MHA-FPX 5010 Current Environmental Analysis

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MHA-FPX 5010 Current Environmental Analysis

MHA-FPX 5010 Current Environmental Analysis

Health care organizations operate in diverse environments that differ in populations, risks, and opportunities for growth, among other factors. As they seek expansion and excellent service delivery, health care organizations must assess the characteristics of internal and external environments. An in-depth analysis of the environments enables organizations to improve their directional strategies and plan effectively. The analysis provides knowledge regarding areas where the organization should invest most resources, innovate more due to competition, and avoid according to the risk potential. Cigna operates in environments with high growth and risk potential. This paper provides Cigna’s environment analysis focusing on the features of external and internal environments and how they can affect the organization’s strategic growth.

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Cigna’s Directional Strategy

An organization’s directional strategy guides the decisions that the management and key stakeholders should make to enable it to achieve the set objectives. Ginter et al. (2018) described a directional strategy as the results that health care organizations must achieve to be considered successful. If well developed and communicated across the organization’s departments, directional strategies stimulate performance. As a result, Cigna’s management should be aware of the importance of directional strategy and incorporate components that will steer the organization towards growth.

As a worldwide health service organization, Cigna’s mission is to improve the health and well-being of the populations it serves. Cigna also looks forward to improving people’s peace of mind by providing simple, affordable, and predictable care. The mission implies that Cigna works towards making it easy for all populations to get care. It envisions a global population that accesses comprehensive health as Cigna serves as people’s partner in total health and wellness (Daly, 2020). The organization’s values are its culture. Cigna cares deeply about its clients, partners, collaborates where necessary, innovates and adapts, and acts speedily and with purpose as appropriate. As an organization dedicated to creating a better future, its objectives can only be achieved through careful planning and responding effectively to external and internal market forces.

External and Internal Environments

Health care organizations operate in a complex and dynamic industry where numerous changes occur and affect competitiveness significantly. Primarily, the magnitude of impacts varies according to the size of the population that an organization serves and the scope of operations. Externally, politics and economic situations in a particular country have enormous implications for an organization’s strategic plan. The same case applies to Cigna due to its global nature. Internally, organizational policies, resource potential, brand portfolio, and the range of products and services offered affect competitiveness and strategic planning goals.

MHA-FPX 5010 Current Environmental Analysis

Cigna’s External Environment Scan: PESTLE Analysis

Political Factors

As a global health service company, Cigna cannot be immune to political pressures and related influences in different countries. According to McInnes et al. (2019), operating in different political environments exposes an organization to varying political systems and risks. Accordingly, comprehensive planning is vital before reaching new markets across the globe. Cigna should also diversify the systematic risks of various political environments. Some political factors that must be factored in the strategic plan include political stability, varying taxation rates, pricing regulations, and health-related trade regulations and tariffs. Each element represents a significant challenge or opportunity depending on the policies applied in a particular country. Liu et al. (2020) found that strict market regulations due to the COVID-19 pandemic have affected supply chains in Asian countries. As a result, changing political policies will continue to affect strategic agility in the context of the fight against the pandemic and other emerging health care challenges.

Economic Factors

Success in the market depends, largely, on a country’s economic situation. Mostly, people’s purchasing power, foreign exchange rate, and inflation rate determine the demand and supply of health care products and services. Due to its global nature, Cigna is not immune to varying growth rates in different countries, inflation, and consumer spending. Succeeding compels Cigna to reexamine the type and stability of economic systems in its countries of operation. Other vital influences include government interventions in the free market, such as support to vulnerable populations. For instance, the US government supports elderly Americans to access health insurance coverage through Medicare and low-income populations through Medicaid (Fulmer et al., 2021; Rapfogel & Gee, 2021). Other countries use different programs, affecting the efficiency of the markets varyingly.

