I need replies to the following discussion posts:
Use APA format for in-text citations and the references list.
1. Competitive position of your company within its industry. An analysis of the strengths and weaknesses of your company from the point of view of the Resource Based View of the Firm model and any other strategy frameworks that provide insight into your company’s strategic competitiveness. Discuss your company’s strategy for competitive advantage (i.e. cost leader, differentiation, etc.) and your opinion about how they might change or improve this strategy.
2. Growth potential of your firm. Analyze the opportunities and threats of your firm, how your firm, based on its resources, can determine business opportunities as a result of the external environments. To do this please use the PESTEL model (politics, economics, society, technology, environment, legislation).
Student Post 1:
1. Competitive position of your company within its industry.
The strengths and weaknesses of MCF will be analyzed through the Resource Based View of the Firm model to provide insight into the company’s strategic competitiveness. Furthermore, MCF’s strategy for competitive advantage will be discussed along with recommendations on how MCF can change or improve this strategy.
MCF’s strength to gain strategic competitiveness include both its resources and capabilities. In terms of its resources, MCF has “firm-specific assets” which include reputation of the firm and brand equity (QuickMBA, n.d.). MCF won the “Finance Monthly Global Award” in 2012 (Midcap Financial, 2012, p.1). MCF is also the “nation’s leading independent commercial finance company” (Midcap Financial, 2012, p.1). This award increased brand equity for the company due to increased exposure to the customer base.
In terms of capabilities, MCF is very quick and efficient to finance and close deals at a rapid rate. This ability to lend at a faster rate compared to its competitors allow the borrowers to choose MCF over other companies.
MCF’s strategy for competitive advantage include utilizing the cost advantage. MCF is able to “deliver the same benefits as competitors but at a lower cost (QuickMBA, n.d.). Since MCF is a financial institution for mid-sized healthcare markets, MCF is able to lend and finance with lower interest rates compared to its competitors. This is a positional advantage for MCF compared to other lenders.
MCF’s weakness is primarily a lack of innovation in terms of departmental training for employees (Coman & Ronen, 2009, p. 5680). MCF specializes in healthcare finance and therefore the niche is very small. Recruiting becomes a challenge since candidates either have experience or do not within the healthcare finance sector. MCF can improve training strategies for junior or entry level employees by coordinating with HR to implement specific and cost effective protocols. By effectively managing employees, MCF will thrive within the industry.
2. Growth potential of your firm.
Opportunities and threats of MCF will be analyzed as a result of external environments using the PESTEL (politics, economics, society, technology, environment, legislation) model.
Political factors that will provide opportunities for MCF include data protection law, health and safety law, and competition regulation (Strategic Management Insight, 2013). Imposing data protection laws are beneficial for MCF since the company handles very sensitive and confidential data. Protecting them will decrease risk for the company. Health and safety laws enable Skilled Nursing Facilities (SNFs) and Hospitals to operate in a safe manner where MCF’s borrowers mitigate risks associated with paying penalties that affect the collateral. Competition regulation allows MCF to operate successfully and obtain a competitive advantage through legal means.
The tax policy in terms of rates and incentives may pose as a threat as a political factor for MCF (Strategic Management Insight, 2013). This is because increase the tax rates may result in increased interest rates which may negatively affect financing transactions for MCF.
Economic factors that will provide opportunities for MCF include credit availability and stage of the business cycle (Strategic Management Insight, 2013). With increased credit availability, MCF is able to borrower more money and use the working capital to finance and continue operations. The stage of the business cycle suggests that MCF is funding midsized healthcare markets. Hence, these markets are not at the stage of maturity. This offers MCF plenty of opportunities to grow and develop its portfolio.
The threats include interest and inflation rates (Strategic Management Insight, 2013). With If interest rates are high, MCF is unable to borrow as much. If inflation rates are high, MCF’s purchasing power decreases. Either way, the fluctuation of these rates are threats for MCF and therefore must be continually monitored.
Socio-cultural factors that will provide opportunities for MCF include attitudes toward work, leisure, career and retirement (Strategic Management Insight, 2013). MCF offers great benefit packages including 401K for retirement. These benefits are attractive enough to receive competitive applications and increase the probability of recruiting solid candidates. By doing so, MCF can establish a stable foundation of happy employees that work hard which can consequently increase profitability for the company.
