What is the impact of these options on “revenue”, costs, and “profits?”

To: Strategic Management Students
From: Dr. Coates
Re: Instructions for Analysis of the BSH Case
You have been hired by Mr. Sullivan to do an internal analysis of the resources and abilities of
BSH and provide a recommendation on the short and long term strategic actions for the firm. Use
the method and process from your book and detailed by Dr. Coates in your strategy course. You
need to identify and evaluate BSH’s history, mission, vision, values, governance, culture,
generic/business level strategy and determine which of these are particularly important to the
future initiatives or should be changed? Consider what are the options and develop a set of
recommendations for the BSH.
The internal analysis below includes an Internal Environment Analysis using the RBV concepts
in the Value chain with VIRO as the basis of the evaluation of the dimensions in the two
concepts. (See Exhibits for template tables to help with the analysis of the components of the
acronym VRIO, i.e., valuable, inimitable, rare, opportunity to exploit).
Deliverables
a) Develop a three – five page individual consulting memo (12-point Times Roman or
equivalent with one-inch margins). Address the memo Mr. Sullivan. The consulting memo
should summarize the analysis of the situation and provide recommendations pointing to the
exhibits to support analysis and recommendations. The memo should be accompanied
analysis and supporting data by the following:
a. Exhibit 1: Value Chain Table Analysis
b. Exhibit 2 VRIO
c. Exhibit 3: SWOT table
b) Questions to consider:
a. Using the Strengths and Weaknesses analysis, identify BSH’s current challenges and
strategy.
b. Review BSH’s history, mission, vision, values, and culture, leadership which of these
are particularly important to the future of this hospital? Why?
c. How does the payment methods impact BSH currently and in the future?
d. How has the value chain shifted and how might it shift with the options?
e. Consider options. What is the impact of these options on “revenue”, costs, and
“profits?” What is the impact on the stakeholders? (you could make a table with these
as an Exhibit)
f. Based on the above, what recommendations do you have for Mr. Sullivan as he makes
suggestions to the council?
Exhibit 1
A. VIRO/E,S for Evaluating Dimensions of Companies’ Internal Dimensions
Essentially VIRO asks four questions about each of a company’s internal dimensions. A “yes” to the questions
suggests that
 V = Valuable (i.e., to customer; helps create & maintain competitive advantage, drive profit, exploit
opportunities, and mitigate threats)?
 I = Inimitable (i.e., very difficult or expensive to imitate; difficult to “see”; usually tacit rather than
codified?
 R = Rare (perhaps unique, but certainly not very common in the industry or defined market space)?
 O/E = Firm positioned to exploit (all systems “go”?)?
B. Criteria for Sustainable Competitive Advantage and Strategic Implications
Evaluation Question: Is the resource or
capability…*
V? I? R? O/E?
Strategic Implication/
Expected Outcome
Y* N N N Competitive disadvantage
Y* Y* N N Competitive parity
Y* Y* Y* N Parity to temp comp advantage
Y* Y* Y* Y* Parity to temp comp advantage
Y* Y* Y* Y* Sustainable competitive advantage!
Answering “Yes” to each of the questions suggests that the firm has a sustainable competitive advantage.
Adapted from J. Barney, “Firm Resources a Sustained Competitive Advantage, ‘ Journal of Management 17
(1991), pp. 99-120 and TJA , p. 83
Exhibit 2 Internal Environment (Value Chain) Worksheet – Application of Porter’s Value Chain
Model
Note this form may be copied in electronic form to add lines or spaces within lines in order to include different dimensions of the firm that is being analyzed.
#1. Dimensions #2. Current
Situation
#3. Evaluation #4. Implications #5. Action/Recommendations
Internal Environment Aspects of
the Firm
Facts, Data, Information1 S2 W VIRO3 (E.g., what would happen if the firm
continues as is, i.e., no changes?)4
What does the firm need to change/do
differently?5
Support Activities6:
Infrastructure
Human Resources – systems
and talent
Procurement/Relationships
Technology- R&D
Primary Activities,:
– Inbound Logistics Supply
chain
1 Use “Facts, Data, Information” column to summarize current status of the dimension in the organization. Be sure to note the page # from which the
information was drawn.2 Use a coding system such as: +++ Very strong strength; ++ Moderate strength; + Low level strength; – Low level weakness; — Moderate weakness; — Strong
weakness3 Ask the five VIRO/E,S questions. Indicate V if valuable, I if imitable, R if rare, O or E if opportunity/positioned to exploit, and/or S for non-substitutable. Thus,
some dimensions might be indicated V only, some VI, VR, VO/E, etc. In some instances there will be VIRO/E,S, i.e., a “five star” rating.4 Use “Implications” column to summarize expectations (positive) or concerns (weaknesses esp.) regarding the issue if no changes are made. NOTE:
ULTIMATELY MUST MUST CONSIDER THE External Environment trends (i.e., from PEST and Five Forces analyses).5 Use column to think through recommendations for action. (Sustain may be an appropriate recommendation!)6
– Operations/Internal
operations
– Outbound Logistics
Distribution physical location
– Marketing & sales
– Service Post-transaction
contacts
“Margin” (i.e., profitability —
– or outcomes like efficiency,
quality, innovation and
customer responsiveness)
Note: The firm can target a level, but its
Margin/Profitability is an OUTCOME, not a
Obstetrics in Rural, Critical Access Hospitals – Bayou Side Hospital (mbahealthcase1) is a critical access hospital in a town of 8,000 people. The hospital CFO must determine a short and long-term strategic action in the face of changing demographics while also navigating the looming reforms in state and federal health care policies. The Hospital has downsized to take advantage of the current state and federal health care policies but must determine what services to provide and how its revenues will be structured in the future. The case offers the opportunity for students to undertake an analysis of the abilities of the hospital and how these relate to the value and stakeholders within the region. Your job is to analyze Bayou Side Hospital using the models from the course to identify the strengths, weaknesses, opportunities, and threats and provide a recommendation. Read the Instructions for the case write-up.