DB FPX 8710 Assessment 4 Integrating Current and Past Literature DB-FPX 8710 Strategy and Innovation: Theorizing, Crafting, Executing
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Introduction
CareLead Medical, established in 1987, operates hospitals, urgent care centers, and COVID testing facilities. The company has experienced substantial growth for many years. However, recent years have seen a decline in revenue and profits, with growth rates dropping to 1-3%, compared to the previous double-digit annual growth. This downturn has postponed global expansion plans as the company shifts its focus to its current business model.
Business Problem and Gap in Practice
Every business, regardless of its success, encounters challenges that negatively impact the company. These challenges are referred to as business problems. They often have multiple layers, and identifying the root cause is essential for developing effective solutions (Spradlin, 2014). The root cause is known as a gap in practice. By identifying and addressing this gap, companies can pave the way for greater success. Hence, it is crucial for any organization to recognize the business problem and pinpoint the gap in practice to prevent future issues.
Identified Business Problem
CareLead Medical has faced declining revenues and profits in recent years, following decades of growth. The acquisition of COVID testing and vaccination sites has been problematic due to challenges in the acquisition process stemming from a lack of knowledge. Additionally, the organization suffers from inadequate strategic planning, which has exacerbated the decline in profits. Despite past successes, the company’s poorly communicated and constructed business strategy has led to financial losses as it attempted global expansion.
Identified Gap in Process
The identified gap in the process is the lack of clear direction and consistent messaging within the executive team regarding a strategic strategy, especially concerning acquisitions. The absence of a clear understanding of the current business model and strategy has caused confusion among the executive team and other leadership members. This issue became evident with the acquisition of COVID centers, which highlighted the breakdown in leadership and strategy. While global expansion was a key focus, the acquisition process was intended to support this goal. However, the failure to execute the acquisition strategy properly resulted in financial harm and hindered the company’s overall expansion strategy. The lack of communication from leadership and a poorly constructed business model created this gap in the process.
Current Supporting Articles
Transformation of corporate strategy begins with effective communication. According to studies by the Corporate Communication International (CCI), communication approaches are shifting from traditional top-down methods to more agile techniques to adapt to change (Goodman, 2019). This article emphasizes that corporate communication is crucial for the success of a business model. In CareLead’s case, the failure to evolve their communication strategy led to team members struggling to understand the necessary steps to remain successful and expand. Properly communicating the business model and strategy, along with the implementation method, could have altered the trajectory of their expansion and acquisition efforts, leading to success rather than losses.
Research supports various theories and methods for strategy formulation; however, there is a gap in research on execution methods (de Oliveira et al., 2019). This article highlights the gap in CareLead Medical’s process, as the CEO had an outlined business model but failed to provide an execution strategy. While the acquisition of the COVID clinics was successful, the lack of an execution strategy post-acquisition led to a decline in profits and halted global expansion.
Past Supporting Articles
Business models must evolve with societal changes. Often, business models fail due to inadequate evaluation of their implementation, which hinders successful development (Batocchio et al., 2016). In CareLead’s case, the business model was not adequately communicated. Without proper communication and understanding, there can be no effective execution. The acquisition of COVID clinics, lacking a formulated and communicated business model, resulted in a rapid decrease in profits. While the focus was on global expansion, which had a detailed business model, its success depended on the effective execution of the acquisition. This article underscores the importance of a business model and outlines steps CareLead could have taken to ensure success.
Removing Personal Bias
To support and validate research, it is essential to remove personal bias from literature selection. This helps identify