Social Factors

Populations differ in terms of beliefs, shared values, perceptions of present-day’s health practices, and demographics. Such variations further affect their vulnerability to diseases and their readiness to change their health approaches. Budreviciute et al. (2020) found that lifestyle changes have increased people’s vulnerability to lifestyle diseases, with obese and diabetic patients in health care organizations increasing over time. Changing social dynamics imply that Cigna must consider the influence of social factors on people’s health across populations. As a health care provider, vulnerability to illness presents a huge investment opportunity. However, social factors such as class structure, culture, attitudes, and education level must be assessed in-depth due to their high influence.

Technological Factors

Technology is a critical component of present-day’s health care, disrupting many industries globally. Adoption of health technologies such as telehealth, artificial intelligence, and robotics in health care determines Cigna’s success chances and growth potential in different countries. The current focus should be the speed of technological disruption in its target markets since fast speed may deny Cigna adequate time to cope with disruption and make profits. Other factors to consider include recent technological developments, diffusion rate, and influence on the product offering.

Environmental Factors

As part of health care organizations’ corporate social responsibility, environmental protection must be prioritized. One of the huge challenges facing Cigna is the difference in environmental and liability laws across the globe. The difference increases the chances of violation and makes adoption challenging. These laws further differ across states or cities in the same countries. For instance, Florida and Texas’ environmental liability differs, increasing chances of mishap. Before entering a new market, Cigna must assess the implication of environmental laws. Focus areas include environmental pollution, use of renewable energy, waste management guidelines, and recycling rules.

Legal Factors

An organization’s competitiveness might be affected by legal factors profoundly. Protection of local organizations usually limits the success chances of foreign organizations. Accordingly, Cigna must be aware of countries’ legal frameworks and their commitment to protect intellectual property and allow fair competition. Legal factors likely to affect Cigna’s growth potential based on where it operates include health and safety laws, discrimination laws, and data protection policies.

Internal Factors: The Micro Environment

External factors present an area where Cigna’s management is not primarily responsible for the outcomes. Unlike the macro environment with a broader focus, the micro environment highlights the organizational-level decisions, plans, and policies likely to affect Cigna’s competitiveness differently. As one of the leading firms in the health care industry, Cigna has numerous strengths to enable it to dominate the current market and expand as circumstances impose. For instance, Cigna has a successful track record founded on innovation and a strong brand portfolio. The other key strength is a strong distribution network. As critical success factors, strong brands and distribution networks allow organizations to reach the majority of their potential markets (Purcarea, 2019). However, Cigna must examine the gaps in its product range in its new strategic plan. Limited choice can allow competitors to invest and reduce Cigna’s relevance. Importantly, Cigna should consider integrating firms with different work cultures. It should be a prime guiding principle in the expansion plans.

Cigna’s growth potential will also be affected by its ability to exploit opportunities and avoid threats. One of the growth opportunities that Cigna must not overlook is increasing its market share. For instance, the Center on Budget and Policy Priorities (2021) found that customer spending in the United States has increased after many years of recession. Such a change in market dynamics presents a huge opportunity for capturing new customers. Also, new technologies in health care and e-commerce provide an opportunity for Cigna to practice differentiated pricing strategy in new markets. New trends in consumer behavior, such as lifestyle changes, can open up new markets for the organization. Despite these opportunities, Cigna must respond to several threats that can hamper its competitiveness if not addressed appropriately. For instance, the growing strength of local distributors is a critical issue that requires excellent managerial intervention. Also, the health care industry is characterized by product imitation, where counterfeits and low-quality products threaten the success of genuine products. Hence, Cigna must include new strategies for dealing with such threats. For instance, a robust marketing plan should be included in the overall strategic plan.

Key Industry Structural Features

The health care industry is highly dynamic and requires an organization to plan and adapt appropriately. Regarding the structure, a common feature determining the forces governing competition is the interplay between demand and supply. On one end, a health care organization offers different services whose demand varies depending on the target population. On the other end, the target populations differ in demographics, health care needs, and spending power. Attitudes, social values, and preferences also determine people’s demand for health care services (Kruk et al., 2018). Mostly, organizations that target the right markets and apply effective strategies of maintaining a healthy patient-provider relationship remain competitive.

