BUPA and NHS are organizations that have been involved in the provision of health care in United Kingdom and other countries. BUPA provides private health services while the NHS provides services that vary from one hospital to the other. According to the research carried out, BUPA services are more advanced as compared to those provided by the NHS. However, BUPA assists NHS in the provision of services as a way of promoting service quality and optimal health care.
There is need to respond to the high disease rates by investigating management practices that are likely to promote effective health care. An organization should be well equipped in terms of resources, labor, skills, techniques and equipments that are required to attend to the needs of patients. To understand the quality of services between the two organizations better, research was done to find out the differences between service qualities provided by the two organizations. The research paper explains the micro environmental and micro environmental factors that have and would critically influence the key marketing and service strategy decisions in BUPA. Market segmentation in BUPA has also been discussed.
Part A: Question (Answer both questions 1 and 2 below).
Characteristics of service quality that is evident within the context of the NHS and BUPA
National Health Service (NHS) is a publicly funded system which provides health care in the United Kingdom. The health care system was established when Britain felt that there was need to provide health services in the country. The NHS is made up of four health care systems that are publicly funded. NHS is considered as the oldest healthcare system worldwide. The public system receives funds from various systems such as taxation. The health care system provides health care to all people who need it regardless of them being citizens.
On the other hand, BUPA is the leading international health company that provides health insurance for corporations and also individuals. BUPA was established in the year 1947 with the aim of providing more health care services than those provided by the NHS. BUPA provides health insurance and policies to different companies, organizations and individuals.
The quality of service offered is very important because it helps patients to make major decisions concerning where to go for health attention for their needs to be satisfied among other major decisions. It is, therefore, important for service providers to be keen, carry out research as a way of identifying needs that must be satisfied and thereafter provide services that are of good and high quality for them to attract customers. Smith defines service quality as the result generated by various activities at the interface between the organization and the customer and also by the organization’s internal activities in order to meet the needs of customers. The service provider concern should be to satisfy the needs of the customers and to make them remain loyal to them. According to Boraird and Loffler, the main characteristics of service quality are, tangibles, reliability, responsiveness, communication, security, understanding the customers, access, courtesy, competence and credibility.
According to the case studies, there is a wide gap between the quality of services provided by BUPA and those provided by NHS which means that the quality of services provided are totally different. BUPA’s services are advanced. The patients needed are taken care of until they have recovered their health completely. BUPA provides long term and short term health care for out-patients whose condition is stable.
Home treatment in BUPA is done as a follow-up to ensure that their patients achieve optimal health. Home treatment is also done to prevent congestion in hospitals which helps in creation of space for other patients. This is because there are times when the number of patients is too high to be accommodated. It is significant to put in mind that different patients are admitted with different health conditions which can affect the health of the other. Congestion should, therefore, be dealt with to avoid chances of cross infections. Home treatment also helps the patients to receive maximum attention until they have fully recovered. These services are not provided by the NHS. BUPA has,therefore, made an effort of working with the NHS in order to help them improve on the quality of services provided.
One of the issues BUPA is addressing is the need to reduce the waiting list for the NHS. According to the case study, it is evident that the NHS comes up with a waiting list for patients who visit to seek medical attention. This happens because they do not have adequate facilities to cater for a large number of patients. They do not also provide home health care similar to the one provided by BUPA. One of the strategies BUPA is using to reduce the waiting list is targeting the right patients. Patients should be examined properly and admitted according to their condition. It is not necessary to admit patients whose health is not that poor and leave the ones whose health is in a critical condition. BUPA is, therefore, making an effort of ensuring that the right patients are admitted and the others are released to go home.
BUPA is also focusing on is the reduction of unplanned hospital admissions in NHS hospitals. Emphasis has also been laid on the need to make priorities for future investments by the NHS. Important projects should be implemented first especially the ones that seek to improve the quality of services provided for example, equipping hospitals should be made a priority. The other issue that BUPA is addressing is the provision of more utilization beds that are efficient for the NHS. NHS has a low-bed capacity as compared to that one of BUPA, and this is a factor that contributes to creation of the waiting list. This is very dangerous especially if patients on the waiting list are on critical conditions because it limits the chances for survival.
BUPA provides a variety of choices over where the patients should receive their treatment, which does not happen at NHS. A patient is given a choice which is based on convenience, preference and comfort. This is important because it helps patients to visit hospitals which are affordable and at the same time accessible. BUPA is trying to introduce this service to the NHS. BUPA services are also different from those one that are provided by the NHS in that, it uses advanced models in the analysis of primary and secondary data. Advanced algorithms are also used on data that has been presented by NHS. This means that NHS relies on BUPA for data analysis which shows that the models used by NHS are not advanced.
