Kaiser Permanente Business Strategy

The purpose of this paper is to analyze the internal and external environment of the business. In order to achieve this, the paper undertakes a VRIO analysis of Kaiser Permanente and discusses how well the organization can leverage its strengths to execute the business strategy. The paper also discusses how effective is the organization structure and management system design. With regard to the external environment, the paper underscores the key findings of the PESTLE analysis as well as the Five Forces analysis and how the organization can position itself well to address these issues. The paper will also recommend a course of action for the leadership based on the analysis. Imitability: the organization has several branches across the United States. In addition, the services offered in are customized to suit the values, needs, and expectation of the clients while offering professional medical care.

Moreover, the organization has an internal strategy to improve its application of technology in the medical processes to minimize errors and enhance patient safety. In order for other healthcare organization to arrive at this level, there is need for a large amount of time and resources before catching up with Kaiser Permanente (Cardeal & Antonio, 2012). Organization: the policies and procedures within the organization are aimed to empower and promote team leadership and collaboration. PESTEL Analysis There are numerous external factors that influence the operation of the hospital. Notably, the trends in healthcare industry are influenced by the shift or changes in the external environment. Political Factors: there are numerous political factors that influence the operation of the organization such as policy changes regarding taxation, regulation of drugs and medical equipment, insurance regulations, and consumer protection incentives.

In addition, the budget allocation in government to improve healthcare also influences the healthcare industry within the jurisdiction (Frue, 2018). Economic Factors: the performance of an economy influences the delivery of healthcare services within an organization. Moreover, sewage and other waste materials must be treated before they are released into the environment (Frue, 2018). Legal Factors: the legal factors are slightly related to political forces and the regime that is running the government. However, there are core issues such as consumer protection laws, licensing policies, health and safety standards, and social and corporate responsibility regulations influences the type of medicine, care, and activities undertaken within a healthcare entity (The Impact of Political, Economic, Socio-Cultural, Environmental and Other External Influences, n. d. The Five Forces Analysis The Five Forces analysis is used by organizations to assess the attractiveness and profitability of a particular industry.

There are many suppliers, tough competition among suppliers, and many alternative medicines (Norman, 2014). Buyer Power: the organization faces a weak bargaining power since there is a large pool of consumers or patients. Based on the analysis, the large population and increasing demand for quality care makes it difficult for consumers to impose significant pressure of healthcare organizations. There is a large population of consumers, high diversity of consumers, and small size of purchases (Norman, 2014). Threat of Substitution: there is also a weakened threat of substitutes because the organization a variety of healthcare services that are customized to fit the client needs and values. In this regard, the business processes within Kaiser Permanente will be aligned with the fresh trends in the market.

Recommendations Based on the analysis, it is important for the organization to develop a strategic planning that will ensure that there is regular and constant understanding of the market. It is also essential to adapt and change as the organization aligns itself with the new developments in hospital management technologies and healthcare delivery systems. The adopted strategy must be aligned with the changes on the external and internal environments such as technology, politics, business culture, assets, competitors, suppliers, and market trends. This will ensure that the decision of leaders are informed and warrant the long-term sustainability of the business. Frue, K. PEST analysis of the healthcare industry. PESTLE Analysis. Retrieved from http://pestleanalysis. com/pest-analysis-of-healthcare-industry/ Norman, G. uk/public-health-textbook/organisation-management/5b-understanding-ofs/assessing-impact-external-influences.