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[ANSWERED] Explain the linkage between internal environmental analysis and the value adding service delivery

Assignment:

Exercises:

  1. Explain the linkage between internal environmental analysis and the value adding service delivery and support strategies. How are the value adding strategies linked with action plans?
  2. How does the marketing of a service differ from the marketing of a physical product (good)?

Professional Development:

Case Study #15: “So, Doctor, can you fix this?” A case involving a medical spa. 

  • Perform an internal analysis of the medical spa to determine key challenges faced by the organization. Based on that information, create a “Strategic Thinking Map” for value-adding support strategies (Exhibit 8-9, p. 336).
  • Evaluate the effectiveness of service delivery strategies by answering the questions posed in Exhibit 8-10 (p. 338)

The Professional Development assignment should be between 1500 and 2000 words in length and contain at least two scholarly sources, in addition to the textbook and provided material.  Please submit your assignment in one APA formatted document.

Expert Answer and Explanation

Value-Adding Support Strategies

Exercise

Internal environmental analysis is an important aspect in the development of strategies that lead to organizational growth. When considering internal analysis, attributes that are inherent to the organization that either promote or hinder quality service provision are evaluated. Value addition, on the other hand, is usually controlled by components that are internal to the organization. Therefore, an internal environmental analysis will assist the organization to understand the areas that can be enhanced within the organization, to improve the value of services delivered to clients (Ginter et al., 2013). By developing effective value-adding strategies, one can then evaluate how they ought to improve their services; who those strategies are aimed at; or who needs to act; where resources need to be placed to achieve better service delivery, all of which can then be condensed into implementable action plans.

There are several differences between marketing a product and marketing a service. Given that products are tangible, in most cases, they are marketed based on their value, whereby, the customer has to evaluate the value and match it with the price offered for the product to make the purchase. However, for services, marketing is done based on relationships, this includes the interaction between the service delivery personnel and the client (Rather, 2019). While most of the products offered to the market are fixed, the services given to a client may vary from person to person and is therefore important to ensure that the level of quality of service provision is maintained at a constant or better still improved. Therefore, based on these aspects, service marketing can be seen to be more complex as compared to marketing a product That can also explain the difference in marketing mix between products and services with services having more elements attached to the mix (Isa et al., 2020).

Professional Development

Internal organization analysis is an important step in developing strategic plans that can assist the organization to navigate through the various market challenges and gain a competitive edge. This section of the paper will conduct an internal analysis of a medical spa, and provide value-adding strategies that can assist the organization.

Internal Analysis

Strengths

From the case of Dr. Goyzueta’s spa, various attributes can be observed after conducting an internal analysis. Starting with the strengths of the business, it can be seen that Dr. Goyzueta has been a medical practitioner for a long time and his professional history is one of the aspects that made him more appealing as compared to non-medical spa operators. Like most medical spas run by doctors, the “halo effect” which clients had about a doctor’s reputation, made them even more willing to receive most of their cosmetic services in medical spas as compared to non-medical spas (Young & Chen, 2020). However, his medical background was in a different field and not cosmetics, which was also one of the issues that proved to be a weakness to the reputation of his spa.

Another strength was that the spa industry had high reimbursement rates, with most of the clients coming to receive the services having the ability to pay upfront. In most cases, the clients had to pay out of pocket or using credit cards, with very few, if any insurance companies covering for procedures done in the spa. The medical spa industry had relatively cheap malpractice insurance, which also made the cost of operations slightly lower in comparison to other medical practices.

Still, on strengths, the market base in the spa business has also been rapidly growing from one million in 1997 to over nine million in 2006 for non-surgical cosmetic procedures. This means that the cosmetic industry was still in its thriving stage and with the promise of better profit margins. The advertising efforts made on products offered in medical spas increased the demand for those services.  Another aspect that made Dr. Goyzueta’s spa to have an edge is the fact that he was appealing to the Latino community where he comes from. The fact that he is bilingual also made him appealing to the English-speaking clients too.

Weaknesses

Some of the weaknesses faced by Dr. Goyzueta’s spa include lack of insurance coverage for most of the services offered in the spa. While most of the clients were able to fork out the incurred expenses out of their pockets, there was still a large chunk of the population who wanted but could not afford the facilities offered by the spa. Therefore, having insurance coverage could potentially open up a wide market that was currently locked out from accessing procedures offered in the medical spa (Sandberg, 2017). Another weakness that was apparent to the spa was its location. The fact that it was affected by flooding makes it to be susceptible to such events in case they happen again in the future and may pose a threat, including damage to property if a solution is not found.

Starting a medical spa was also very expensive given the cost of high-end technology required to perform some of the procedures. This makes it difficult to recoup investments, especially if the market fails to respond or in the event, they are damaged, for example, due to floods as was experienced. Another weakness was the fact that the spa was still modeled like a physician’s office thereby, lacking the ambiance similar to those of spas. This is a weakness that affects most of the medical spas, whereby, they fail to balance or consider the challenges faced by both medical spas and beauty salons. Clients in medical spas needed to be pampered in a friendly manner which is not the same in a usual medical office

Opportunities

Other than the apparent weaknesses, there are several opportunities that are apparent to Dr. Goyzueta’s spa. The first is that there are various options for market differentiation in the medical spa industry which could be capitalized, for example, Dr. Goyzueta can opt to provide services specifically targeted at the Latino community. There is also an opportunity to venture into the middle class and high-end market since the income levels of residents living in the neighborhood have also been increasing. There is also the opportunity of venturing into partnerships with other physicians, organizations, and even learning institutions to further enhance the services provided by the spa.

