This unit aims at assessing the business environment of a leading healthcare organisation of the United Kingdom namely NHS operate with the aim of delivering optimal health care services. Therefore, various models like as SWOT, PESTEL and Porter’s five force analysis are applied to analyse external environment of concerned business and their impact on operational activities. The report is followed by a self-reflection on learning and development of key skills after the completion of the assignment.
United Kingdom’s healthcare system is widely developed as the government has its own systems of publicly funded healthcare the state-owned health care system is more developed as compared to private sector and voluntary provision (Young et al., 2011).
As per the ranking of Commonwealth Fund, in 2014, healthcare system of the UK was ranked at the top among the other healthcare system of developed worlds in terms of Quality of Care (i.e. coordination, and patient-orientation, accessibility to Care, equality and efficiency. The total expenditure on the healthcare system of UK accounts for 8.5% of GDP (UK healthcare, 2017).
National Health Service (NHS) is the largest health services in England, Wales and Scotland which was started in 1948. The company offers free treatments to UK residents, and the unit is the 98.8% funded from general taxation. The company has employed approx1.6 million people during 2015-16 (NHS England, 2017). The main issue faced by the company is of raising the cost and current financial crisis, in some area, innovations and technological breakthroughs are faced by the company that requires that require more investment (Health London, 2017).
Strengths
NHS is the biggest and most prominent healthcare organization in the UK which provides great services to its clients. Its biggest strength is that it is very cost-effective in comparison to other private healthcare (NHS England, 2017). Directly, there is no actual competitor of NHS in this zone, but it does not run any monopoly in the UK. Unlike other health institutions, NHS covers all the treatments even those which is full of complexities. The strength of NHS is that it has very qualified and skilled staff which treats its clients with so many cares and concern. It always lives up to the expectations of its clients and maintains an open relationship with them.
Weaknesses
One of the biggest weaknesses of NHS is that it has a lot of waiting time issues as clients need to wait for long to get properly treated. Another weakness of NHS is that all the staff members of the NHS are efficient and have lack of knowledge which is creating a lot of problem in their working. There are often chances of non-availability of the nurses to attain the clients (Health London, 2017). NHS is cost-effective, more and more people used to get attracted towards it, but NHS is insufficient to fulfil all the needs of them. NHS basically has mixed gender wards and do not have many private rooms which are a very big issue for the clients who want private rooms.
Opportunities
National Healthcare Services can work on the marketing strategies to build up the profit of the organization. National healthcare services should take an audit of the market, systematic and periodical review of the marketing environment (Health London, 2017). This helps in grabbing the opportunities by which latest technologies for the better healthcare services can be provided to the patients. NHS needs to increase its private investment which will help in raising more funds, and this results in improving the NHS services to the patients (Chiswell, Cooper and Packham, 2015). NHS has a good opportunity to make a link with the volunteer committee who can plan and organize events. Open opinions, suggestions and feedback can be taken from the patients to overcome the weaknesses.
Threats
External conditions and various factors gave a negative impact on the organization, by which NHS can deviate to achieve the objectives. High staff turnover can be a big challenge for the National Healthcare Services. NHS should have to search for a way by which the organization can cope up with the turnover issue. The working of the contractors in NHS is giving a bad impact on the reputation of the organization (Health London, 2017). The confidentiality of the NHS is at high risk. Sometimes depending on the situation of the patient, they have to follow strict orders, and they do not like to follow, but the staff has to make sure that at any cost even by coercion or against the wish of the patient, they need to get strict (Martin, Finn and Currie, 2007). This can cause irritation to the patients, and this will not be a good for the image of the organization.
Political factors
The ideas of the government do not directly match with the ideas of NHS, 2010 elections is the very good example to prove this as at the time of elections payments of specific treatments was done by the government which could not match with the prices of what NHS required (Chiswell, Coopera and Packham, 2015). Different government adopts different policies and strategies which create a big nuisance for NHS, and they do not get the opportunity to set the target for future as the constant change occurs in the political environment.
Economic factors
NHS has been considered as one of the biggest healthcare institutions as it provides quality services to its clients, so it is in a damn need of hiring well educated and skilled staff members which demand high packages. In order to fulfil their demands, NHS suffers economically. NHS always needs to keep their services standardized and should train their staff time to time which involves a lot of expenses, thus again facing economic problems.
Social factors
NHS requires being situated in the prime areas so that if any cases of emergency arise people can easily reach there and can get proper treatment. Another one is that staff members of the NHS wants a complete balanced lifestyle as they need to spend time with their family too, so NHS try to satisfy its staff by providing them a good social time in which they can spend a good time with their families (van Wijngaarden, Scholten and van Wijk, 2012). This will help in providing a good atmosphere in the company as the employees will provide a good amount of contribution and will work happily.
Technology factors
To give a neck to neck competition and make the position stable in the market, NHS needs to get updated with the latest technologies. Especially the surgical instruments used needs to be very well updated with the recent up gradation for providing the best treatment to the patients (Mbachu and Frei, 2011). Also, all the patients who are visiting the hospital, their record should be properly maintained so that when required the information can be recollected.
