1.0. Executive summary
Bupa refers to the British United Provident Association and it is a big British Healthcare organization which was established in 1947 by seventeen provident associations who integrated to provide healthcare services for the general public. Bupa is a leading provider of healthcare insurance and health care services in the UK. The company has operations in three continents and boasts of more than ten million clients in more than 200 countries. Being a privately owned company, Bupa works in direct contrast to the National Health services. The NHS is funded by tax-payers money and they do not require private insurance in order to gain access to them. Bupa has its own hospitals that can be accessed by people living in the UK and who have private health insurance policies or those who can meet their costs. Initially, the company provided private medical insurance but eventually expanded to provide privately run hospitals.
2.0. Marketing and Corporate Objectives
Bupa’s aim is to meet provide individuals as well as companies across the globe with a health service that is second to none. This corporate objective defines forms the basis of developing the marketing objectives that will help the company realize this goal.Many organizations and institutions aims at achieving the objective of profit maximization, Bupa Health Insurance are no exception. In order to achieve this objective, the institution has set out the marketing objectives for its insurance services. The organization aims at gaining preference for its services in the UK market and they have developed advertising and marketing programs in an attempt to acquire wide customer base (Cooper, 2000). In addition it has aimed at retaining the customers through provision of coupon on their insurance services to those who are loyal to the organization. In the case of health facilitation, it has ensured that drug-thru prescription is given to the customers, and patients are attended to without delay. Bupa marketing objective also focuses on Patient education on their health. Currently, the competitive nature of the health sector has probed many health organizations to devise ways in which they can attract more customers; health education is one of them. In order to meet this objective, the organizations have recruiting physicians who are able to handle the diverse medical conditions of the patients. It is clear that the marketing objectives undertaken by Bupa aims at realizing its corporate objective in the long run.
3.0. SWOT Analysis
SWOT analysis refers to the strengths, Weaknesses, opportunities and threats of a firm and it is a tool which is used for auditing an organization together with its environment. The SWOT analysis helps a company to focus on key issues which are then fed into the marketing objectives. Bupa is an international healthcare group that is privately held and it provides health insurance and care services to the public. The company operates and manages health care homes, clinics and hospitals and its operations are based in more than 200 nations which among them include Saudi Arabia, Hong Kong, Australia, Spain, Thailand and Malta. The company has its headquarters based in London, UK and as at 31st of December 2009, it had employed a total of 41, 898 people. During the financial year that ended in December 2009, the company recorded an increase of seventeen point two percent (17.2%) as compared to the financial year that ended in the year 2008. This significant increase in Bupa’s revenues was attributed towards a strong performance of EMEALA and the Asia Pacific segments.
SWOT Analysis for Bupa Healthcare
- Special expertise
- Geographical advantage
- Innovative service
- Cultural connectivity
- Motivation of staff
- Lack of precise marketing plan
- Service lines not differentiated
- New technology in the market
- No dominant competition
- New market segments offering improved profit
- Niche markets
- Economic shifts
- Increased competition
- Loss of competent staff
- Changes in the insurance plans
The strength and weaknesses of Bupa is considered to be the internal factors while the opportunities and threats are the external factors. In regard to the organization’s strengths Bupa healthcare, being the leading health insurance organization in the UK, has qualified staff and expertise. This has enhanced their competitive advantage over other health insurance and health care organizations. In addition, UK being a developed economy necessitates for geographical advantage due to high population and immense innovative services. As a leading healthcare, physicians and staff are well remunerated therefore they are able to perform their duties effectively with minimal supervision (Lowson. 2002).
In regard to the healthcare weaknesses, the organization has not fostered for clear marketing plan of its services and this has mitigated its chances of achieving its long run objectives in the short run. Service lines are not adequately differentiated so as the staff and the medical practitioners can easily render their services to the consumers.
