Environment Analysis and Strategy of Blue Eagles Medical Center

Relevant Case Facts

The Blue Eagles Medical Center (BEMC) is a family-owned and managed Level 1 general

hospital along the busy EDSA Balintawak area near the NLEX Toll Exit that has been operating

for more than 40 years already. It is currently being managed by Dr. Jason Salerno and Dr. Marie

Salerno who are siblings, together with their spouses and their parents. It offers a wide array of

services such as MRI, a dialysis and endoscopy unit, an eye center, a heart station, an orthopedic

and rehabilitation center, among many others.

The BEMC is fortunate to have loyal managers and employees who treat each other and

their patients like family. Jason, the one who manages the company’s staff always encourages the

employees to voice out their ideas regarding the facility’s operations. The culture of BEMC has

mainly stayed the same but the rapid changes in the external environment are having a negative

impact on the organization’s competitive position in the market. There are governmental

regulations and new building codes that require them to spend significantly on structural

updates. This is despite the pressure of partner health maintenance organizations (HMOs) to

reduce expenses due to the proposed universal health coverage of the government.

The organization faces several problems such as poor financial performance in the

months of May to June and October to December. BEMC has taken steps to upgrade their

laboratory facilities recently but this is not enough to attract clients and keep current ones. They

deal with all these problems on top of the current pandemic which affected hospital operations

since the start of the year. The organization also faces tough competition with the new satellite

clinic of a known medical facility opening in a nearby mall. One of the major hospital chains

known for its excellent service and facilities is also considering opening a facility nearby.

However, there are also plans to demolish smaller hospitals in the area to be replaced by

condominiums. It is expected that the tenants of these condominiums would seek healthcare

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services in the form of wellness and exercise facilities. There are also plans to open a new MRT

station nearby which may make going to BEMC a more convenient experience.

The BEMC is guided by the following vision, mission, and values statements:

Vision

Drawing strength from our rich history, we will be the best, most admired, and innovative

health services institution, partnering with our customers, employees, and shareholders in

health and wellness creation.

Mission

Our mission is to create a healthcare organization that sets the standard of excellence in

the treatment of diseases and the promotion of wellness. We deliver quality healthcare in

a manner that enhances the dignity of the human person.

To our clients, we are committed to the creation of health where people receive

individualized and quality care that enables them to regain hope in a supportive, caring

environment.

To our employees, we are committed to offering an enviable internal culture and

environment that encourages and supports both professional and personal growth that

you are proud of.

To our customers, we are committed to developing partnerships with physicians,

professionals, and payers within the communities we serve through the delivery of high

quality specialty health services at affordable costs while always putting the patient first.

We will strive in all that we do to make BEMC synonymous with excellent care,

phenomenal customer service and an unparalleled commitment to our patients, staff,

physicians, and community.

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Core Value and Guiding Principles

Excellence: Strive to achieve the best in everything we do. Never stop learning and working

to improve our skills, programs and services. Provide consistent quality and safety for

patients and caregivers.

Integrity: Inspiring trust through open communications, and be consistent in doing what

we say we will do.

Service: Provide personalized, compassionate care to each person we are privileged to

serve. No matter where in the organization we work, we remember always that caring for

the individual patient and his/her family is at the heart of our mission.

Innovation: Seek new approaches in service and the delivery of care with vitality and

enthusiasm. Empower employees to act in ways consistent with the vision.

Teamwork: We recognize that we can only achieve our mission and vision by working

together. We as servant leaders, value those who work collaboratively to achieve

organizational excellence and superior patient experiences.

Wisdom: Integrating excellence with financial stewardship.

Objectives

The key objective is to formulate a business strategy that will guide BEMC in achieving a

better competitive position in the market. In order to do this, this paper must assess the internal

and external environment of the organization. The data gathered from the assessment will be

used to conduct a SWOT analysis to recommend a suitable business strategy.

Statement of the Problem

Blue Eagles Medical Center is facing numerous challenges in its internal and external

environment. These challenges are hindering the hospital from achieving its established vision

and mission. In this analysis, the main question that I intend to answer is: After a thorough

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assessment of its internal and external environment, how can BEMC improve its business

strategy in order to achieve its organizational goals?

Diagnosis and Analysis of the Case

In analyzing this case, the PESTLE analysis, the PRIMEFACT checklist, and the SWOT

analysis will be used as frameworks to assess the organization and the challenges it is facing.

