exit barriers - different ownership types - rate of demand growth

ratio analysis

- examines an organization's financial strengths and weaknesses and capital capacity - provides a means to better understand the trends within an organization and compare them with those of other like organization

components of a strategic plan

- executive summary - strategic intent - environmental analyses - strategic priorities and programs - strategic goals and objectives - appendixes

positives of SWOT

- extremely flexible and can be conducted with little preparation - used in a variety of situations and contexts

executive summary

- first section read by stakeholders and generally is considered the most important section of a business plan - typically written last but is placed first - delivers a short presentation to quickly interest potential funders, customers, or strategic partners - highlights the organization's strengths and strongly promotes the plan's purpose

company description describes the following:

- focus and nature of the business and the marketplace needs the company is seeking to satisfy - consumers the company will serve - competitive advantages the company will have, which might comprise location, personnel expertise, efficiencies, or any other feature that distinguishes the company from competitors and provides greater value to customers

market analysis

- focused environmental analysis that examines the healthcare organization's industry, competitors, and relevant markets - defines the organizations current or future market position relative to its competitiors

value chain

- graphical representation of key internal activities an organization performs to create stakeholder value - provides a framework for analyzing an organization's strengths and weaknesses across the flow of product or service development - consists of two broad categories of activities: 1. primary activities (which principally create value for customers) 2. support activities, (which sustain and enrich the primary activities)

strengths

- important capabilities, characteristics, and competencies that enable an organization to compete successfully and/or tat set it apart from its competitors - include name recognition, patents on key technology, cost advantages, skilled employees, and loyal customers

financial skills

- important tools for the strategist that cannot be separated from strategic thinking and strategic decision making - used to ascertain the: 1. viability of acquisitions 2. strength of competitors and establish appropriate metrics for 3. monitoring budgets and progress toward goals

negatives of SWOT

- initiated often without thought for needed background and trend information - participants arrive with only their existing ideas and perspectives, which may reflect their biases and misperceptions - strong personalities may inappropriately influence the results - may not be an obvious way to transform the SWOT output into actionable strategies

mobility barriers

- intra-industry obstacles that impede organizations in a strategic group from joining and competing in another group - may include advertising, research and development expenditures, distribution channels, breadth of product line, patents, and objectives that might be difficult to achieve without large expenditures of time and money

examination of the current status of an organization

- must be based on observed and recorded data - must use a periodic and organized approach - must update assumptions and perspectives

threat of new entrants

- new capacity, new capabilities, changes existing market relationships, greater competition over price and quality, and possible lost of market share

how should values be established?

- obtain key stakeholders expectations for the organization - identify common values among stakeholders - values should be visible to and tangible (felt) by employees - should be memorable

environmental analysis

- only key, critical factors should be analyzed - key factors contributing to both successes and failures should be identified and inform the planning process - key external data also include factors that could significantly impact the organizations direction and ability to fulfill its mission and vision, including data on competitors, industry data, community and customer perceptions, market share, and information on customer origin

contents of an executive summary

- organization's mission and vision - brief description of the organization - growth prospects and projections - explanation of the organization's products and services - existing and needed financing and funding, as appropriate - summary of the organization's future

core competencies

- organizational capabilities developed from organizational learning and experience and then combined in unique combinations - central to fulfilling a company's mission and can place an organization in a position of competitive advantage - created by superior resources and put to use in a way that other organizations may find difficult to replicate

organization and management provides the following:

- organizational chart that shows the relationships among units, products, and other internal structures - ownership information, including legal structure, owners' names, and equity relationships - profiles of the members of the management team, including their names, positions, primary responsibilities, education, unique skills and experience, previous employment, community involvement, and number of years with the organization - governance structure, including governance type and board members' names, positions, expertise, extent of involvement in the organization, backgrounds, and contributions to the organization's success

power of suppliers

- powerful suppliers can extract concessions from their buyers - suppliers consist of a wide array of organizations, ranging from unions, intermediaries like HMOs and insurance companies, and retail outlets to wholesalers and manufacturers of raw materials

scenario analysis

- sensitizes leaders to different possible environments in ways that traditional graphs and written plans do not - helps organizations prepare the knowledge and means they will need to deal with different futures

generally, a mission should contain

- services or products offered - values and standards that distinguish the organization, and - the market in which the organization operates

business plan

- shares similarities with a strategic plan - supports strategic thinking and improves operational implementation of strategy

description of service or product line

- specifies the service or product to be offered and clearly delineates the benefits and value customers will derive from it - explores product's/ services's point in the product life cycle - notes any existing or forthcoming patents - describes relevant research and development activities, if applicable

strategic intent

- statement of commitment to stakeholders and the basis on which the organization defines its successes and failures - identifies stakeholders most important to the organization and the benefits they are to receive

for values to function as a guide, all internal stakeholders should be ____________, _________ ________, and ______________________________.