The external factors that affect Bupa’s performances are the Opportunities and the Threats. The Opportunities for the organization are the new technology imminent in the UK’s economy, and there is no dominant competitor as the PPP and Legal and General and Norwich Union keeps on changing their marketing strategy thus affecting their competitiveness in the economy. In addition, Bupa has come up with new market segments for its products which aim at increasing the revenue outlay for the organization. The threats facing the organization are diverse. They include economic shifts characterized by inflation, increased competition, loss of competent staff and the changes experienced in the insurance plans.
Before embarking on any marketing process it is crucial for Bupa and any other company to consider its environment and the environmental analysis should be a process which feeds all the aspects of Bupa’s planning and it should also be continuous. Bupa’s marketing environment is comprised up of the internal environment, the microenvironment and the macro environment. The internal environment for Bupa will include their staffs which are also referred to as the internal customers, wages, finances and office technology. The staff working for Bupa Healthcare is well trained and therefore capable of offering there services to their clients in the best way possible and this therefore ensures customer satisfaction (Kotler & Gary, 2000). The health company also makes use of the highest automated office technology in its operations and therefore ensuring that good quality is achieved in the delivery of its services. Further more, the company pays its workers wages which are in line with the current rates and therefore ensuring that they are well motivated.
Bupa’s microenvironment includes its agents, external customers, suppliers, competitors and distributors who play a crucial role in ensuring that the company meets its objectives. Bupa’s external customers are located in over 200 nations located all over the world and these are people who seek the services of the company especially regarding health services. The company’s agents and distributors includes the people who supply the company with various medical supplies, machines and services which are vital for the company’s survival. The company’s major competitors include PPP and Legal and General and Norwich Union which have also cut a niche in the health market (Nagle & Holden, 2004).
The Political, Economic, socio-cultural and Technological (PEST) factors are some of the macro-environment issues that affect it. The company is sometimes politically affected especially when it wants to set new companies in other countries because the internal companies in the countries will often feel threatened by the entry of a new competitor in their home market and therefore this greatly affects their performance in some countries. The hard economic times and recession have also had an impact on the operations of company. This is because the high cost of living has made some of the products and services of the company to be too costly to the extend that some people are unable to seek the health services of the company as they initial did. A decline in the number of people seeking the services of the health company and therefore this may eventually affect the profit turnover for the company (Lowson. 2002).
The company is further faced with the challenges of operating in various countries with diverse socio-cultural backgrounds and therefore it always takes a longer period of time before a strong business base is established in such a market. These socio-cultural forces therefore greatly affect the performance of Bupa healthcare in the provision of its services to the general public. The rise of new technological forces has also made it a mandatory for Bupa to change its marketing and corporate policies so as to keep in line with the new information technology trends. These PEST factors when integrated with the micro-environmental or external factors can be classified to be Opportunities and Threats when performing a SWOT analysis for Bupa.
4.0 Target Markets
Accordingly Bupa Healthcare is focused on the home health care services, hospitals services, hospice agencies, and area agencies in order to ultimately achieve its strategic objective. In addition, the target is also on the adult care in the UK, group homes and the Nursing homes as its major target markets. As healthcare fosters for improved global health service in the economy, the organization has strategized on these target markets in terms of advertisement of the new services and promotional activities. Achieving the corporate goal of profit maximization needs to be effective in designing and selecting the target market for the service; this is what Bupa Healthcare is undertaking (Lowson. 2002).
The competitiveness in the economy has seen many organizations in this sector articulate to broad target market. As evident from the diversified nature of Bupa healthcare target market, it is clear that competition has enhanced expansion of activities and operations. The organization has advertently used market differentiation for it to effectively reach the desired target markets in the economy (Nagle & Holden, 2004). For instance, in the case of home care health services, the organization ensures that the consumers are able to acquire the healthcare services from the specialists in their homes across the various ranges of therapies. They include the discharge planning and the patient referral, aseptic and pharmacy manufacturing, delivery of confidential services and nursing services to the esteemed consumers.