BUPA’s service quality is also high in that, it works with the Foundation, for informed decisions to improve on its decision making which enables it to make decisions that are more informed. Hastie and Dawes defines decision making as a response that involved a possible course of action, formation of future expectations and evaluation of current goals and values. Decision making is very important in any organizations because it helps people to make informed choices. As a result of the partnership, BUPA has developed a websites which is assists patients in gathering information. BUPA also provides DVDs and booklets for patients that enable them to make informed decisions, which are determined by their values, beliefs and personal situations.
TQM systems within health care services
Total Quality Management (TQM) is a system that has attracted different definitions. Different companies and organizations have different definitions and applications. However, Morris (2004, p.5) defines TQM as an integrated approach to quality that works in different parts of an organization and encompasses a style of management that is aimed at achieving the long-term success of an organization by creating a link between quality and customer satisfaction. The system can, therefore,be referred to a systematic approach that assists in the planning and implementation of organization strategies that seek to improve the overall performance.
Nankervis (2005, p.24) notes that TQM advocates the careful analysis for all systems within an organization and processes with a view to their improvement and modification which is done using both the quantitative and qualitative methods. Organizations use TQM systems, techniques and principles to be in a position to enhance their operation and to achieve and seek ISO accreditation. TQM is used to provide quality services which are achieved by the improvement of systems. This is done to enable them to detect errors, problems and also adverse outcomes. According to Goldsmith TQM is directed towards building quality in the work processes and systems, for example, monitoring the outcomes of patients who have fallen ill, medications errors, infections that require isolation and complications.
TQM is a system that has been adopted by the NHS and BUPA. The system in the health care sector aims at identifying problems that affect customers, satisfying their needs, enabling them to become and remain loyal and help them to make informed decisions. This is made possible by the use of analytical tools which include check sheets that are used to monitor the health of patients, use of flow and statistical charts that are used to collect health information about different patients.
The main techniques that are used by these systems include; brainstorming which is done by different people, discussions that helps people to interact thereby making effective decisions. However, it is important to note that the use of TQM in public sectors has been limited. This is because the process involved in the integration of TQM in these sectors enhances various programs that act as mechanisms that are used in the establishment of directions which are strategic in nature for the public sector.
BUPA and NHS use TQM to achieve efficiency and to exceed standards. Evaluation of performance standards is done to provide guidelines that are considered important for the achievement of the TQM in the organizations. These guidelines include; the culture of an organization, time required carrying out and completing a task, monitoring performance and stating the roles of people in the management.
Part B Questions (Answer both questions 1 and 2 below) BUPA is the leading provider of health services and private health care services in the United Kingdom. Based on a comprehensive, contextual research of Bupa’s business and marketing environment, answer the following two questions:
The ability of an organization to understand and react to environmental forces is of vital importance to marketing success. Lancaster and Reynolds explain that the general marketing environment is composed of forces and forces that affect and at the same time influence the marketing functions. They include inter-departmental relationships also known as intra-firm environment and all other external factors also known as the macro- environment. The macro- environment consists of the marketing immediate environment which is the marketing function which is made up of ‘four Ps’. Cazner notes that the 4ps ensures that there is a smooth operation of the marketing function which leads to the intra-firm environment which is made up of other departments in an organization, for example finance, research and development departments.
Macro-environment also consists of the wider external environment which includes political, economic, sociocultural and technological factors. Internal environmental forces such as resources also affect human resource management. An organization should successfully adapt to changing environmental conditions and management needs in order to understand these factors and forces influencing such changes. This helps a company to identify possible environment trends early, determine how they might affect the future of an organization and try to come up with strategies to deal with these forces.
Macro-environment (External Environment)
Carith and Carith explain that these forces are unlikely to be uncontrolled by decision makers in an organization. External environmental forces determine and shape the way an organization works or conducts its internal affairs. The primary external forces include globalization, socio-cultural., demographic, economic competitive, intermediary and supplier, technology, political and legal forces. The external forces that are discussed in this context that is based on BUPA’s case study include globalization, technology, demographic and competitive environment.
Demographic forces are outcomes in changes in the characteristics of a population such as age, gender, ethnicity, race, marital status, sexual orientation, social class, parental status, income and educational level . Changes in demographics are often influenced by the demographic trends of an area for example, movement of employees from one place to another to the other in search of services. Social class is a demographic force that has an effect on the services provided at BUPA. This is because the services provided only favor people who have high social status.
Borgadus notes that differences in the social class can affect patients and the organization at large, for example, people in organizations go to other health facilities to seek medical attention, and this causes a change in demographic. Age and gender are demographic characteristics that have influenced marketing strategies in BUPA. This is because the patients who visit the hospitals are of different age and gender. These factors should be considered when coming up with marketing strategies because they are likely to have an impact on the operations.
