Sample Coursework Paper on Strategy Formulation for an Acute Care Hospital

Competitive Strategy

Economies make three observations about oligopoly markets, which include administration of prices, differentiated products, and rivalries behavior. Over the past years, most of the acute healthcare hospitals have focused on differentiation strategies to cope up with rivalries market (Subramanian, Kumar & Yauger, 2011). Most of the hospitals choose strategy mix on the basis of specified features estimating the realizable benefits from adoption of each policy and an insight of the competitors’ response. Numerous hospitals examine their overheads and at least one claims to be the leader by using non-direct price control along the Porter’s lines. From wider conversations, competition actions and evaluation of the available data led to the identification of various strategies defining competition basis in the acute healthcare hospitals.

Horizontal Integration

These strategies involve acquisition of hospitals providing services similar to those of the acquisition unit (Emergency and acute care services).This strategy has been used by various competitors to preempt entry by new ones. It was achieved by the use of citywide and regional integration (Subramanian, Kumar & Yauger, 2011). Currently, competitors have preserved most of the obtained assets, but the process stops because the profitable properties are acquired. It remains difficult to suggest the future outcome if external competitors could acquire rural hospitals.

Product Diversification

This happens when hospitals add new goods and services. The strategy attracts new customers, it augments the hospitals image, draw extra physicians, increase earnings, and lessen the menace of presenting partial lines of goods. New products are normally adopted when technical knowhow creates new facilities of the acute care. There is funding of new products to provide incentives for the hospitals to treat specified illness. A hospital can offer new products if one or more physicians have a sound interest to foster product development (Subramanian, Kumar & Yauger, 2011).

Product Specialization

These are strategies designed for creation of competitive advantage through offering of a special product found in specialized and general hospitals. Acute care hospitals have their products possessing the following characteristics; scarcity of physicians, high production cost, and lack of experts with limited demand. It is critical to have adequate financing to fund treatment facilities. For example, acute care hospitals may deal with seriously ill and poor patients whom the other competitors find profitable niches.

Other hospitals specialize in lucrative products that can be supplied easily. For instance, hospitals dealing with emotionally disturbed adolescents have the potential to make higher profits because there is a relative ready market and trained personnel to cope up with global competition.

Resource Based Quality Improvement

This strategy aims at improving the quality and the image of a hospital. In the hospital industry, service quality was traditionally defined in terms of the physician rather than the needs of the patient Kumar & Subramanian, 2011). To implement this strategy, hospitals should construct the office of a physician contiguous to hospitals, investment in the ultra-modern equipment and apparatus. Intensive nursing and technical training, providing adequate beds to ensure that the affiliated physicians have immediate access, and maintaining high tech in-house labs with short turnaround times is very important.

Institutional Differentiation

This strategy is used to amplify returns and draw more patients and doctors. This is achieved by affiliation of prestigious doctors with special practices, providing unique product lines and ancillary procedures, and advertisement of latest medical procedures, devices, and equipment. In addition, it creates facilities to attract locations (Kumar & Subramanian, 2011).













Kumar, K., & Subramanian, R. (2011). Porter’s Strategic Types: Differences in Internal Processes and their Impact on Performance. Journal of Applied Business Research (JABR), 14(1), 107-124.

Subramanian, R., Kumar, K., & Yauger, C. (2011). The Scanning of Task Environments in Hospitals: An Empirical Study. Journal of Applied Business Research (JABR), 10(4), 104-115.