Consequently corporate branding positioning for Bupa healthcare focuses on the investment and shareholders community, employees of the company, and the advisors and investors for the organization. Achieving the strategic goal needs the Bupa healthcare to foster ion its corporate reputation by ensuring that the organization is creating and understanding the enduring Bupa’s reputation. The corporate team provides services, insights and tools that will enhance the organization to build measure and manage its reputation in each of the target market (Weinstein, 2004).
5.0. Marketing Mix Strategy,
The main aspects of the recommendation of the marketing mix strategy for Bupa include coming up with a strategy that will enable the organization increase effectiveness in both products and service delivery (Kotler & Gary, 2000). This strategy will also help in integration of marketing as well as enabling methods of communication to be more effective in the process of marketing. The strategy of marketing mix is likely to bring positive outcome as it will facilitate the attainment of the set objectives for the organization. Moreover, other strategies that must be incorporated as recommendations for the success of Bupa in marketing its products include: proper strategy to determine the products and services to be offered, their price, having an integrated marketing communication as well as having a correct channel for distribution of the products and services (Blythe, 2006).
Product and services strategy involves coming up with proper strategies concerning the products and services that are to be offered (Kotler & Gary, 2000). This include product attributes that concern eths products, branding the products, methods that is to be used in the packaging of the products, types of the labels to be used in the products as well as offering the related after sales services among other product services (Nagle & Holden, 2004). Moreover, the organization must be able to offer the right products as well as services that satisfy the customers as well lead to increased profitability. This is the major role of the top management is it is involved in making major decisions affecting the performance and service delivery (Chrvala, 2001). Product strategy must be communicated effectively. This is because, it has a major influence to all the parties involved who include the customers and suppliers. Moreover, the products must comply with the changing in technology in order to compete effectively in the market and gain the market share (Nagle & Holden, 2004).
Integrated marketing communication is one of the major recommendations that the organization should use in order to get a positive marketing strategy (Kotler & Gary, 2000). In this case, IMC involves coordinating and integrating the tools, avenues, the functions available as well as resources that are available for communication. This helps to increase the impact of consumers and ensure that the cost of services and goods are available at low cost. In this case, customer relationship is well managed though the brand value through the use of communication (Nagle & Holden, 2004). Therefore, profitable relationship on both the side of customers and the organization is hence achieved. Various channels are used in communication that includes the business to business, internal communication, marketing the services and products available as well as ensuing that customers are able to get a focused channel through either direct or indirect communication. Marketing mix involves promotion of goods and services in the market. Due to advancement in technology, methods of products promotion, segmentation of customers are hence addressed though the use of several means (Croft, 2001). In this case, several forms of media are used in
Channel management involves employing a process where the organization uses marketing as an activity through involvement of the all the parties as well as motivating them. The parties are also involved in the distribution channel to the products. In this instance, the organization is able to come up with a strategy that helps the organization to come up with a coherent form of framework that helps to integrate marketing and efforts that are geared towards selling and promotion of the products (Nagle & Holden, 2004). Channel structure is important in marketing and hence it must be preserved to enable continued connection between the customers and the members of the organization. This is achieved though the improvement of the competitive market place and ensuring that marketing strategies targets to serve the uses as well as manage their efforts (Cooper, 2000).
Pricing is another strategy that Bupa must adopt in its marketing efforts. Pricing strategy involves the following; setting a fair price that is similar to that set by the other parties in the market offering the same goods and services. The services and goods must be distinctive from those of competitors. This is by setting a competitive price (Baack, 2007). Moreover, products and services should be in a position to assume the following, the elasticity of price whether low or high, cross elasticity as well as the possibility of demand to fall or rise. In this case, it is important for any given organization to use the proper strategy while deciding the price to provide in the market. This will enable the company to have some form of stability in the market concerning the price as a strategy. Methods of pricing must also be incorporated. For example cost plus is one of major method that is used in determining the price of any given commodity (Weinstein, 2004).