A socio-cultural threat is that MCF operates as a closed system. This discourages innovation and thought leadership. In order to improve business strategies, MCF should nurture a more open system where innovative ideas are embraced by all employees.
In terms of technological factors, MCF has beneficial attributes such as having the ability to access the newest technology (Strategic Management Insight, 2013). MCF uses Okta to securely connect clouds and networks throughout the company. This enables easy access for employees to a variety of different software programs utilized by the company.
However, MCF’s IT department is very small and therefore problems that arise within the company may take longer than usual to correct. Technology incentives should be higher and MCF should expand the IT department to better meet the needs of technological change and adjustments.
Environmental factors do not have a significant impact within the company. However, MCF is actively going “green” and utilizing paperless methods to distribute and issue letters, paychecks, and other forms of correspondences.
Legislative factors that provide opportunities to the company include the employment law. The employment law ensures equal opportunity for everyone. This enables MCF to embrace diversity and different backgrounds that can offer MCF with unique experiences and knowledge that help the workflow.
Legislative factors dealing with HIPAA compliance can be a potential threat. MCF fully discloses that PHI be redacted from any and all distributions. However, there is always a risk the realm of healthcare finance where personal information can be breached and confidential information can be exposed. MCF can only do so much to regulate and ensure compliance. Nonetheless, the threat is always potentially there. Therefore, MCF must always encrypt data and go through security measures to avoid and prevent data breaches.
Coman, A., & Ronen, B. (2009). Focused SWOT: Diagnosing critical strengths and weaknesses. International Journal of Production Research, 47(20), 5677-5689. Doi:10.1080/00207540802146130
Midcap Financial. (2012, July 12). MidCap Financial Wins 2012 Independent Senior Debt Finance Firm of the Year. Retrieved from http://www.midcapfinancial.com/news/Press-release-Finance-Monthly-Award.pdf
QuickMBA. (n.d.). Competitive Advantage. Retrieved from http://www.quickmba.com/strategy/competitive-advantage/
Strategic Management Insight. (2013, February 13). PEST & PESTEL Analysis. Retrieved from https://www.strategicmanagementinsight.com/tools/pest-pestel-analysis.html
Student Post 2
Both the environmental and economic performance of my current company are positively linked and it’s safe to say that the industry growth seen in the industry controls the relationship. MES’s competitive advantage rests on a focused cost leadership, specifically economies of scale. MES does have a high level of production therefore tangible resources such as machinery and technology tools are specialized and contribute to increased economic performance. Their intangible resources such as reputation, stamp of approval from MD Governor and labor make for highly specialized areas such as recycling, compliance, waste water and geospatial/engineering services divisions (Maryland Environmental Service, n.d.), this also leads to increased economic performance of the organization.
Because MES functions as a non-profit/state entity employee benefits and 401K contributions are held with high regard and often a selling point for new employees. Keeping both operational and compensation costs low enables MES to “profit”/sustain capital and provide valued service to its customers. The current organizational make-up allows for less of a reporting hierarchy and more control being given to facility managers. To continue the focused cost leadership path, MES will need to continue reviewing their strategic plan, continue evaluating the competition (domestic/global), continue best practices as well incorporate a SWOT analysis to determine what other influences exist to better enable organizational movement and growth.
In 2016 industry growth was at 5% over the GDP of 2.5% (Environmental Business International INC. – EBJ – CCBJ, 2016). Recent research also reflects that consumers are becoming more willing to make sacrifices/change habits to address and counteract environmental issues as well as seek out companies who follow CSR initiatives (Croson & Treich, 2014). This includes purchasing from environmentally friendly businesses as well as purchasing and utilizing environmentally friendly products. These changes have a direct effect on industry standards and the competitive playing field (Grant, 2016). Industry growth can also be measured by increased amount of countries becoming environmentally conscious and putting in place sustainable options to address environmental concerns and declining resources.
The PESTEL model below depicts the external forces that present both opportunities and threats to MES.
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