The other key industry’s structural feature determining the forces governing competition is the extended rivalry. From a business perspective, extended rivalry refers to customers, suppliers, substitutes (options), and potential entrants. Each market segment has different suppliers and customers. Substitute products also differ across regions. In response, governments and states implement different policies to regulate competition, protect populations, and promote organizational growth. The influence of potential entrants depends on the political, social, and legal climate in a particular country. Individually or jointly, the industry’s structural features have affected Cigna’s approach to care varyingly.

In conclusion, a directional strategy keeps a health care organization focused as strategically as possible. Such a strategy gives an organization a sense of purpose as it works towards achieving its goals. This discussion has analyzed the external and internal factors affecting Cigna’s competitiveness. The external influence is massive since political, economic, social, technological, environmental, and legal factors affect competition. Internally, management-level decisions and planning are the most influential as far as strategizing, effective resource utilization, relevance in the market, and overall competitiveness are concerned. Generally, the environmental analysis provides a blueprint for guiding Cigna’s strategic planning.

References

Budreviciute, A., Damiati, S., Sabir, D. K., Onder, K., Schuller-Goetzburg, P., Plakys, G., … & Kodzius, R. (2020). Management and prevention strategies for non-communicable diseases (NCDs) and their risk factors. Frontiers in Public Health, 8, 788. https://doi.org/10.3389/fpubh.2020.574111

Center on Budget and Policy Priorities. (2021). Chart book: Tracking the post-great recession economy. https://www.cbpp.org/research/economy/tracking-the-post-great-recession-economy
Daly, R. (2020). Cigna’s 2021 strategies highlight MA trends and the resulting effects on providers. Healthcare Financial Management Association. https://www.hfma.org/topics/news/2020/10/cigna-s-2021-strategies-highlight-ma-trends-and-the-resulting-ef.html
Fulmer, T., Reuben, D. B., Auerbach, J., Fick, D. M., Galambos, C., & Johnson, K. S. (2021). Actualizing Better Health And Health Care For Older Adults: Commentary describes six vital directions to improve the care and quality of life for all older Americans. Health Affairs, 40(2), 219-225. https://doi.org/10.1377/hlthaff.2020.01470

Ginter, P. M., Duncan, W. J., & Swayne, L. E. (2018). The strategic management of health care organizations. John Wiley & Sons.

Kruk, M. E., Gage, A. D., Arsenault, C., Jordan, K., Leslie, H. H., Roder-DeWan, S., … & Pate, M. (2018). High-quality health systems in the Sustainable Development Goals era: Time for a revolution. The Lancet Global Health, 6(11), e1196-e1252. https://doi.org/10.1016/S2214-109X(18)30386-3

Liu, Y., Lee, J. M., & Lee, C. (2020). The challenges and opportunities of a global health crisis: the management and business implications of COVID-19 from an Asian perspective. Asian Business & Management, 1(19):277–297. https://doi.org/10.1057/s41291-020-00119-x

McInnes, C., Lee, K., & Youde, J. (Eds.). (2019). The Oxford handbook of global health politics. Oxford University Press.

Purcarea, V. L. (2019). The impact of marketing strategies in healthcare systems. Journal of Medicine and Life, 12(2), 93–96. https://doi.org/10.25122/jml-2019-1003

Rapfogel, N., & Gee, E. (2021). Estimates of uninsured adults in the Medicaid coverage gap by congressional district. Center for American Progress. https://www.americanprogress.org/issues/healthcare/news/2021/08/25/503070/estimates-uninsured-adults-medicaid-coverage-gap-congressional-district/

Prepare a 5-7 page environmental analysis of a health care organization addressing both the external and internal environments.

Introduction

Note: Each assessment in this course builds upon the work you have completed in previous assessments. Therefore, you must complete the assessments in the order in which they are presented.

Health care organizations have embraced strategic management and have developed unique processes for their industry. Health care leaders have found that strategic thinking, planning, and managing strategic momentum are essential for coping with the health care industry’s dynamics. Strategic management has become the single clearest demonstration of effective leadership in health care organizations.