The organization is able to calculate the cost that is involved in the production of the products that are then added to the percentage profit (Kent, 2003). Thus the firm is able to determine the best price that the products are to be sold in the market. However, through this method, the firm may not be able to determine potential customers thus unable to increase their pool of consumers and hence it is hard to expand the market. Another pricing strategy is that of creaming (Nagle & Holden, 2004). This involves selling given product at a very high price in order to gain profit. In our case, creaming is not appropriate as customers are likely to run into other competition firms offering medical services and hence Bupa will loose the market share (Kent, 2003). Other major methods that can be employed as pricing strategy include penetration pricing that involves lowering the price of products and services in order to increase pool of customers, discrimination of process where same product is sold using different prices in diverse market segments. Premium pricing is another pricing strategy that is crucial in maintaining market share. In order to execute this strategy Bupa would need to maintain the prices of its products high in order to encourage users to have a positive perception about the product (Stokes, 2008).
Bupa cannot perform effectively without adhering to the strategies that aims at planning its market (Kent, 2003). This will include evaluation of the organization’s strengths, possible weakness, and the opportunities available in the future as well the possibility of the organization incurring some of threats in future. When these factors are evaluated, it is possible for a company to come up with a marketing strategy that will help it to perform well in future and hence make long term plans (Kent, 2003). It is recommended that a proper planning will ensure that the company is able come, up with strategies to ensure that the working environment is favourable. The analysis of the objectives helps the company to come up with the desired methods which will help to offer the best medical services as it is in a position to define its services. Thus strategy planning cannot be avoided. For example, there are external elements that are available within the environment that may be a major threat to the performance of the organization. It is recommended that the company must be able to attain the competitive advantage in order to survive and perform well in the market (Baack, 2007). The weakness of a company must be converted into strengths and opportunities well exploited.
1.0. The Strategic and Long-Term Benefits to BUPA in Undertaking Demand Forecasting Activities
Demand forecasting activities play a vital role in the process of decision making for both the suppliers and buyers of any given product. In the case of the British United Provident Association (BUPA), a lack of effective demand forecasting would have a serious impact on the entire supply chain because it would become difficult if not impossible to efficiently mobilize the rest of the supply chain to deliver health care insurance and treatment services (Lowson, 2002). Lives are at a great risk of being lost if there is no accurate and credible information regarding demand for essential health products. At the same time, when there exists a mismatch between supply and demand due to lack of sufficient demand forecasting, there is possibility that there will emerge unnecessary high prices coupled with supply shortages (Bradley, 2000).
Forecasting and planning strategies significantly affect operational excellence, customer satisfaction, service costs, workforce utilization and inventory performance of an organization (Lowson, 2002). By undertaking demand forecasting activities in order to plan for the effective and efficient use of available capacity and resources, BUPA is bound to benefit through matching service supply to the growing market demand. This is achieved through acquiring relevant information regarding new market potential which allows for efficient resource allocation to develop, produce and commercialize new products. Demand forecasting is essential to enable health systems in developing nations to develop capacity for delivering necessary standard product scales and product mix (Seifert, 2003).
Since BUPA is a service organization, it operates in environment surrounded with great uncertainty especially due to fact that many service needs are determined and driven by external events including; new product developments, customer complaints, change in geographic and political landscapes, and environmental disasters such as tsunamis among other uncertainties. Therefore, demand forecasting activities by BUPA will help reduce the effects of uncertainty through controlling labour related runaway costs for instance, as well as aligning future service demand to inventory availability (Wedel, 2000).
2.0. BUPA’s supply chain
Supply chains can be defined as a system of suppliers, retailers, manufacturers, and customers where materials normally flow down stream from suppliers to customers. Management of the supply chain involves managing a series of activities that are concerned with planning, coordinating the movement of materials from the suppliers to the consumers. For this to be achieved, material, financial, and information flows are managed as decisions are made at strategic, tactical, and operational levels across the supply chain (Simchi-Levi et al., 2003).