PESTLE Analysis

The PESTLE Analysis will be used to assess the key features of the external environment

of BEMC (tutor2u, 2016).

Political

The political aspect of the external environment includes governmental decisions or

regulations that have an impact on the organization. In BECM’s case, this refers to the

government's plans to provide universal health coverage for all citizens. Because of this, BECM

faces pressure from their partner health maintenance organizations (HMOs) to implement cost

containment strategies or the reduction of their expenses to improve profitability (Guttman,

n.d.).

Economic

The economic factor that BEMC faces is the usual decrease in revenue during the months

of May to June and October to December. Because of this, the employees of the organization face

the pressure of maximizing revenue for a short period of time.

Social

In the social aspect, the development of expensive condominiums in the vicinity will

result in demographic changes that will potentially affect the market demand. Specifically BEMC

expects the new population to seek wellness and exercise facilities. There are also lifestyle

changes to consider with the current pandemic since people will be hesitant to leave their

homes and go to the hospital due to health and safety concerns.

Technological

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 In terms of technology, the laboratory facilities of BEMC has recently been upgraded

which resulted in more patients coming in. However, it was noted that this is not enough to

maintain a steady influx of clients.

Legal

For the legal aspect of the external environment, BEMC faces the challenge of following

the health sanitation ordinance and new building code that have recently required the

organization to undergo expensive structural updating.

Environmental

For this case, environmental factors such as ethical sourcing, tax practices, and pollution

were not discussed. This may suggest that their current operational processes and culture have

not had any significant issues in these aspects.

PRIMEFACT Checklist

In assessing the internal environment of BEMC, the PRIMEFACT checklist will be used to

identify the characteristics, strengths, and weaknesses of the organization (Strategic Planning,

2016).

People

The people working in BEMC are loyal employees, many of whom are each other’s

relatives. The whole business is managed by the Salerno family. The siblings and medical student

graduates, Jason and Marie Salerno, have been running the family business. Marie handles the

financial side of the business while Jason manages the company’s staff. Their spouses also

occupy managerial positions in BEMC. Marie’s husband manages the Marketing Department

while Jason’s wife is in the Ancillary Department. Their family-orientedness also extends to how

they treat their clients as part of their family.

Reputation

BEMC has a reputation for being a favorite healthcare provider of families for more than

two generations. The hospital is a known landmark for patients all over Quezon City and areas in

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the vicinity. It is also expected by the Salerno family to retain its reputation for being a reliable

healthcare services destination in Metro Manila.

Intellectual Property

Particular copyright, trademarks, or design rights were not mentioned in the case.

However, BEMC can capitalize on its reputation of being the family’s hospital of choice for 40

years in its corporate branding or promotional materials.

Market Information

The change in the market demand that BEMC faces is the usual decrease in revenue

during the months of May to June and October to December. They also have market information

that smaller hospitals in the area will be demolished to make way for condominiums. Thus,

influx of condominium tenants may shift the market demand to wellness and exercise facilities.

The closing down of smaller hospitals may also mean that there will be an increase in

unemployment and that there will be people looking for jobs.

Ethos

The ethos in BEMC highly values loyalty and family-orientedness. The employees are

very loyal that many of them are actually each other’s relatives. The managers of the

organization treat and refer to the patients as family. The organization structure is hierarchical

but most of the managers and employees regard each other as family. Jason holds weekly staff

meetings where employees are encouraged to voice their ideas about any aspects of the facility’s

operations. Photos of workers and customers line the walls of the managers’ office, and stories

about the facility and its people abound, including confinements of celebrity and political clients.

Finances

Investors may hesitate to establish financial partnerships with BEMC because it only has

a short amount of time to maximize its revenue before it faces poor financial performance for

five months every year. However, BEMC has been operating for 40 years with a well-established

reputation among multiple generations. Even though the organization is currently facing several

challenges, especially in its external environment, investors may consider that it lasted this long

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because it is a profitable venture. It already has an established market of families who depend

on BEMC for their medical services. Therefore, investors may look beyond the current financial

performance of the organization and see the potential financial gain in the future.

It is also in BECM’s core values and principles to integrate excellence with financial

stewardship or the care, conservancy, planning, attention, upkeep, and management of financial

resources (Bonser, 2014).