Health care organization leaders need to understand the external environment in which they operate. Additionally, they need to anticipate and respond to the significant shifts taking place within that environment. An organization engages in service area competitor analysis to:

Determine the geographic service area.
Analyze the competitors within that service area for strengths and vulnerabilities.
Assess the impact of its strategic actions against specific competitors.
Anticipate potential actions a competitor might make that would endanger the organization’s market position.

Analyzing competitors assists organizations in identifying their competitive advantage, the basis on which they are willing to compete with anyone.

Additionally, evaluating the organization’s internal environment is also critical. This requires evaluating functional areas such as clinical operations, information systems, marketing, clinical support, human resources, financial administration, and others. In an internal environmental analysis, leaders carefully examine each function or organizational subsystem and then develop and analyze a list of strengths and weaknesses for each. This approach has been successful in some cases; however, an internal environmental analysis alone does not adequately address strategic issues.

The first assessment will focus on performing an environmental analysis of a health care organization. An environmental analysis enables the organization to identify current challenges and opportunities in preparation for future strategic planning and goal identification. Insightful diagnosis of a company’s external and internal environments is a prerequisite for managers to succeed in crafting a strategy that is an excellent fit within the company’s operations. These evaluations assist the organization in fostering alternative strategies and business models that culminate in leadership choosing a specific strategy.

Demonstration of Proficiency

By successfully completing this assessment, you will demonstrate your proficiency in the course competencies through the following assessment scoring guide criteria:

Competency 1: Analyze organizational structure, design, culture, and climate in relation to environmental forces.
Analyze a health care organization’s external and internal environment.
Identify key industry structural features determining the forces governing competition.
Competency 3: Recommend an organizational structure and design to optimize a strategic plan.
Evaluate a health care organization’s directional strategy.
Competency 4: Communicate in a manner that is scholarly, professional, and consistent with expectations for professionals in health care administration.
Write a clear, concise, well-organized, professional, and generally error-free environmental analysis that supports conclusions with relevant evidence.
Follow current APA formatting and style guidelines for citations and references.

Note: Complete the assessments in this course in the order in which they are presented. You will make use of this analysis in the next assessment.

Preparation

For this assessment, you will perform an environmental analysis for a health care organization. To accomplish this, you need to select a health care organization. This may be an organization where you currently work, a place where you want to work, or an organization about which you would like to learn more. You may select one from any of these sectors, or you may select a sector not listed here that directly reflects your career plans:

Long-term care.
Mid-sized facility.
Behavioral health hospital.
Large urban hospital.
Small rural hospital.
Freestanding facility.
Telehealth organization.
Government/military.
Integrated delivery network (IDN).

Make your selection carefully. If you choose your own organization, it will be easier to obtain the kind of information you need to complete the assessment. If you do not select your own organization, you might want to consider a larger health care provider (for example, Cigna, Kaiser Permanente, UnitedHealth Group, or Blue Cross Blue Shield) that publishes the organization’s directional strategy. You may also select a type of organization from the provided list, but recognize you will still be expected to gather marketing information, benchmark data, financial summaries, and other relevant information.

In addition, you may wish to review the assessment instructions and scoring guide to ensure that you understand the work you will be asked to complete.

Note: Remember that you can submit all, or a portion, of your draft analysis to Smarthinking Tutoring for feedback before you submit the final version for this assessment. If you plan to use this free service, be mindful that the turnaround time to receive feedback is 24–48 hours.

Scenario

Your manager is responsible for updating the organization’s strategic plan. She has asked you to do some of the legwork and complete an environmental analysis. This analysis will help your organization scan the external and internal environments and identify current challenges and opportunities that will enable it to prepare for the future.

Requirements

Analyze your selected organization’s external and internal environments. The MHA Program Library Guide can help direct your research. The Supplemental Resources and Research Resources, both linked in the navigation menu in your courseroom, provide additional resources to support you.

