AND COMPETITIVE ADVANTAGE 137 as finances, highly qualified staff, information systems, and appropriate facilities and equipment. Although not always apparent. such support systems and the value they add are critical for an effective and efficient organization. The value chain as a strategic thinking map provides the health care strategist with a frame- work for internal analysis of the organization (see Exhibit 4-2 and Exhibit 4-3) EXHIBIT 4-3 Description of Value Chain Components Value Chain component Description Service Delivery creation of value that is directly involved In ensuring access to. Activities provision of, and follow up for health care services. Service Delivery These activities create value prior to the actual delivery of health - Pre-Service care. Market/Marketing Identification of recognizable groups (segments) that make up Research the market information gathering to improve quality, how to meet consumers needs. Target Market Determination of the appropriate segment(s) to satisfy with specific health care services. Services Offered/ Dissemination of information to prospective patients and other Branding stakeholders regarding the prices, range of products, and location of available services by an identified health care organization, promotional information, brand quality relationship. Pricing Determination of the charge schedule (prices) for available services Distribution/Logistics Actions that ald patient/ customer entry into the health care delivery system, Including appointments, registration, and parking Promotion communication of information to customers concerning the health care offering, includes advertising, events (health lairs 10K sponsorships), social mediarund so on. ServiES Delivery to activities create value at- int where health care is Point of Service actually delivered to the patient. Clinical Operations Delivery of health care to patients Quality effectiveness of health care Erational processesSTRATEGIE MANAGE Organizational Value Chain Health care organizations have numerous opportunities to create value for patients and other stakeholders.' For example, efficient appointment systems, courteous doctors and nurses, "patient-friendly" billing systems, easy-to-navigate physical facilities, and the absence of bureau cratic red tape can greatly increase satisfaction." The organizational value chain is an effective means of determining how and where value may be created.6 The value chain illustrated in Exhibit 4-2 has been adapted from the value chain used in business organizations to more closely reflect the value-adding com- ponents for health care organizations. The value chain utilizes a systems perspec- ive; value may be created in the service delivery subsystem (upper portion of the value chain) and by effective use of the support activities (lower portion). Service delivery is the primary way organizations create value for the customer/patient through pre-service, point-of-service, and after-service activities. Service deliv ery activities are placed above the support activities, as they are the fundamental value creation activities, however, they are buttressed (supported) by activities that facilitate and improve service delivery. The three elements of service delivery - pre-service, point of-service, and after-service - incorporate the production or creation of the service (product) of health care and include primarily operational processes and marketing activities Organizational culture, organizational structure, and strategic resources are support activities that may add value to service delivery by ensuring an inviting and sup portive atmosphere, an effective organization, and sufficient use of resources such EXHIBIT 4-2 The Value Chain PRE SERVICE POINT OF SERVICE AFTER SERVICE Marked Marketing Research clinical Operations Follow up Quality Clinical Services Offered Branding Process Innovation Marketing Marketing Billing Follow on Clinical Marketing ORGANIZATIONAL CULTURE Shared Assumptions Shared Values Behavioral Norms ORGANIZATIONAL STRUCTURE Function Division Mauik STRATEGIC RESOURCES Human Information Technology O OEXHIBIT 4-3 (Continued) Value Chain Compa Description Service Delivery These activities create value after the patient/customer has - After-Service received the Initial health care. Follow-up Determination of additional services needed to supplement the initial health care need. Clinical Tracking of subsequent procedures and appointments. Marketing Actions that provide Information, assessment of patient/customer satisfaction, and continuous improvement in quality of care. Billing Implementation of clear, easy to understand billing procedures and documents. Follow on Facilitation of patient/customer entry Into another health care setting. Clinical Referrals to the proper clinical settings. Marketing Provision of Information concerning follow on clinical settings for further (extended) care, tracking of outcomes of care. Support Activities The activities in the value chain that are designed to ald in the efficient and effective delivery of health services. Support Activity Values, norms, artifact, and assumptions that serve as a guide for Culture behavior. Shared Assumptions The assumptions employees and oth i's share in the organization regarding all aspects of service delivery (e.g. needs of patients goals of the organization), Shared Values The guiding principles of the organization and its employees The understandings people in the organization have regarding excellence, risk taking, etc. Behavioral Norms Understandings about behavior in the organization that can create value for patients support Activity Those aspects of organization structure that are capable of Structure creating value for customers/patten Functions Con pressties of activities used by employees (s.9 gery, finance, human resources DivisionsERNAL ANALYSIS AND COM Value Chain Component Description Support Activty Value-creating financial, human, Information resources, and Strategic Resources technology necessary for the delivery of health services. Financial Financial resources required to provide the facilities, equipment, and specialized competencies demanded by the delivery of health services. Human Individuals with the specialized skills and commitment to deliver health services. Information Hardware, software, and information processing systems needed to support the delivery of health services. Technology The facilities and equipment required to provide health services Service Delivery Activities Health care organizations can create value and significant advantages over competitors in all three of the service delivery sub- systems. For example, in late summer and early fall, public health officials begin to remind citizens that it is time for immunization against influenza. Numerous methods are available for a provider to create value even before the patients arrive for their flu shot. Pre-service is a key area in the value chain where value can be cre- ated for the customer/ patient before the service is actually delivered. A provider that views administering flu shots as an effective way to build a caring, quality image might do considerable research to determine which patients need flu shots or would benefit most from having flu shots); where those patients live or work and where they might find it convenient to go forthe immunization; how much they might be willing to pay; and how they might best find out about the benefits, convenience, and affordability (promotion). In this manner the clinic develops a distinctive market orientation that is not common in public health or many pri- rate health care organizations." Once the patient arrives, point of Regarding the actual delivery of health care, there are a create value for the customer Point of service is the key area in the val he service is actually delive ered and value can be created through and marketing, Point of service value might be added if the vocal surroundings are clean and attractive there is no waiting time. courteous and information Fingering the pr Numerous public and private organizational nive print of service by Theuring the delivery of high Morton Perhaps