Agility

In terms of agility or ability of an organization to adapt according to the changing needs

of clients in the market, BEMC has room for improvement. The internal environment of the

organization has remained mostly unchanged for the past 40 years. They may have heavily

relied on consistency in their operations and their reputation. This can be counterproductive for

the organization because they are not able to operate and provide services according to the

rapidly changing external environment, such as regarding the needs of their potential

customers. This may result in clients going to other healthcare providers instead. Hence, without

agility, BEMC may lose revenue in the long-run.

Collaborators

Existing or planned collaborations of BEMC were not mentioned but there is an

opportunity to do so if they choose to respond to the market demand for wellness and exercise

facilities. For example, their existing orthopaedic and rehabilitation center may collaborate with

gym companies to design the wellness programs the clients are seeking.

Talents

The skill and quality of service that the employees of the company develops may need

further training and development. This may be a contributing factor to their poor financial

performance. Having well-trained healthcare professionals and staff may also give them a

competitive advantage over other healthcare facilities.

SWOT Analysis

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 In this analysis, the internal factors or the relative strengths and weaknesses of BEMC,

together with the external factors, or the opportunities and threats they face, will be discussed.

Figure 1. BEMC strengths and weaknesses

Figure 2. BEMC opportunities and threats

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Strengths

BEMC has a reputation for being a reliable healthcare provider to multiple generations

of families in Metro Manila. The facility offers a wide array of services, making them a

“one-stop-shop” for the clients’ medical needs. The facility is a known landmark and is located

along a busy area where they are easily visible to their existing and potential clients.

The employees are hardworking and very loyal to the company. The culture in the

organization is also highly family-oriented. This is expressed in the manager-employee,

employee-employee, and manager-patient relationships. This type of culture may be seen as a

strength especially in collectivistic cultures such as in the Philippines where clients may be more

comfortable when regarded and cared for as family members when treated by healthcare

professionals.

Weaknesses

The highly loyal and family-oriented organizational culture may not align with the

changes of the external environment, especially when practiced to the extreme. A highly

family-oriented culture may lead to a lack of objectivity in performance management and

groupthink that will hinder employees from giving out constructive criticisms that may improve

operational processes and the competitive position of the organization in the market.

The organization also experiences poor financial performance for a huge part of the year

(May to June, October to December) which gives employees a short amount of time to

accumulate and maximize revenue.

Opportunities

The Salernos also recently learned that some of the smaller hospitals in the area are

going to be torn down to make way for the development of expensive rows of condominiums.

People who will rent the condominiums are likely to look for wellness and exercise facilities.

This is an opportunity for BEMC to collaborate with gym facilities or rehabilitation centers to

design wellness and exercise programs that the future market may look for. In expanding their

facilities to accommodate these new programs, they may also utilize the increase in job

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unemployment due to the closure of smaller hospitals. They may hire qualified displaced

workers into the company if their labor demand forecasts show that they will need extra

manpower to implement their expansion plans.

Dr. Jason Selarno, the person managing the facility’s staff is also about to complete his

MBA studies and is looking forward to applying his knowledge to improving the management of

BEMC and hurdling the competition. There will also be a new MRT station constructed nearby

which may lead to more foot traffic and visibility for the facility. This will further improve the

accessibility of BEMC which may help it compete with the convenience of going to the new

satellite office of a popular competitor. This may also be an opportunity to improve their

promotional materials in order to maximize the foot traffic that can drive more clients their way.

Threats

The organization faces several threats such as the presence of a new satellite clinic of a

known competitor in a nearby mall. BEMC would have to compete with the new clinic’s

accessibility and convenience for clients. Another competitor that may pose a threat to the

position of BEMC in the market is a major hospital chain considering the construction of a

facility in a nearby real estate. BEMC would have to compete with this company’s reputation for

high-end accommodations, state of the art healthcare facilities, and great customer service. This

means additional competition for BEMC other than the two other ambulatory healthcare

facilities that already exist in its vicinity. Adding further to the list of threats the organization

faces is the current pandemic that has affected how BEMC has operated since the first quarter of

the year.

Recommendations

The vision established by the organization to “be the best, most admired, and innovative

health services institution” may be too vague. It is recommended for BEMC to hold a meeting

with its stakeholders to assess their vision-mission-values statements and check if the

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organization still aligns with them. Necessary changes can then be made and organizational

processes may be assessed and adjusted accordingly to reflect these changes.

