Case of Mayo Clinic: Design Thinking in Health Care

STRATEGIC POSITION:

PESTEL

· Political

o Stable political system – attracts investors, trade relations with other

countries, helps to expand regionally

o Favorable tax policies: costs of doing business will not be passes on to the
consumers – allowing consumers to enjoy favorable and competitive
pricing; desirable tax policies that support business growth and
development will allow businesses to expand and thereby add to
creating economic value for the country as well.

o Competition regulation: protection of all groups and stakeholders,

maintenance of the rights and interests

· Economic

o Consumer spending trends

· Social

o Demographics: a higher portion of the younger population is beneficial for

Mayo Clinic as it will allow the company a larger consumer population
base; Mayo Clinic had employed more skilled and educated workers and
human resources; a moderate to high middle class is also important for
Mayo Clinic

o Family size and structure: for the target population, Mayo clinic faced
largely with families of nuclear style, they take into consideration the
suggestions and requests of their children, they are influenced by
marketing, store manager revenues and recommendations

o Health consciousness: an increasing portion of the population is adopting

health and wellness trends

· Technological

o Infrastructue: the country has a strong infrastructure, a high rate of

technological development and advancement; businesses are
incorporating technological up gradations; high rate of innovation across
all industries

o Internet penetration: internet, in the country, is used for personal and

social lives; most of the people uses smartphones – better to reach
consumers and for marketing and promotional strategies

o Investment in research and development

 · Environmental

o Consumers are becoming more aware – online advertising is much more

environmentally friendly than traditional

o Mayo clinic has launched specific sites for disposing off products to be
recycled

o The country has high regulations for waste management and control

o Mayo clinic contracts with suppliers and distributors in its integrated back
chain

o The country is gradually moving towards the use of renewable energy for
operations and business processes

· Legal

o Health and safety law: there are strict regulations pertaining to the health
and safety of employees at the workplace; mayo clinic has placed high
importance of the safety and health of its employees

o Employment laws

VUCA

The world is: Mayo Clinic needs to How can Mayo clinic be?:
be:

Volatile Reliable Good reputation; research and development; low

reported problems; high recommendation from
users; innovate

Uncertain Trustworthy good reputation; quality care

Complex Simple/Direct Online/phone communication, easy access

Ambiguous Clear/Understandable Brand development; Marketing communications;

public information
Porter´s Matrix:

Competitive rivalry (high)

If competition is intense then it becomes difficult for existing players such as Mayo Clinic to
earn sustainable profits.

• The products and services that the mayo clinic produces and offers are very similar to
the other numerous players (hospitals) in the market, having, in that way a high rivalry among
the competitors.

Bargaining power of buyers/customers

If the buyers have strong bargaining power, then they usually tend to drive price down thus
limiting the potential of the Mayo Clinic to earn sustainable profits.

• Is high, because there's various controlling players in the market who provide
practically identical items to the clients. Additionally, the changing cost of purchasers is
thought about to be low, that makes the high bargaining power of purchasers.

Bargaining power of suppliers

If suppliers have strong bargaining power, then they will extract higher price from the Mayo
Clinic

• The suppliers are the companies that produce the medical equipment, tests and
therapeutics, so we can say that the bargaining power of suppliers is thought to be high to
moderate.

Threat of substitutes

If the threat of substitute is high, then Mayo Clinic has to either continuously invest into R&D
or it risks losing out to disruptors in the industry.

• The risk of replacement is high in the US Mayo Clinic case. However, the investment in
innovation reduces the risk of replacement.

Threat of potential entrants

If there is strong threat of new entrants then current players will be willing to earn less profits
to reduce the threats

• The threat of new entrants in the Mayo Clinic industry in the U.S is thought to be low,
since the mayo clinic market is already composed of big controlling players, which is why the
entryway of beginners in the market would not impact the existing gamers. The market of the
Mayo Clinic is saturated, and the competition amongst the rivals is already high which is
creating various hurdles for the newbie to make their location in the market. It requires a huge
start-up expense as well as a strong research study to get in the market. High marketing
expense and the strong supply chain network has decreased the strength of the brand-new
entrants' danger in the Mayo clinic markets

C1-C4

Product Needs Competition examples

C1 similar similar Intense and expected Kaiser permanente,

Dignity health,
Atrium health

C2 similar, but with similar Intense and expected Cleveland clinic,

slightly best or worst (not in the technology penn medicine…
characteristics industry) (academics centers)

C3 different kind of Less intensive and Public hospitals,

similar very unexpected health centers

C4 different different Not intense and

unexpected

Capabilities

o Critical assets: stable financial position; good reputation

o Distinctive capabilities: history of innovation – invention of the patient medical,

physician-led organization

o Privileged relationships: number 1 ranked hospital in the world - a reliable and well-
positioned organization - easy to have privileged relationships

VRIO

o Valuable capabilities: financial resources; global and local presence;

 o Rare capabilities: position among retailers; track record of project execution; customer
community; highly trained and skilled employees

o Inimitable capabilities: customer community, distribution network (very costly to

imitate by competitors); patents (“Investigators in the Ultrasound Research Center at
Mayo Clinic have created patented and patent-pending technology advancing the use of
ultrasound in research and patient care.”)

Purpose:

Mission: “Inspiring hope and promoting health through integrated clinical practice, education
and research”

Vision: “Transforming medicine to connect and cure as the global authority in the care of
serious or complex disease”.

