I. Introduction 2
II. Strategy Elements 3
A. Arenas 3
B. Vehicles 4
C. Differentiators 4
D. Staging 5
E. Economic Logic 5
III. Conclusion 5
IV. Appendix A 7
V. Works Cited 8
, as well as the key questions for whether the strategy is sound.
The Premier healthcare alliance is one of the few United States companies to unite the hospital community and develop a competitive advantage on a national scale, helping to shape national policies in Washington and promote patient care. The unique company is owned on a public basis and a customer basis, traded on the NASDAC yet majorly controlled by their customer base. Since their customers own the company, the healthcare alliance refers to their customer base as members and has a unique responsibility to perform for the hospitals that purchase their products. Premier states, on a regular basis, that their strategy is to improve the healthcare in communities. They do this through two major approaches, working as two business components within the company.
Within this unique company setup are two major business units; a group purchasing organization and an information systems division. The information systems group has created several software programs for their members, including OperationsAdvisor, QualityAdvisor, SpendAdvisor and TheraDoc. A new platform model has evolved, uniting these and other products on their Premier Connect product, allowing members to take advantage of the purchased products, sharing practices and improving outcomes faster through one portal via the internet.1 Members are also encouraged to communicate directly with other member hospitals by posting questions and blogs using the Premier Connect tool.
Premier’s strategy, improving the healthcare of communities, is a specific goal that is a part of the company’s culture. This can be broken up into the five elements of Hambricks and Frederickson’s “Are you sure you have a Strategy?” Business Strategy Diamond, emphasizing how the company successfully promotes their approach to the business of improving healthcare.
II Strategy Elements
Hambrick and Fredrickson have created a five part strategy design framework; arenas, vehicles, differentiators, staging and economic logic. These integrated parts work together within effective companies on how a company can achieve their mission or objective.
Hambrick and Fredrickson state that defining the arena, or business activities, that a company will function in is the “most fundamental choices strategists make.” 2 Premier states that their activity is to improve the healthcare of communities, defining their arena as health systems, hospitals and physician practices within the United States. Expansion into foreign markets was tested in 2008 as Premier took a version of their HQID product to the UK. Soon management determined that Premier’s focus on outside markets stretched the company too much, not allowing their focus on the US markets to take precedence, and thus the project was sold. (IS THIS STRATEGY SOUND?)
Core technology Health systems and hospitals are able to take advantage of supply discounts through Premier’s group purchasing organization, allowing deep discounts on medical supplies. These facilities also have access to a wide variety of software that can help them in this ever changing US healthcare market. The diversity of software include products that can identify waste within hospitals, manage labor costs, monitor infections throughout the health system and/or hospital, provide tools for reporting to regulatory and governmental units, identify areas of quality that the hospital can improve upon, and benchmark practices with comparative facilities.
Current product category has expanded as the company moved into medical offices with their newly released Physician Focus product. New product development within this market is still in progress; however, the expansion allows physicians to take…