Given that the high family-orientedness of the organization may compromise their

objectivity in assessing their internal environment, it may be recommended for BEMC to hire an

expert or outside organization to conduct the assessment. Since BEMC appears to have

problems responding to the external environment, they may be more proactive by conducting

analysis on the current and potential needs of the market. For example, they may conduct

surveys on what exactly the condominium tenants are seeking for in their wellness and exercise

facilities. They may then adjust their services accordingly before any of their competitors. They

may also identify which organizations may be most advantageous for the company to

collaborate with.

It is also important to identify the factors contributing to the poor financial performance

of the organization during certain months so that these may be addressed. If the problem has to

do with the quality of the skills, programs, and services they offer, the company may design

appropriate training programs to help resolve issues in these aspects and align with their core

value of excellence. Training may also improve the quality of service the organization offers and

help set it apart from its competitors.

BEMC’s current workforce must also align with their organizational goals. For example,

since the organization intends to innovate by seeking new approaches in how they deliver

healthcare, these may require forecasting the labor supply they would need. Hence, they can

prepare by training current employees or recruiting qualified people to effectively carry out

those changes. In BEMC’s case, they may hire displaced workers from the smaller hospitals that

closed down.

Jason Selarno’s recently obtained MBA degree may be an opportunity to promote him to

a higher position so that he can influence a wider scope of services and people as he tries to

improve the quality of service, financial status, and the company's position in the market. Since

BEMC faces tough competition with other hospitals, the organization may also invest in their

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marketing so they can increase visibility versus their competitors. They may also make use of

the new MRT station that will be constructed nearby as a place for their promotional materials

since that area will have heavy foot traffic.

The organization may also benefit in realigning their business strategy to be more

aggressive with their online presence. Since people are heavily relying on online information

during the pandemic, the organization must ensure that they have good social media managers,

a well-designed website, and accounts in major social networking sites so that they may connect

better with the external environment. They may use online means as a cost-effective way of

distributing promotional materials and as a way to answer inquiries and collect feedback from

clients. They may also innovate on their database systems and online appointment system.

During the current health crisis, people are hesitant to leave their homes and would avoid

hospitals due to health and safety risks. Hence it is important to have an effective way of setting

up appointments online or via phone call to make the client feel more safe and to also follow

social distancing guidelines within the facility. Test results may also be provided online so that

the client has an option not to go back to the facility just to pick them up. Strategically increasing

the convenience of the processes for the clients may give the organization a competitive edge

versus other hospitals. The hospital may also invest in improving their telemedicine systems to

screen patients for consultation, especially those with minor concerns.

As these changes are being implemented, regular evaluations are necessary to assess if

these changes are contributing positively to meeting the established organization goals. BEMC

can then adjust its business strategies according to the results.

Conclusion

The case of BEMC shows the importance of analyzing both the internal and external

environment of the company to reach organizational success. BEMC appears to have neglected

the changes in its external environment and hence was not able to respond appropriately to the

market’s demands. The internal and external environment of the company are interrelated and

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issues in one aspect may also affect the other aspect, and ultimately, the entire organization.

Hence, the organization must analyze its external environment and continually assess what may

be improved in its internal environment so they can adjust accordingly and meet organizational

and market demands.

References

Bonser, L. (2014, May 16). What is Financial Stewardship? LaurieBonser.

https://www.lauriebonser.com/2014/05/16/what-is-financial-stewardship/#:~:text='P

ersonal%20financial%20stewardship%20represents%20the,waste%20as%20antonym

s%20of%20stewardship.

Guttman, D. What Are Cost Containment Strategies? First Stop Health.

https://www.fshealth.com/blog/what-are-cost-containment-strategies-plus-3-solutions

-for-your-clients.

Pestle (Pest) Analysis Explained. (2016).

https://www.youtube.com/watch?v=sP2sDw5waEU&feature=youtu.be&ab_channel=tut

or2u.

Strategic Planning: Internal Analysis an Online course with David Parrish. (2016). YouTube.

https://www.youtube.com/watch?v=bJVtaFWyr-Y&feature=youtu.be&ab_channel=EU-Ea

sternPartnershipCultureandCreativityProgramme.

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