Major Issues in the Case
Target Systems, operated by Target Media assessed the business opportunities to expand in other related fields to Information Technology. The company is a state of paradox because the business development team had provided the company with an expansion strategy of focusing its business opportunities in providing IT services to Physicians. However, the report also instructed the company that there were many challenges associated with the particular strategy. The first major challenge was the number of competitors present in the same business line, whereas, the particular business strategy also proposed uncertainties. The company wants to evaluate the business opportunities and challenges in order to overcome those challenges through recommendations. Two recommendations are provided by the business development team. Either the company shall develop its core competencies in internal development, or they could either find a strategic partner in catering the particular market of Electronic Health Information.
Analysis
Internal Analysis
SWOT Analysis
Strengths
Target Systems had developed its core competencies in the field of IT consultancy, providing logistics, and in the project management. Since 2002, the company had earned relatively stronger competitive advantage through government projects and earned rising revenues from $4 million to $18 million in 2009. The company is in the bricks of receiving the biggest security contract due to its strong hold in the relevant field. Targets Systems always provided the clients with differentiated services and with a lower rate as compared to the market due to which it gained a competitive edge. Moreover, the company believed in honesty, quality of services provided, integrity, and loyalty. The customers would want to work with Target system of the basis of trust (Saranto, 2009).
Weaknesses
Since the year 2009, the percentage of growth in terms of revenues have gradually weakened due to the maturity in the market. The companies have weak expertise in the field of EHI which makes it dependent on the strategic alliance partner or developing its own core competency for catering the market. The company was failing to continuous improvement due to which it failed to improve the growth rate with which the company attains revenues.
Opportunities
Target Systems evaluated that there would be less amount of contracts to be received regarding managing the defense system, therefore the company has an opportunity to make its business operations diverse. Entering the EHI market proposes greater revenues than the governmental contracts for the defense system. The company had the opportunity to expand its network by targeting the individual physicians or they could target the regional health organizations to increase their growth.
Threats
If the company pursues the particular option of entering in the EHI market, then it would receive severe blow in terms of revenue generation as 90% of the company’s revenues come from the government sectors. The change in the business opportunities, the company would find a risk of putting its entire business operations in the line. The national standards had still not been developed for EHI if company wants to enter the particular market.
VRIN Model
While considering one particular strength of Target System of offering better services with competitive pricing, the company is placed at the third quadrant of achieving above competitive advantage and above average revenues for the company. The strength of the company is rare due to which it has been effectively targeting its customers. The quality of strength is not costly to imitate and it is substitutable. By applying the particular strategy, the company is placed at the third quadrant.
Congruence Model
Culture
The culture of the Target System was collaborative and information shared environment. The company focused on maintaining a friendly environment where employees are able to make contacts with the top management without any barriers. The culture also promoted a helping environment where information is shared and its flow is continuous. The company also focuses on continuous quality improvements in its service provided (Johnson & Carleen, 2010).
Structure
The structure of the organization was informal as the company had allowed their employees to engage with its top management. An organic organizational structure has been created which increases the motivation of employees and decreases the level of employee turnover rate. The satisfaction rate of employees was higher which represented increase productivity rate of the company (Johnson & Carleen, 2010).
Work
The work environment at Target System was friendly as it allowed sharing of information and close interaction with employees. The company focused on integrity, honesty, and loyalty amongst the co-workers and with its customers. The relationship between the company and its customers was developed through mutual trust and correspondence. The government trusted the company because it had previously carried out various projects with good performance (Johnson & Carleen, 2010)...................
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In the summer of 2010, members of the business objectives of the system have been carefully considering entering the electronic health information (EHI) system arena. The company was a breadth and depth of experience in providing logistics, project management and information technology (IT) services to clients in the public and private sector. Although staff target systems were experts in a full range of IT services, no one in the company had a deep knowledge of how IT applications used to manage the care of the patient or manage health care organizations. Lack of experience means that the movement of the target system to the arena EHI system will call for both companies to develop new products and services to a new set of customers - to participate in the growth of related diversification. This strategy will stand in contrast to the increase in concentration of the strategy team, used in the company's history. For the implementation of the strategy to diversify the team will have to decide whether it should provide services to regional health information organizations, hospitals or practices of individual physicians. It would also have to decide whether it will develop new opportunities by investing in the development of the internal or looking for a strategic partner who is already on the scene. Ultimately, as a team of business development opportunities weighed to the problems of making a new growth strategy in the context remains uncertain external environment will strongly influence their decision on whether the company should enter into this new arena. "Hide
by Michael J. Fratantuono, David M Sarcone Source: Richard Ivey School of Business Foundation 19 pages. Publication Date: October 29, 2012. Prod. #: W12290-PDF-ENG
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