Globalization is the process of societal, economic, technological or regional integration which takes through a global network of communication, trade and transport . The author further notes that, people from different societies take globalization differently. There are those who think that global forces inevitably bring people of the world together to live under universally shared standards of culture, communication, technologies, and economic and they see this as positive.
On the other hand, some people think that globalization can represent a treat to individual national cultures, identities, language and sovereignty which can be managed to survive until today. However, this may not survive the growing pressures created by the process of globalization in the future. BUPA has embraced globalization in that; it attends to patients from different parts of the world, for example, Spain, Jordan and Hong Kong among others. This means that patients and medical workers can interact in spite of their background which promotes the spirit of a global market.
Technology environment refers to the influence that the complex hardware and software used in electronic business has on planning . The author further explains that technology provides a bridge that can simplify transactions with customers in a global economy. BUPA is using technology which has greatly improved the quality of services that it provides. The advanced technology being used by BUPA has enabled the organization to serve customers in a better and faster way.
Hill and Jones notes that one of the most important impacts of technological change is that it can impact the height of barriers to entry and, therefore, radically reshape the structure of the industry. An example of the use of technology in BUPA is the use of credit cards which enables customers to receive services using the card and assure payment to vendors. Frankel (2006) points out that it is important to understand the level of technology in a certain organization because it might be helpful for the growth of an organization. Technology has promoted growth of BUPA which has also enabled it to attain a competitive advantage.
Competition has a major impact on individual and the industry wide decision making. Tribe explains that competition comprises of forces and trends affecting the availability the availability of services offered by an organization. Every business has competitors. Organizations tend to underestimate the real extent of competition and also fail to assess properly the impact of the competition on their business which has a great impact on it . BUPA has firmly established itself as a market leader. However, it is still necessary to look at what the competition has to offer. The competition in this case is other stores that offer the same range of products as BUPA. In this case, they include Allianz group, AXA among others companies.
Micro-environmental forces (Internal Environment)
Internal environmental forces are forces that are closely associated with the organization’s functions and activities taking place within the firm. It also refers to the internal situation in an organization that can affect its functioning. Burke defines internal environmental forces as all business matters that are contained within the boundaries of an organization. These forces include the formulation of goals and the determination of objectives, creation of policy, the implementation of policy, the goal outputs and some form of performance measurements of the goals. Canzer explains that the forces emerge from a variety of internal interacting forces which include the firm’s management and organizational structure, human resource information, knowledge and finance.
Jack defines resources as any input that is used by an organization in order to produce its outputs. Resources can be both tangible and intangible. Tangible resources include the number of staff, financial resources and physical resources. Members of staff in a certain organization should have the qualities and skills that are required for them to perform well and provide quality goods and services.
BUPA has over two hundred thousand medical practitioners among other staff members. Financial holdings include cash holdings, the level of debt equity, access to funds which are used for future development in an organization and the relation with the key stakeholders. Physical resources refer to the resources used for operation, encompassing premises, equipments, internal system and operation procedures. Intangible resources are resources that do not have physical form and some of them may not have any obvious monetary value but, for many organizations, they can be one of the key resources that help to create competitive advantage Thomson & Baden-Fuller 2010, P.9). BUPA has should ensured that it has adequate resources for maximum productivity.
Management and organizational structure forces
According to Hitt, Ireland and Hoskisson, management and organizational structure forces refers to an organization’s employee and formal reporting relationships, procedures, controls, authority and the decision making procedure. These forces form a descriptive definition of the nature and character of the organization and define who and what the organization is. Management and organization structure specifies the work supposed to be done, how to do the work and by who.
BUPA has a management structure that is made up of professionals who have different qualifications required for proper health care. The managers work together and make informed decisions aimed at improving the quality of services provided. Mathis and Jackson argue that an organization should come up with an effective structure to provide stability that an organization needs to implement its strategies and maintain a competitive advantage.
Financial forces include money related influences on planning. Ennew explains that an organization’s financial condition, structure and other issues related to finances play an important role in determining the available range of strategic planning possibilities, for example, the amount of funding available. BUPA has adequate resources that have enabled it to achieve its objectives. The organization has also identified better and improved ways of managing its resources. Dumas argues that improved management of financial resources for environment would also support achievement of policy objectives by ensuring that the financial resources are not wasted and that they are allocated to the highest value activity.
Competences or Capability
According to Lusthaus, Anderson and Carden, competence or capabilities are certain attributes and skills that are necessary for a company to be able to operate within a particular industry. Competence or capabilities is present in BUPA and without it; it would be difficult for the organization to operate. The level of the labor is maintained through education and experience on the job. Maintaining the skill of the labor force requires continuing investment in the education infrastructure which has been considered at BUPA. This has been achieved by organizing training and refresher courses for the employees in order to maintain competence.