Environmental factors
For every organization, it is very important to follow their corporate social responsibility. And it is their duty and ethical responsibility for the society to contribute to the environment (Cheng et al., 2013). NHS is providing a good amount of contribution to the environment. The surgical instruments used by NHS are disposable which gives no harmful effects to the environment. In the surrounding of the hospital, NHS created a good ambience by planting trees by which the air across is pure and healthy for the patients as well as to all the people who are directly or indirectly being a part of the hospital.
Legal factors
NHS will have to follow the legal and ethical rules made by the government for the smooth running of the hospital and for the betterment of society (Chiswell, Cooper and Packham, 2015). The quality standards set by the legal authorities must be adopted for the safety and better health of the patient. NHS should maintain the account properly on every year basis so that government can keenly observe the sources of income of NHS and on the percentage of taxes they are paying to the government.
The competition is too high in the healthcare sector, in others words, it can be said inevitable. The companies are now coming with innovative patient care services so as to maximise profit as well as to capture higher market share (van Wijngaarden, Scholten and van Wijk, 2012). The patient satisfaction is the key to achieve a successive position in the healthcare sector. The healthcare sector of the UK is no exception has fierce competitive forces, but NHS has captured market dominance as it is focused towards services excellence (Coles and Porter, 2009). The section herewith deals with Porter’s five force analysis of NHS organisation and deals with explaining five main factors shaping competitiveness in the industry. These factors are bargaining power of suppliers, Threat of substitute, threat s of new entrants; rival the existing firms and bargaining power of customers.
Rivalry among existing firms (Moderate)
The industrial competition for the healthcare sector is moderate; however, NHS is enjoying leading position in the market of the UK due to its extraordinary services and excellent environment (Shaw et al., 2013). The rivals of the company have to face high sunk cost, huge degree of transparency as well as the level of advert expenses. These all key factors allow the company to enjoy a leading position in the market and make them available eligible to give a fierce competition in the industry. However, it cannot be denied that the market is highly competitive and strategically aggressive as many top players are fighting for the supremacy and additional pressure is coming up in terms of “next top drug” (van Wijngaarden, Scholten and van Wijk, 2012). The NHS is now enjoying leading position in the healthcare market.
Suppliers bargaining power (Low): The NHS has its own designed systems of supports, it has expanded its business in each sub-sector of healthcare, and therefore, bargaining power of suppliers is low for the business (Constable, 2017). Nonetheless, some external suppliers influence the ability to restrict the freedom of a firm, and it affects the business profitability, The Company is not dealing in the market to gain profits, but, it is devoted to offering better services to the patients and local public. Therefore, it has maintained good relations with external supplier’s, but when it comes to backward integration to suppliers, there are some issues.
Bargaining power of buyers (Moderate)
The NHS is devoted to free healthcare services to the patients in many areas as it is not a profit organisation. Therefore buyers like to enjoy health services offered by this company. The free health campaign launched by the NHS has created it as a major supplier of health services, and people have the trust on the company, they never want to enjoy private health services (Alderwick and Ham, 2016). However, the poor quality of services, in some area leads to customer switch from one company to another
Threats of Substitutes (High)
The switching cost in the above-cited industry is very low, but the availability of private clinics and better treatments make it possible for customers to switch from NHS in case of higher prices charges or low-quality health services, therefore, it can be said that there is almost seamless ease of substitutes available for public (Martin, Finn and Currie, 2007). The price performance of substitutes is low so public switch to such services. Similar production cost and generic drugs, as well as complementary alternative medicine, create a higher threat of substitute.
Threat of new entrants (Low)
The threat of new entrance is low for NHA as it has already captured a huge market share in the hospitality. The government has possessed a high entry barrier with some factors like as huge capital involved, cost advantage for existing companies, patents, and NHA is enjoying the economies of scale (Walshe, 2017). Adding to this, research and development cost make it a low threat for NHS from new rivals.
The present study is based on analysing external environmental factors that impact decision-making process for effective management of health care entity. As per the analysis in the present study, a decision must be taken after considering all the external factors such as PESTEL, SWOT and PORTER five forces analysis. This will assist business in providing better services by the allocation of available resources in an optimum manner. NHS is one of the reputable healthcare entity in the UK engaged in providing medical services and assistance to multiple patients thus they are required to consider the above-cited aspects of their operational strategies. The company offers free treatments to UK residents, and the unit is the 98.8% funded from general taxation. The strength of NHS is that it has very qualified and skilled staff which treats its clients with so many cares and concern. However; their lack of knowledge and traditional mythologies used for delivering services is creating a lot of problem in their working. In this aspect; external factors assist business in developing quality products and services. Quality is the first priority for all business sectors as consumers usually prefer top quality products and services to ensure the value of their money. This quality measure has become an essential part of the production process of firms and organizations all around the world.
For this reviewing of external factors of a healthcare, organisation is required to be supported by making use of suitable tools. The appropriate model of the structure is used with the intention of analysing these factors with the objective that managerial person can make an informed decision. By incorporating this factor into business strategies, NHS can improve their services as they can demand funds for incorporating updated technologies and staff training and development with justifiable budgets. In addition to this; NHS also can get associated with the volunteer committees who can plan and organize events for collection of funds and to get attention in market to strengthen their position.
