1.Assess the current strategy of HCOS toward its most critical market (mid-sized physician office).
The current strategy of HCOS towards mid-sized physician’s offices is to increase their market share and profits by expanding the operation to the point that HCOS is nearly everywhere that there are mid-sized physician’s offices. This “increased market share by expansion” approach has worked for the most part. They have expanded operations to cover almost all main cities in the United States and thereby acquired a considerable portion of the market share in the third- party (small to mid-sized) physician’s office management industry.
The pillars of HCOS’s approach to acquiring and retaining clients are to deliver superior customer service along with a high quality of products and services. This was a good strategy in part. The expansion strategy has worked by enabling HCOS to gain more customers. However, HCOS has recently noticed slowed growth and the loss of new business at an increasing rate. Their competitors are winning contracts over them. Their client’s feedback is that their once superior levels of customer service (competitive edge) have declined.
2.Can you offer any suggestions on how HCOS can improve its relationships with existing customers and develop new business opportunities more effectively?
It is clear that with the expansion of their operations, HCOS has lost the high level of customer service that they were delivering to their clients when they were smaller. A couple of theories need to be examined in further detail to come to an accurate conclusion that can be acted upon. As the physician’s offices have grown they have incrementally required more and more from HCOS’s sales people. It is possible that the current sales force is spread too thin to cater to the increased needs of priority customers along with those of the rest of the region including new contracts.
If this is the case, one possible solution is to hire more sales people to cover the gaps. At this point, HCOS has a solid core of experienced salespeople (more expensive salary) they can deviate from the previous hiring model and hire good sales people that do not have a healthcare background (less expensive salary) which can be mentored by the existing sales force.
Another theory that needs to be examined is whether or not the experienced sales force has simply become complacent making 80k per year on average and have reduced their attention to customer service and to acquiring new contracts. If this is the case, the sales people that have become complacent need to be put on notice by hiring new salespeople and possibly reassigning existing accounts to those who earn them based on merit, such as those who acquire the most new accounts within a year or those who receive the most accolades for excellent levels of customer service from their clients.