Final Strategic Plan

Running head: STRATEGIC PLANNING

Kaiser Permanente

Strategic Evaluation and Recommendation

Qiana Reynolds

Lisa Diesel

STR-581

May 22, 2017

Strategic Evaluation and Recommendation

An organization’s key competencies are supposed to be emphasizing on satisfying the preferences or the needs of customers so as to achieve excellent and above average returns. It is made possible by business level strategies. “These strategies show detail activities which are taken to give values to customers of an organization as well as to gain competitive advantage through the exploit of the core competencies in individual, particular products and service markets” (Dess, 2016). Business-level strategy is usually concerned with the position of the company in the industry as compared to its competitors as well as the forces of competition. Kaiser Permanente understands that customers are the essence or the foundation of its business-level strategies. They help answer the questions; who will be served; what customer requirements must be met; how that customer needs shall be satisfied among others. This is identified by the organization’s senior management.

Kaiser Permanente embraces three generic business level strategies which it uses to come up with a competitive advantage over its competitors. Those are cost leadership, differentiation and focus (low cost & differentiation). Companies can also decide to compete in a focused market or broad market. Let us look at the business level strategies that Kaiser Permanente uses.

The first business level strategy is cost leadership. Companies compete for broad customer depending on price. Price usually depend on internal efficiency so as to have a margin which sustains the above average returns as well as cost so that customers can search for you r service or product. The strategy operates well for Kaiser Permanente because their services are standardized and acceptable to the customers. To be a cost leader, efforts to lower the prices as compared to competitors is necessary. The second business level strategy is differentiation. Here, the value is given to the customers by unique features as well as characteristics of the products and services of a company rather than by lowest price. It is achieved through rapid product innovation, high quality, image management, technological advancements, high customer service and excellent product features. The third business level strategy is focused low cost. Companies do not compete on prices only but also choose a small market segment to deliver goods as well as services to. For instance, an organization which sells products to the government of the United States. The last strategy is focused differentiation. “Companies do not compete by differentiation only but also chooses a small market segment to offer goods and services” (David Gallear, 2010).

Corporate level strategy is most concentrated with strategic decisions which business makes, and which affects the whole company. Human resource management, allocation of resources, financial performance as well as mergers and acquisition are part of the corporate level strategy. There exist three kinds of corporate level strategies employed by Kaiser Permanente from time to time shifting between them. The first strategy is “value-creating” strategy. The strategy seeks to add perceived and real value products as well as services provided through the company by exploiting the economies of scope. Many businesses now focus on value creation both in the context of creating better value for customers purchasing its products and services, as well as for shareholders in the business who want to see their stake appreciate in value ("Business Dictionary," 2017). Resources of the organization might be shared with an entire company to increase efficiency and also to reduce costs. One of the ideas leading to value creating a strategy is diversification i.e. delivering more goods to more consumers in the market with the aim of dominating the entire market (M Goold, 2016).

The other corporate level strategy which Kaiser Permanente can adapt is a value-neutral strategy. An organization may use value-neutral strategy if this company is not concerned much with manpower as well as resource allocation as with securing the current position within the market. Value-neutral strategy assists shore up operation plan of the organization. Creating synergy among various departments, securing a steady cash flow initiating regulatory oversight as well as operating towards risk reduction are some of the value-neutral strategies. The last corporate level strategy which a company can employ is a valued-reducing strategy. The strategy occurs on a company-wide level if customers or stakeholders realize that only top level executives are getting benefits from diversification. In such a case, value-reducing strategy reemphasizes on company’s market, assist it in identifying target demographic as well as implementing mechanisms to prevent harmful or unnecessary growth (Dess, 2016).

The global strategy can be defined as a company’s strategic guide towards globalization. The global strategy covers multinational, global as well as international strategies. The strategies are designed to help a company to achieve set objectives of international expansion. In the moment of building global strategies, is important to differentiate among some forms of international expansion which arises from the capabilities, resources as well as the current international position of an organization. When the organization is still concentrat ing on the home market, then the strategies outside its home market may be considered international. Kaiser Permanente employs global business strategies so as to reap the rewards and benefits of trading in the global or worldwide market. A robust global strategy address the following questions: how to build the required global presence? What should be an extent of market presence in main markets in worldwide? How would the company run global presence in global a competitive advantage? The classification of global business strategy is usually employed by organizations that operate in foreign markets. Kaiser Permanente deals with customers from all over the world. Those who values the organization know what the get from it in return. However, Kaiser Permanente mostly focuses on its home market. The company has international strategies in their model to help increase their sales.

Kaiser Permanente should implement a combination of cost leadership strategy and value-creating a strategy. The reason behind choosing cost leadership is because Kaiser Permanente provided standardized products and services with characteristics and features which are acceptable to customers i.e. with minimum differentiation level and at lower competitive prices. Customers would receive value when the organization implements a cost leadership strategy successfully. Value-creation is the main objective of m any companies. Creating value for its customer's assists in selling services and products while still creating value for stakeholders. The value- creation strategy has become increasingly recognized as an excellent management goal. The combination of these two strategies can be very helpful in an organization. Customers would be very glad to know that they are valued, and they are provided with quality products and services. This strategy works well for Kaiser Permanente because their services are standardized and acceptable to the customers. To be a cost leader, efforts to lower the prices as compared to competitors is necessary and then create value to the esteemed customers (Dess, 2016).

David Gallear, L.-S. B. (2010). Business‐level strategy and performance. The moderating effects of environment and structure", Management Decision, Vol. 48 Issue: 6, pp.907-939, doi: 10.1108/00251741011053460.

Dess, D. W. (2016). Corporate-Level Strategy, Business-Level Strategy, and Firm Performance. Boston: Pearson Education.

M Goold, A. C. (2016). Corporate-level-strategy. Hoboken: John Wiley & Sons.

Business Dictionary. (2017). Retrieved from http://Read more: http://www.businessdictionary.com/definition/value-creation.html