Strategic Management Paper for
Mary Mediatrix Medical Center
Presented to
Professor Francisco Roa
Strategic Management
By:
Roselle Marie D. Azucena, RN, MAN
Thursday 6:00-10:00 pm
Sta. Rosa Campus
TABLE OF CONTENTS
Chapter
Topic/Title
Number
Page
Number
Acknowledgement
Executive Summary
I
Introduction
II
Research Design and Methodology
III
External/ Environmental Analysis
IV
a.
Economic Factors
b.
Social and Cultural Factors
c.
Environmental Circumstances
d.
Demographic Forces
e.
Political and Government Forces
f.
Legal and Legislative Forces
g.
Technological
Industry Analysis
a.
Description of the Industry
b.
The Market
c.
Service Creation and Delivery
d.
Financial Analysis
e.
Industry Developments
1-5
6-9
10-36
37-65
V
Company Analysis
66-92
a. History and Ownership of the Company
b.
Management, Company Culture, Structure
And Chart
c.
Present Vision and Mission Statements, Code
Of Ethics
d.
Financial and Non-Financial Objectives
e.
Present Strategies, Market and Competition
f.
Financial Analysis
VI
Basic Assumptions
VII
Strategy Formulation/ Matching Stage and
Decision Stage
a.
External Factor Evaluation Matrix (EFE)
b.
Internal Factor Evaluation Matrix (IFE)
c.
Competitive Profile Matrix (CPM)
d.
Strength/Weaknesses/Opportunities/Threats
Matrix (SWOT)
e.
Strategic Position and Action Evaluation Matrix
f.
Internal-External Matrix (I-E)
g.
Grand Strategy Matrix (GRAND)
h.
Matrix Summary
i.
Quantitative Strategic Planning Matrix (QSPM)
93-98
99-113
VIII
Recommendations
127-142
IX
Evaluation and Success Indicators
143-152
Appendix
A- Request Letter
B- Financial Statements Mediatrix
C – Checklist
D- Physician’s Questionaire
E- Supplier’s Questionaire
Dedication
This strategy paper is dedicated to the most important people in my life who had
made this endeavor possible…
To my husband Jay, the love of my life and best friend
God gave me you to make everything impossible be possible
Thank you for your selfless love, support and encouragement in all my endeavors
To my six children John, Matthew, Mika, Cheska, Anika and Luke,
my angels and my constant cheerleaders
Thank you for all of your kind understanding and unwavering love and support
For trying to be self-supportive and independent young as you are
To spare me the much needed time to finish this paper
To my Dad and my Mom, my unsung heroes and mentors
Thank you for teaching me the value of hardwork, dedication and humility
These values had helped me endure all obstacles and challenges
encountered in this study
To my sisters Sheila and Stella, my brothers Bong and Rico whose presence and
unconditional love were felt despite distance
Thank you for being there whenever I needed you
And
May I humbly dedicate this paper to God, Almighty Father
Who had masterfully crafted this path and has guided me towards this direction
for a good reason I do not know what nor why today
Thank you Father for all the blessings you had given me
ACKNOWLEDGEMENT
Professor Francisco Roa
Faculty and Staff of Ateneo Graduate School of Business
Management and Staff of Mary Mediatrix Medical Center
Nursing Service Department
Lipa-Ateneo Regis Colleagues specially to the following:
Henry James Avecilla, Winnie Constantino, Paul Chang and Danjie Reyes
And
My heartfelt thanks to Dr. Robert Magsino and Ms. Marissa M. Panganiban for all the
support and for giving me an opportunity to serve MMMC
EXECUTIVE SUMMARY
Mary Mediatrix Medical Center is a tertiary hospital in Lipa City, duly registered
and recognized as a corporation by the Republic of the Philippines. It was recently
awarded as a Center of Excellence by Philhealth. It is made up 177 MD shareholders
from the City of Lipa, nearby towns and Manila as well.
To be the premier “Hospital of Choice,” to serve the residents of Lipa and other
high growth areas in Batangas, Laguna, Cavite, Quezon and Mindoro by bringing the
much needed medical services closer to home at par with the other medical centers in
Manila is its main reason for existence.
There are seven critical success factors that are found in the Competitive Profile
Matrix – service orientation, financial position, market positioning, human resource,
technology, outpatients, and ancillary services. Service Orientation received the highest
weight among the critical success since most companies in the healthcare industry now
focus on the customer and not so much on profit. Pricing Competitiveness, Financial
Position and Market Positioning are the second most important critical success factors.