Values: “The needs of the patient come first.”, Respect, Integrity, Compassion, Healing,
Teamwork, Innovation, Excellence, Stewardship

Respect - treat everyone in our diverse community, including patients, their families and
colleagues, with dignity; Integrity - adhere to the highest standards of professionalism,
ethics and personal responsibility, worthy of the trust our patients place in us; Compassion
- provide the best care, treating patients and family members with sensitivity and
empathy; healing .- inspire hope and nurture the well-being of the whole person,
respecting physical, emotional and spiritual needs; teamwork - value the contributions of
all, blending the skills of individual staff members in unsurpassed collaboration; innovation
- infuse and energize the organization, enhancing the lives of those we serve, through the
creative ideas and unique talents of each employee; excellence - deliver the best
outcomes and highest quality service through the dedicated effort of every team member;
stewardship - sustain and reinvest in our mission and extended communities by wisely
managing our human, natural and material resources.

Culture

The Mayo Clinic is an integrated, multi-specialty organization — they’re known for doing
almost every type of medicine at a world class level. And the point of having lots of specialities
integrated under one roof is teamwork: Everyone is pulling the same oar. Integrating all
specialities under one umbrella and giving them a common set of incentives focuses Mayo’s
work on the needs of the patient, not the hospital or the doctor. This extreme focus on patient
needs and teamwork creates a unique environment that is not present in most healthcare
systems. Importantly, they don’t just say they focus on integrated care, they do it. Everything
is aligned in that direction. For example, as with Apple Retail stores (also known for extreme
customer focus), there are no bonuses or incentive payments for physicians — only salaries.

It’s a culture that attracts teamwork focused physicians and then executes on that promise.

SWOT

STRENGTHS:

● Successful in launching new products

 ● Diverse Product and services Portfolio which enables to target various segments in the
market at the same time.
● Strong Brand Equity and recognition
● High Margins
● Strong relationship with existing suppliers
● Quality focus
● Highly focused on research and Innovation which helps in fast discoveries of new
treatment and prevention techniques.
● Strong resources and capabilities: physical resources such as land, building, human
resources, past experiences and successes, financial resources, and activities &
processes build a sustainable competitive advantage in the marketplace. 
● Proper procedures and superiority processes
● Position of the organization
● High-quality marketing expertise
● Strong system of technology and communication – crucial role in conveying
information and information gathering
● One of the biggest academic research facilities and one of the best healthcare
organizations in terms of service delivery
● Brand-new production technology
● Strong history of innovation in care delivery
● Experienced in the personal care category 
● Strong circulation network
● Integrated Medical Record System
● Constant willingness in overcoming their capabilities
● Significant potential of attaining growth with modern technology adoption
● Research centers - provides innovative systems approach to disseminate benefits of
research discoveries in daily medical practice which generates room for new
treatments and diagnosis.

WEAKNESSES
● Inability to differentiate customers
● Inability in reaching all customers – rural areas and other states cannot be reached
● Urgent need to improve in order to align with the market trends
● Limitation of resources and capabilities
● System of delivering health care could not follow up the rapid advances in diagnosing
and treating disease
● Complex tests, treatments and procedures
● Not effective enough in some aspects
● Test-based and the need of a huge transformational change leads to uncertainty when
it comes to successful results
● Various challenges
● Brings people from different cultures to work together and if a diversity synergy is
not created it may cause any conflict inside the organization

OPPORTUNITIES

● Changing and developments in technology Landscape

● Increasing health awareness
 ● Online platforms – helps reaching out as many customers as possible and even outside
the United States
● Growing market
THREATS

● Government Regulations and Bureaucracy regarding to environmental and labor safety

aspects.
● Salary-based compensation system may increase the fixed cost of the hospital
● Lack of highly qualified medical practitioners in America
● Price wars with competitors
● Despite having a US population more health conscious, they are still not aware enough
● Potential imitation

GUIDE - STRATEGIC OBJECTIVES

Goal: Improve the ways in providing care and make the new technology, diagnostic tests and
therapeutics the most effective; Huge transformational change

Leading:

Lagging: History of innovation in care delivery

STRATEGIC CHOICES

CORPORATE STRATEGY

Ansoff Matrix: I would suggest that Mayo Clinic places itself in the Product Development since
the company seeks to expand business growth in existing markets through new products. This
involves varying degrees of related diversification, can be a expensive and high risk, may
require new strategic capabilities and typically involves project management risks.

Industry attractiveness?

· Macroeconomics context

· Sector return

· Industry growth

Internationalization?

Innovation

· Porter generic strategies

1. Cost leadership: preserve the market leadership position through

efficient value chain management; to expand the market share by
 targeting the middle class, which makes the largest proportion of overall
consumer market mix in most of the countries - Middle class consumers
generally place high importance to the pricing factor and cost leadership
is the best strategy to cater the needs of this consumer segment;

2. Differentiation: expand the customer base by emphasizing over the

unique product features; embedding the innovation and address the
consumers’ growing health concerns; Extensive experience, the oldest
brand and strong presence in all over the world are some differentiation
factors that are highlighted in the company's marketing and
communication strategies; The unique and distinctive brand logo has
established a strong brand image in consumers’ mind

3. Cost focus: the low-cost focus strategy is adopted by serving the needs of
a niche market segment at the lowest possible price. While, best value
focus strategy is adopted by emphasizing over the taste, size and design
of the product that could best match the customers’ needs and
requirements

4. Differentiation focus: revises its branding strategies and brings

continuous changes in the product designing and packaging to satisfy the
customers’ psychological expectations and maximize value for money

Value curves

· Who are the value customers? Middle class