Supply chains are important in maintaining the provision of much needed goods and services to those that require them at any given time Dittman (2011). It is common knowledge that there are numerous risks that are associated with the movement of goods from one place to another, and therefore, the need to manage those risks in order to ensure the smooth movement of those good and services. Management of risks, therefore, ensures that customers or clients are protected while maintaining the reputation of the supplier. Indeed, reputational risk cannot be outsourced. According to Dittman (2011), supply chains are exposed to numerous risks and one of the biggest impediments to sustaining an effective supply chain is the lack of a proper process that identifies, manages and mitigates those risks.
One of the major concerns in the managing supply chain is the lack of information to guide managers in making decisions thought the supply chain. In addition, lack of effective demand forecasting is likely to have a serious impact on the entire supply chain because it would become difficult if not impossible to efficiently mobilize the rest of the supply chain to deliver health care insurance and treatment services. BUPA needs to ensure an effective combination of her organizational capabilities, enabling technologies and strategic actions so as to attain efficient operations that make good use of demand forecasting and planning tools in its effort to align future service demand with available resource and inventory capacity. This is because forecasting provides avenue to handle both the certain and uncertain situations hence enhances risk management and facilitates attainment of corporate objectives (McAvoy, 2008).
Demand forecasting being a vital component in the supply chain, can be applied in the balanced scorecard concept of performance management to demonstrate its impact to the wider day-to-day performance picture of the organization. This concept was developed by Robert Kaplan and David Norton to establish a framework for interpreting and translating an organization’s vision into specific deliverables. The primary aim of performance management is to align the activities of the organization to the corporate goals and the broader objectives. BUPA can thus enhance its operations and decision accuracy by integrating its demand forecast initiatives to make information available on demand. Success is achieved through collaboration and cohesive working among and between the various units and departments.
The activities of the supply chain of BUPA influence each other while interacting with each other to generate a comprehensive, holistic, closed–loop that is essential for the organization’s success and sustainability (McAvoy, 2008). These functions which include demand forecasting, capacity planning and service execution enables BUPA to perform reliably by facilitating a harmonious flow of activity among the otherwise discrete functions in the supply chain.
At BUPA’s organizational level, executive sponsorship lays the necessary foundation upon which a strategic focus towards adoption of forecasting and planning technology is spearheaded by the top level management of the organization which is important in promoting transparency and accountability across the entire organization. This in turn promotes the right organizational culture and behaviour and goes a long way in fostering credibility in the organization (Vermond, 2006).
For a service oriented organization like BUPA, timely and reliable information is indispensable in planning for the organization’s growth and future success (Seung-Hee, 2007). Emergency operations which are a characteristic feature of BUPA’s daily operations can not be effectively handled without timely and reliable statistics. Generally, in order to attain service excellence, BUPA will require highly suitable practice processes, enabling technologies as well as sustainable executive stewardship working together in harmony. In other words, efficient knowledge management is vital in the supply chain as it enables informed forecasting and planning which is based on previous history, present day patterns and real time occurrences including process feedback and time used hence provide for continuity (Hughes, et al., 2006).
Technology is a key component in the supply chain. A service organization like BUPA must thus endeavour to use more advanced tools and forecasting and planning technology that will allow for quick and better access to important information without struggling going through unnecessary details to retrieve the required information. This is important to save time and enhance customer satisfaction through efficient service delivery hence create a competitive advantage (Hughes, et al., 2006).
In conclusion, it must be emphasized that because of the complex and dynamic nature of today’s global economy, service organizations face growing challenges regarding the softening economy, need for frequent and continuous reporting and assessment of service trends as well as performance evaluations. This means that information is a significant component in the supply chain management of corporate health. Executives must have accurate information in order to facilitate evaluation of daily costs for them to ensure a sustainable alignment between service and corporate goals.