BUPA’s market segments
Longenecker, Moore, Palich and Petty define market segmentation as the process of dividing the market for products and services into various groups, which have similar needs, which enables them to respond to specific marketing strategies. Market segmentation is important because it assists in the identifying and satisfying of customer needs. This is because a market that has one segment is not likely to satisfy the needs of all consumers because they have different needs hence it is considered as a waste of resources.
Market segmentation is, therefore, done to provide competition in the market which enables organizations to attain a competitive advantage. Variety of products and competition in the market place enables producers to produce goods that are of high quality which means that consumers will become loyal to them. Market segmentation also assists in the identification of different groups of consumers in the market who are likely to be targeted with a variety of products or other marketing programs.
Croft notes that the process of market segmentation brings a better understanding of consumer needs, their decision criteria and approach which gives a clearer direction to the management of the current products. As a result, there is clearer focus and return on the pricing decision, distribution of products and their advertisement. Stanton and Lemer argue that market segmentation can be done in many ways, which include by age, by condition or geographically. The authors further explain that segmentation in health care’s can be done to risk-stratify the population of patients for example based on their risks that requires admission. It can also be used to understand the complex situations of the health care sector in UK.
BUPA has been divided into three segments which are; BUPA membership division which is the largest, BUPA hospitals and BUPA international. BUPA hospitals ensure provision of healthcare facilities which are private. It is also made up of medical centers and nursing homes. On the other hand, the BUPA international is made up of a variety of international operations which are involved in activities such as issuing of insurance and healthcare in Spain, Hong Kong and Australia among other cities.
The BUPA hospitals segment and the BUPA international segment are causing a massive drain on the resources that have been put in place. The two segments are currently under expansion and development which has consumed a lot of money. Money has been allocated to the development projects to assist in the purchase of raw materials that are to be used in the construction and building various hospitals. Moreover, the projects need to be monitored closely which has led to appointment of managers to oversee the progress. BUPA is growing rapidly. However, it is receiving competition from other organizations which are having a growing market share.
Currently, BUPA operates in 36 hospitals and the number is expected to increase with time. The process of growth and development has been facilitated by the use of mergers. BUPA has an existing merger that has enhanced development. Research shows that BUPA has a high competitive position in the market place. According to the competition commission (CC), BUPA has a market share of 40% in the medical private insurance. It also has divestment plans which will enable the company to deal with overlap issues in the private medical insurance. Customers who visit BUPA have access to over two hundred thousand medical officers who include; doctors, advisors, who are concerned with response to emergencies and other conditions.
BUPA can increase can increase the target market by coming up with several strategies that target their potential customers. Market penetration can be done to identify new customers in new geographical areas. BUPA can also expand its services to other areas by opening up new hospitals that are well equipped which can be used as a strategy to reach patients who cannot access the hospitals that they currently have.
Positioning strategies can also be used to increase the number of patients who seek services at BUPA. Ferrell and Hartline argue that firms should design their marketing programs to position and enhance the image of the products offering in the minds of the target market. BUPA can use several strategies for example strengthen the current position, this can be done by monitoring the target population closely, carry out research to identify the population’s needs and to find out the perception that they have towards the services provided. BUPA should note that any complacency is likely to affect their target market leading to loss of customers. They should therefore keep on developing their services and making them to be competitive in the marketplace. BUPA should also come up with strategies that are capable of enabling it to achieve and maintain a competitive advantage such as intensive marketing strategies. Decline in the number of people who seeks their services should also be used as an indicator to determine how they are going to position their services. Repositioning strategy can be used to respond to the situation because a new position is likely to fail. BUPA can do this by making changes in any of their market mix or all of them.
Repositioning the competition is another positioning strategy that BUPA can adopt. Baladi (2011, p.219) defines repositioning as a state where an organization takes a major step that is meant to help it reinvent itself in an effort to appeal to new customers or the existing customers who have new expectations. This can be done by attacking competitors’ strengths which can be achieved by carrying out market research to identify their strong areas. Currently, customers have access to over two hundred thousand medical officers who include; doctors, advisors, who are concerned with response to emergencies and other conditions.
In conclusion, it is important for health care managers to gather information about real environment that can cause changes or affect strategies, policies and technologies. Organizations should thereafter come up with strategies that will enable them to attain and maintain a competitive advantage. These strategies should also address the needs of patients that need to be satisfied. This can be done by analyzing and anticipating trends that affect an organization’s future. This helps in the growth of an organization and also in provision of quality services.