Deck 12: Strategic Planning Options: Strategic Alliances

Question 1

What are the three directions (in relation to the industrial value chain) in which an organization can connect in some way (alliance, merger, acquisition) with another organization?

Answer 1

$\bullet$ Vertically (backward, upstream) - suppliers
$\bullet$ Vertically (forward, downstream) - customers
$\bullet$ Horizontally (sideways) - competitors

Question 2

This chapter reported on a survey about the objectives health leaders have for considering a merger, acquisition, or partnership with another organization. Give three of the reasons why an organization might want to enter into such a relationship.

Answer 2

$\bullet$ Improve position for population health management
$\bullet$ Improve position for care delivery efficiencies
$\bullet$ Improve clinical integration
$\bullet$ Gain care delivery cost efficiencies through scale
$\bullet$ Expand into new care delivery areas
$\bullet$ Improve or enhance clinical talent
$\bullet$ Increase market share within our geographic area
$\bullet$ Improve financial stability
$\bullet$ Improve operational cost efficiencies
$\bullet$ Improve position for payer negotiations
$\bullet$ Expand geographic coverage
$\bullet$ Improve access to operational expertise
$\bullet$ Improve access to capital

Question 3

There is a wide variety of forms that an external strategic combination can take. Identify three possibilities.

Answer 3

$\bullet$ Merger or Acquisition
$\bullet$ Joint Ventures
$\bullet$ Stock Ownership
$\bullet$ Strategic Partnerships
$\bullet$ Cooperatives
$\bullet$ Research & Development (R&D) Consortia
$\bullet$ Strategic Alliances
$\bullet$ Oligopoly
$\bullet$ Licensing

Question 4

Recommend five steps that an organization can take to improve the chances that a proposed strategic alliance will be successful.

Question 5

Provide three examples of strategic alliances unique to the health care industry.

Question 6

From the textbook, ask the students to analyze and respond to one of the case studies, Next Strategic Steps For Biotech Early-Stage Venture, and Catalyst For ACO Formation, assuming it has not been discussed in class. Allow extra time or credit for this slightly longer question.