Threats

Some of the impending threats apparent to Dr. Goyzueta’s spa include a bad reputation created by unqualified personnel operating medical spas, which spoils the image of the entire industry, including those spas with a good reputation. Another threat is the changing government regulations, some of which may be detrimental to the performance of the business. There is also the threat of new entrants, including from physicians who are not in the same field for example gynecologists, dentists, urologists, to list a few. The numerous numbers of new entrants can be linked to ease of market penetration and the apparent attraction of market lucrativeness. Another threat is the provision of numerous complex procedures, which may be difficult for only one person to manage without some form of partnership or employing other skilled personnel conversant with those procedures.

 

Strategic Thinking Map

Value-Adding Service Delivery

Strategies

Results of Internal

Analysis

Requirements of

Selected Strategies

Comparison

of Strategy

Requirements and

Internal Analysis

Maintain

or Change

Pre-service

·  Market/marketing research

·  Target market

·  Branding

·  Pricing

·  Promotion

Poor marketing research on client needs specific to the medical spa industry.

·  Branding was found to be lackluster in comparison to other spas and more like other medical offices.

·  The target market was mainly focused on clients who could afford those services out of pocket with the low-end market being left out

·  Ineffective promotion efforts which have not translated to new clients

 

 

·   Increased market research efforts

·   Change in communication strategies

·   Redesigning of the facility and brand

·   Price adjustments

·   Enhancing the promotional efforts

More market research needs to be undertaken to understand the needs of the target clients (Ginter et al., 2014)

·   Communication through different advertising strategies to increase client awareness on what the facility offers

·   Redesign the facility to create an ambient spa-like environment

·   Price adjustments and discounts will attract different market niches, including low-end clients.

·   Enhancing the promotional efforts to promote the brand of the spa and attract more new clients

 

Change

Point-of-service

·  Clinical operations

·  Marketing

·    The personnel working in the organization were not adequately trained to provide quality customer care services and market the product offered

·    The facility did not have an elaborate evaluation tool to assess the quality of services rendered

 

·   Introducing a training program that will enhance the skills of the service delivery personnel, especially skills on customer engagement

·   Instituting a quality improvement initiative that will enhance the quality of services offered

 

·   The introduction of training will be effective in that it will enhance the skills of the service delivery personnel, especially skill on how to properly engage with the clients and how to promote the products offered by the facility (Ginter et al., 2014).

·   Quality improvement initiatives will assist the facility to always be at the forefront in providing topnotch quality services to its clients.

Change
After-service

·    Follow-up activities

·    Billing

·    Follow-on activities

·    The facility lacked an effective referral network that could lead to the recruitment of new clients. ·   Development of vibrant referral system with clients and other affiliate organizations ·   By developing a vibrant referral system, more clients will be attracted and recruited to the organization. Change

Effectiveness of Service Delivery Strategies

Increased market research will mean that the services provided will be specifically aimed to meet the needs of the market. Similarly, offering discounts and price adjustments for different market niches will ensure that the services provided by the spa taps into a wider pool of clients. Introducing quality improvement initiatives, including training, will further enhance the quality and efficiency of services offered and will ensure a system of continuous improvement that will respond to the changing consumer needs (Ginter et al., 2013). The introduction of an elaborate follow-up and referral system involving both clients and other affiliate organizations will be an ideal way of attracting new clientele to the spa. This will be a cost-effective method as compared to other promotional initiatives, given that it will mainly entail word-of-mouth (Taheri et al., 2020). Therefore, the strategies selected will be effective in improving the number of clients visiting Dr. Goyzueta’s spa.

Conclusion

The paper has conducted an internal environment analysis on Dr. Goyzueta’s spa and elaborate value-adding strategies established, which could see the business gain a competitive edge. The strategies require a change of internal structures that will assist in enhancing the efficiency and effectiveness of services rendered to clients and at the same time attracting new customers to the spa.

References

Ginter, P. M., Duncan, W. J., & Swayne, L. E. (2013). Strategic Management of Health Care Organizations (7th ed.). San Francisco: Jossey-Bass.

Isa, S. M., Kelly, L., & Kiumarsi, S. (2020). Brand switching through marketing mix: the role of brand effect on smartphone users. International Journal of Process Management and Benchmarking10(3), 419-438. https://doi.org/10.1504/IJPMB.2020.107940

Rather, R. A. (2019). Consequences of consumer engagement in service marketing: An empirical exploration. Journal of Global Marketing32(2), 116-135. https://doi.org/10.1080/08911762.2018.1454995

Sandberg, D. S. (2017). Medical tourism: An emerging global healthcare industry. International Journal of Healthcare Management10(4), 281-288. https://doi.org/10.1080/20479700.2017.1296213

Taheri, B., Chalmers, D., Wilson, J., & Arshed, N. (2020). Would you really recommend it? Antecedents of word-of-mouth in medical tourism. Tourism Management83, 104209. https://doi.org/10.1016/j.tourman.2020.104209

Young, C., & Chen, X. (2020). Patients as consumers in the market for medicine: the halo effect of hospitality. Social Forces. https://doi.org/10.1093/sf/soaa007

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