-be aware of them, accept them, and integrate them daily into their organizational decisions

barriers to entry

-economies of scale - cost disadvantages not related to scale - product differentiation - non-recoverable capital investments - switching costs - access to distribution channels - governmental policy

rivalry

-rivals may invoke different competitive tactics to gain better market positions, greater sales and market share, and other competitive advantages. these tactics include: - lowering prices, adding new or different features to their products, emphasizing their brand image, offering a wider selection of products and services, expanding their distribution network, offering low-interest financing, increasing their advertising, providing longer warranties, and Improving customer service

steps in scenario analysis

1. examination of key factors in the external environment 2. identification of key uncertainties and driving forces 3. creation of scenarios 4. integration of scenarios into strategic planning

stakeholder analysis steps

1. identify key stakeholders 2. determine key stakeholders expectations 3. judge key stakeholder's perception of the organization's performance 4. identify changes needed to satisfy key stakeholders 5. determine the proper level of involvement of key stakeholders 6. incorporate needed changes into strategic plans

porters five forces

1. possibility of new entrants 2. threat of substitute products 3. power of suppliers 4. power of buyers 5. rivalry among competing sellers

PEST

Political Economic Social/cultural Technological

days in accounts receivable

accounts receivable/ average daily revenue

mission

an enduring statement of purpose that distinguishes one organization from another and identifies the scope of its operations in terms of products and markets

by segmenting industry competitors,

analysts refine their view of organizations market positions and gain a better understanding of how the organizations interact and compete.

use of scenario planning

appropriate when significant future uncertainties exist as a result of: - rapidly advancing technologies; - potential shifts in customers' preferences - major market power shifts by consolidation of distribution channels, suppliers, or buyers; or - changes in government regulations

multiple value chains

by looking at multiple value chains, their interconnections, and points of exchange, an organization can - optimize the overall activities of organizations working together to create goods and services, - manage and coordinate product processing from raw materials to end customers, - develop efficient exchanges and processes that benefit all participating organizations, and - build positive relationships between suppliers and customers to establish beneficial exchanges

threat of substitute products

closely related industries almost always produce closely products that can be substituted for each other but differ with respect to quality, cost, and feature; substitutes increase price competition - contact lenses and glasses vs laser surgery; physician specialists vs primary care providers

benchmarking

comparing organizational data to outside benchmarks to determine whether the organizations core competencies truly lead the market. if they do not, this comparison tells the organization the level of effort it will have to make to attain excellence

current ratio

current assets/ current liabilities answers how well can the firm pay its current liabilities (within 12 months)

external stakeholders

customers suppliers governments local communities

vision

desired future state of the organization- what it wishes to become - should be relatively short and written in understandable language - key components should be easy to remember

market competition is greater among rivals of __________

different ownership types

internal stakeholders

employees investors board others

TOWS analysis

examines the same categories of external and internal environmental factors but focuses more on the external environment - explores strengths, weaknesses, opportunities, and threats and then links the four categories to facilitate strategy development

choosing internal statistics

for purposes of strategic management, only a few data should be used for analysis. the data should 1. help measure achievement of the organization's mission and progress toward its vision, 2. reflect important stakeholder needs, and 3. be accurate and timely

values

foundation of an organizations mission and vision; express the ethics that guide an organization's actions and processes - should be the final metric by which an organization determines whether it has succeeded or failed

formulating goals and objectives

goals: general, intangible, broad, abstract, strategic, and long-range objectives: specific, measurable, narrow, concrete, tactical, and short-range

gap analysis

identifies the distance between the organization's current position and where it wants to be

appendix

includes the following: - entrepreneurs personal and business credit history - key managers resumes - photos of products - letters of reference - details of market studies - magazine or book references - details of licenses, permits, or patents - leases, building permits, contracts, and other legal documents - list of consultants, attorneys, and accountants involved in the business

values need to be

incorporated into all organizational operations and processes

2. threat of substitute products

increased competitiveness due to the availability or possible availability of substitutes for buyers' needs

Stakeholders

individuals and groups that have some investment in an organization and/or obtain some benefit from it - includes both external and internal

tangible resources

land, buildings, plant, equipment, cash, and personnel

industry driving forces

major factors causing changes in an industry

trending data

monitoring changes from one year to the next. year to year information enables an organization to determine the direction in which it is moving

culture

organizations must accumulate the proper mix of tangible and intangible resources to ensure successful implementation of their strategies and sustain their strategic value - has suggested to be an effective and durable barrier to imitation because it is difficult to replicate

planning structure

person or unit responsible for gathering and analyzing data and organizing and conducting committee and task force meetings - often overseen by organizations governing board

resources are valuable if they are....

rare, difficult to imitate, and lack substitutes

intangible resources

reputation, brand names, employees' skills, and industry knowledge

differences between strategic plans and business plans

strategic plans - provide focus and direction and specify actions an organization needs to take to achieve its mission and vision - created for overall guidance - generally cover 3-5 years; may extend over as many as 10 or 20 years - aggregate organizational needs business plan - define, analyze, and examine a specific proposal, line of business, or innovative concept - created for tactical and narrower purpose - 1-3 years - identify specific resources for a defined entity

4. power of buyers

the degree of buyers' bargaining power and seller-buyer collaboration

3. power of suppliers

the degree of suppliers' bargaining power and supplier-seller collaboration

components of a business plan

the format and content of business plans are not set in stone; many variations exist. their content and structure depend on the purpose of the plan and its intended audience

5. rivalry among competing sellers

the level of competitive pressures associated with market conditions and actions among rival sellers in an industry

1. possibility of new entrants

the risk and increased competition associated with the threat of new entrants

SMART method

to be achievable, goals and objectives must have the following characteristics: specific measurable attainable relevant time-bound

acid (quick) ratio:

total current assets less inventory/ total current liabilities. answers the firms ability to pay for current assets with cash