You may use any contemporary environmental analysis tool included in the strategic management planning process to conduct your analysis. Examples include PESTLE analysis, Michael Porter’s 5 Forces model, and Levels of Competition model.

Remember, your analysis must address both your selected organization’s external and internal environments. In addition, your analysis must include all of the elements listed below.

ENVIRONMENTAL ANALYSIS REQUIREMENTS

The requirements, outlined below, correspond to the grading criteria in the Current Environmental Analysis Scoring Guide, so be sure to address each point. Read the performance-level descriptions for each criterion to see how your work will be assessed.

Evaluate the organization’s directional strategy, as reflected in its vision, mission, and values.
Identify key industry structural features determining the forces governing competition.
Write a clear, concise, well-organized, professional, and generally error-free environmental analysis that supports conclusions with relevant evidence.
Follow current APA formatting and style guidelines for citations and references.
ADDITIONAL REQUIREMENTS
Length: 5–7 double-spaced, typed pages. The goal is to focus on applying new concepts and gaining new insights. Keep it brief and substantive.
Note: Feel free to construct images/diagrams, such as PESTL tables, to summarize information where appropriate and to highlight key information.
Formatting: Narrative can be written in a memo or white paper format since these are used in the health care workplace. Format citations according to current APA style and formatting guidelines, including a works cited page.
Number of sources: Use a minimum of six current, scholarly, and authoritative sources to support your analysis.
Scoring guide: Be sure to review this assessment’s scoring guide to understand how your faculty member will evaluate your work.

Proofread your document before you submit it to minimize errors that could distract readers and make it more difficult for them to focus on the substance of your analysis.

Portfolio Prompt: You may choose to save your environmental analysis to your ePortfolio.

Current Environmental Analysis Scoring Guide
CRITERIA NON-PERFORMANCE BASIC PROFICIENT DISTINGUISHED
Analyze a health care organization’s external and internal environment. Does not analyze a health care organization’s external and internal environment. Attempts to analyze a health care organization’s external and internal environment; however, omissions and/or errors exist. Analyzes a health care organization’s external and internal environment. Analyzes a health care organization’s external and internal environment, including recommendations for improvement. Analysis includes multiple specific examples and references to current, scholarly and/or authoritative sources.
Evaluate a health care organization’s directional strategy. Does not evaluate a health care organization’s directional strategy. Attempts to evaluate a health care organization’s directional strategy; however, omissions and/or errors exist. Evaluates a health care organization’s directional strategy. Evaluates a health care organization’s directional strategy, including improvement recommendations. Evaluation includes multiple specific examples and references to current, scholarly, and/or authoritative sources.
Identify key industry structural features determining the forces governing competition. Does not identify key industry structural features determining the forces governing competition. Attempts to identify key industry structural features determining the forces governing competition; however, omissions and/or errors exist. Identifies key industry structural features determining the forces governing competition. Analyzes key industry structural features determining the forces governing competition. Analysis includes multiple specific examples and references to current, scholarly, and/or authoritative sources.
Write a clear, concise, well-organized, professional, and generally error-free environmental analysis that supports conclusions with relevant evidence. Does not write a clear, concise, well-organized, professional, and generally error-free environmental analysis that supports conclusions with relevant evidence. Attempts to write a clear, concise, well-organized, professional, and generally error-free environmental analysis that supports conclusions with relevant evidence; however, lapses, omissions, and/or errors exist. Writes a clear, concise, well-organized, professional, and generally error-free environmental analysis that supports conclusions with relevant evidence. Writes a clear, concise, well-organized, professional, and error-free environmental analysis that supports conclusions with compelling and relevant evidence.
Follow current APA formatting and style guidelines for citations and references. Does not follow current APA formatting and style guidelines for citations and references. Attempts to follow current APA formatting and style guidelines for citations and references; however, omissions and/or errors exist. Follows current APA formatting and style guidelines for citations and references. Follows current APA formatting and style guidelines for citations and references without omissions and/or errors.

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