3.0. Bupa’s and the Lean Philosophy
Innovation is a very important process for the success of an organization. While pursuing innovation, companies face strategic choices on where to concentrate the available resources. This process is greatly associated with change and as a result posed a challenge to any management. Sarkar (2007) explain the difference between routine change and more radical change that is not programmed. According to Evangelistica (2000), circumstances that are within the normal scope of existing management practices are considered as normal change Innovation and continuous improvement require a commitment to a process of continuous learning, so as to come up with new practices in an organization. The generation of these ideas is a critical part of the process of innovation and creativity is the process that helps the generation of these ideas. The gains obtained from this process of innovation activities at BUPA have been remarkable (Miles, 2004). These online delivery services can be accessed by logging into the company’s official website.
These services enable the company to submit new scheme members by batch, online tracking of claims, and online printing of membership certificates. These services allow customers to closely follow all programs of their health care scheme when there is a need. According to Evangelistica (2000), the personnel officer of Zahid Tractor said that, “Improvements of online services and new services at BUPA Saudia have had a positive effect on the pace on registration of personnel data. Online transactions currently take a very short time.” The personnel officer added that it was worth mentioning that the new service had made it possible for the staff at BUPA to print membership certificate on their own. This would enable submission to the authorities’ in-charge in the event that one looses his or her card, or as an evidence to be submitted to a consulate to obtain a visa.
All corporate clients at BUPA are trained on how to access services of the company online. To facilitate easy reference, the company developed a user manual for its customers. This provision of online services to the customers has fastened and improved the efficiency of transacting at BUPA.
Also, networking of hospitals and clinics in various countries has been made possible through the development of the online services by BUPA. This has enabled the company to offer new and better benefits. There has been expansion of online pre-authorization links in order to cover most clinics and hospitals under BUPA network of medical providers. This process has enabled faster and instant approval of pre-authorization, thus reducing waiting time for the members. Today, 90% of all online pre-authorization handed in at BUPA agencies are processed within a quarter an hour. Dental and Optical services requests are often approved instantly.
According to Evangelistica (2000), Insurance Office Manager of Dr. Bakhsh Hospital in Jeddah, Dr. Khalib, said that the new online services had made processing of pre-authorization at BUPA in Asia to be fast and efficient. He added that the access they provide to check on benefits of members from their own system really helps to deliver services fast to their patients who are members at BUPA Asia.
Additional online services for network providers include electronic submission of invoices for medical claims, and electronic link up with BUPA agencies’ database to access the table of benefits to members and limits of coverage. The new improved online services promote efficiency and show how the company can better the business process in an environment of business to business. Innovation is one of the reasons why BUPA is the leader of the health insurance industry. This innovation has enabled the company to be proud to be the first to employ online technology to offer its clients a modern way of faster service delivery. If the new insurance regulations are fully implemented, the market for BUPA will continue to grow (Van de ven et al., 2000). This online service is part of the company’s general strategy of maintaining their place as a premium service provider.
In order to achieve the above benefits through online service delivery, the company employed the Lean philosophy by hiring consultants. These consultants observed the operation of the company and advised it where they needed to cut down inventory and how they were to re-organize the company to realize superb flow of services. The consultants also trained the company’s human resource on different Lean tools such as 5S. Through this, the workers were able to practice collective imagination. The application of Lean philosophy started by involving all the parties that were concerned and the result is that it has enabled the company to cut down time wastage through fast and efficient delivery of services, and unnecessary movements by clients in pursuit of information and documents at certain periods of times.
In conclusion, the Lean philosophy is essential for efficient performance of a company. This efficiency was measured by the amount of time that was allocated for preparation, procurement of material and information, modifications and adjustments, and correction of mistakes. The client and the client’s satisfaction was central I the lean philosophy for this company. It was essential for BUPA to continuous involve the clients in the process of implementation of the new services in order to assure that the project fulfilled the needs of the clients and ensure that time and other resources were not wasted on unnecessary activities.