Quality is said to be a strategic assurer tool in order to retain competitive advantage in the marketplace specifically in healthcare industry. Serving better quality through improved structures and measures results in a waste reduction, amendment, delays, and cost reduction as well as high shares in the market, positive working environment and customer trust. Hence, it is essential to identify measure and develop a quality measure of the healthcare industry. It is more complex to identify the healthcare service quality as compared to other sectors. Healthcare industry aspects like intangibility, heterogeneity and simultaneity make it problematic for the purpose of defining and measuring quality.
In the industry of healthcare, rivals affect various perspectives of relations; several studies have reported that the effect of increasing competition. For instance, various studies have surveyed the relationship between healthcare quality and competition with the competition and system costs of health care and with competition and customer satisfaction. Studies stated that competition is able to increase value and standards for customers. Improvements in quality and procedures result in reduced costs that will consequently lead to customer satisfaction.
By considering the present study, it can be said that several issues are experienced by the healthcare industry. The effect of increasing competition on healthcare quality and procedures is undefined. Moreover, the study also concerns the relationship among quality measures of health care industry provided to patients, and their cost of the system of offering healthcare is not as wide. Several studies offer contradictory results. We recommend that the uncertainty considering the effect of competition regarding quality, satisfaction and cost measures occurs due to these issues which have been previously observed in isolation. The nature of interconnection in these issues states that will be examined simultaneously.
My career goal is too managerial person in leading healthcare entity. After reading this study, I reformed my viewpoint and perception regarding decision making in health care entities. If the decision is taken into account after considering all the specified factors and supported by all the terms of external environment factors, then it will be definitely authentic and there will be hundred percent chances of achieving success.
I have learned several lessons regarding the effect of the practical appliance of structural and moral aspects in terms of healthcare industry and ways of making appropriate decisions. However, this study helped me out in closely understanding methods of decision making by developing my skills. Moreover, this proposed study assisted me in the understanding approach of the marketing mix, proper use of management tools and developing critical thinking skills.
In accordance with the present study, by making use of these strategies now, it is possible for me to take suitable decisions on being a position of manager in health care entity. I will be able to incorporate these external factors by making use of my enhanced skills. This learning will also make a contribution in achieving my desired career goal.
Conclusion
In accordance with the present report; conclusion can be drawn that NHS is devoted to free healthcare services to the patients as well as has captured a leading position in the UK healthcare system. The main issue faced by the company is of raising healthcare cost, untrained staff and traditional methodologies employed for delivering medical services and assistance. However, these aspects are tend to be improved by incorporating external factors due to its increasing influence on operational aspects. In the end, it can be said that NHS is updating their business strategies by considering external environment factors to maintain their position of leading healthcare services provider in the UK. Along with this they aim to enjoy a competitive position in the market; to maintain the trust of service users in the existing image of NHS in the UK.
References
Alderwick, H. and Ham, C., 2016. NHS in England embraces collaboration in tackling the biggest crisis in its history. SAGE
Cheng, S.Y., Bamford, D., Dehe, B. and Duggan, M., 2013. Improving clinical access to mental health services in the NHS–the application of Lean thinking. British Academy of Management.
Chiswell, C., Cooper, R. And Packham, C., 2015. Healthcare public health. Practising Public Health: A Guide to Examinations and Workplace Application, p.45.
Coles, L. and Porter, E. eds., 2009. Public health skills: a practical guide for nurses and public health practitioners. John Wiley & Sons.
Constable, S., 2017. Medical leadership–in the scrum or shouting from the sidelines?. Future Hospital Journal, 4(1), pp.37-38.
Health London , 2017. Today’s NHS – our current challenges. Retrieved on 11 November 2017, from https://www.myhealth.london.nhs.uk/help/nhs-today
Martin, G.P., Finn, R. and Currie, G., 2007. National evaluation of NHS genetics service investments: emerging issues from the cancer genetics pilots. Familial cancer, 6(2), pp.257-263.
Mbachu, J. and Frei, M., 2011. Diagnosing the strategic health of an organization from SWOT analysis results: case study of the Australasian cost management profession. Construction Management and Economics, 29(3), pp.287-303.
NHS England, 2017, About NHS. Retrieved on 11 November 2017, from https://www.england.nhs.uk/
Shaw, S.E., Smith, J.A., Porter, A., Rosen, R. and Mays, N., 2013. The work of commissioning: a multisite case study of healthcare commissioning in England9s NHS. BMJ open, 3(9), p.e003341.
van Wijngaarden, J.D., Scholten, G.R. and van Wijk, K.P., 2012. Strategic analysis for health care organizations: the suitability of the SWOT?analysis. The International journal of health planning and management, 27(1), pp.34-49.
Walshe, K., 2017. Sustainability and transformation plans for the NHS in England: radical or wishful thinking? .Sage publication
Young, A. H., Rigney, U., Shaw, S., Emmas, C., and Thompson, J. M. 2011. Annual cost of managing bipolar disorder to the UK healthcare system. Journal of affective disorders, 133(3), 450-456.
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