Among the external factors identified, presence of Industrial park in the region
and Demand for Medical Centers Offering Highly Specialized Medical Services and
Programs were given the highest weights of 0.15 because the industrial park will
create growth in the market and increase profitability most specially of the ancillary
services of the hospital. Demand for medical Centers offering highly specialized medical
services is also a high weighted opportunity because there are only few hospitals in the
region that has the capability to deliver these services and among these facilities,
Mediatrix has the most advanced and complete facilities to render specialized services.
Example of these specialized services would be Cathlab, MRI, CABG, Body Box for
Pulmonary clients etc.
Slow reimbursement of Philhealth claims is a major weakness by the hospital
as these may have been cause by improper billing or accomplishment of requirements.
With a high census like Mediatrix, slow return of claims might drain out the financial
resources that could otherwise be used for other profitable endeavor.
Six critical success factors were identifies to profit in the healthcare industry.
Quality Service orientation and delivery, Financial Position and Human Resource were
given the highest weight of 0.2 respectively.
Financial position is also a key competitive factor because resources are expensive and
service entails more employees and more operating cost.
Using the eight matrixes Mediatrix is projected to be a good and stable
company leading the industry in the area of Lipa. It has an IFE of 3.05 and EFE of 3.12
with a CPM of 3.75 leading the competing hospitals in the area.
After evaluating the major players in the Healthcare market of Lipa. Mary
Mediatrix Medical Center emerge as the leader in the pack of wolves by dominating 4
critical factors such as Finance position, clearly reflected by the financial ratios and
revenue derive from 50% market share of both the OPD and In Patient markets.
Space matrix shows that Mediatrix is responding well to both external and
internal factors and is aggressive to fully utilized its financial advantage over
competitors. To further dominate the market and retain leadership it should employ
strategies such as market penetration, market development, product development,
forward, backward, horizontal integration or go to diversification of various types such
as concentric, conglomerate or horizontal.
For Mediatrix to retain leadership of the market it must continue to grow and
build, otherwise closest competitor maybe able to overtake it. Strategies suggested are:
Market penetration, Market Development, Product development, Backward integration,
Forward integration and Horizontal Integration
Mediatrix is plotted in quadrant 1. According to Fred Davis, firms located in
Quadrant 1 are in an excellent strategic position. Continued concentration on current
markets and products are appropriate strategies. It will be unwise for this firms to shift
from the established competitive advantages. If the firm has excessive resources, then
backward, forward or horizontal integrations maybe effective strategies.. When a firm is
too heavily committed to a single product, concentric diversification may reduce risks
associated with a narrow line. Q1 firms can afford to take advantage of external
opportunities in several ways and can take risks aggressively.
In QSPM key external factor given the highest weights are presence of Industrial
park and demand for medical center offering highly specialized medical services and
major key internal factor is the 100% highly credentialed MDs. After rating and
multiplying it with the allotted weights, Market penetration remains a priority, followed by
background integration ,product development then by market development.
Strategies formulated for Market Penetration are :1. Offer Executive Packages,
Pre-employment, annual PE and hospitalization services to the new companies in the
Industrial Park through an integrated marketing plan ;2. Develop Age Specific Care
Programs and Services ;3. Add Service Quality Improvement Programs such as
Personalized Services to
develop customer loyalty ;4. Offers highly specialized
services that cannot be provided by other hospitals ;5. Tie up with other hospitals in the
region to be the referral center of patients needing highly specialized care and
diagnostic services. Backward Integration strategies includes: 1. Tie up with suppliers to
offer services at a lesser cost ; 2. Improve and upgrade facilities;3. Tie up with
Government Hospital to refer indigent patients;4. Secure Long term Loans to increase
Cash; 5. To create a systematic process of facilitating prevention of bad debts or
ballooning accounts receivable;6. Improve and upgrade facilities.
Over all the strategies will be evaluated and monitored through control measures
based on key performance criteria through a balanced score card.
With the intervention the company will have an increase in revenue by 20%,
decreasing cost of sales by 5%, with OPEX at 20% and an additional bank loan of 10M
at 7.5%/annum at AR and AP in 30 day term earning a net profit of 55,999,549.95 from
a baseline projection of 4,358,082.26.