Tenet Healthcare Corp. SWOT Analysis / Matrix

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SWOT analysis is a strategic planning tool that can be used by Tenet Healthcare Corp. managers to do a situational analysis of the company . It is a useful technique to understand the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Tenet Healthcare Corp. is facing in its current business environment.

The Tenet Healthcare Corp. is one of the leading organizatations in its industry. Tenet Healthcare Corp. maintains its prominent position in market by critically analyzing and reviewing the SWOT analysis. SWOT analysis a highly interactive process and requires effective coordination among various departments within the company such as – marketing, finance, operations, management information systems and strategic planning.

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The SWOT Analysis framework helps an organization to identify the internal strategic factors such as -strengths and weaknesses, & external strategic factors such as - opportunities and threats. It leads to a 2X2 matrix – also called SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix helps the managers of the Tenet Healthcare Corp. to develop four types of strategies:

SO (strengths-opportunities) Strategies
WO (weaknesses-opportunities) Strategies
ST (strengths-threats) Strategies
WT (weaknesses-threats) Strategies

Tenet Healthcare Corp. swot analysis / matrix

SWOT Matrix Strategies Objective

The primary purpose of SWOT matrix is to identify the strategies that a firm can use to exploit external opportunities, counter threats, and build on & protect Tenet Healthcare Corp. strengths, and eradicate its weaknesses.

Step by Step Guide to Tenet Healthcare Corp. SWOT Analysis

Strengths of Tenet Healthcare Corp. – Internal Strategic Factors

As one of the leading firms in its industry, Tenet Healthcare Corp. has numerous strengths that enable it to thrive in the market place. These strengths not only help it to protect the market share in existing markets but also help in penetrating new markets. Based on Fern Fort University extensive research – some of the strengths of Tenet Healthcare Corp. are –

Read - Tenet Healthcare Corp. Porter 5 Forces Analysis & Industry Analysis
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Good Returns on Capital Expenditure – Tenet Healthcare Corp. is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
Strong distribution network – Over the years Tenet Healthcare Corp. has built a reliable distribution network that can reach majority of its potential market.
Highly skilled workforce through successful training and learning programs. Tenet Healthcare Corp. is investing huge resources in training and development of its employees resulting in a workforce that is not only highly skilled but also motivated to achieve more.
Strong dealer community – It has built a culture among distributor & dealers where the dealers not only promote company’s products but also invest in training the sales team to explain to the customer how he/she can extract the maximum benefits out of the products.
Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
Successful track record of developing new products – product innovation.
Strong Free Cash Flow – Tenet Healthcare Corp. has strong free cash flows that provide resources in the hand of the company to expand into new projects.
Successful track record of integrating complimentary firms through mergers & acquisition. It has successfully integrated number of technology companies in the past few years to streamline its operations and to build a reliable supply chain.

Weakness of Tenet Healthcare Corp. – Internal Strategic Factors

Weakness are the areas where Tenet Healthcare Corp. can improve upon. Strategy is about making choices and weakness are the areas where an organization can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

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Limited success outside core business – Even though Tenet Healthcare Corp. is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
The profitability ratio and Net Contribution % of Tenet Healthcare Corp. are below the industry average.
The company has not being able to tackle the challenges present by the new entrants in the segment and has lost small market share in the niche categories. Tenet Healthcare Corp. has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
Not highly successful at integrating firms with different work culture. As mentioned earlier even though Tenet Healthcare Corp. is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
Investment in Research and Development is below the fastest growing players in the industry. Even though Tenet Healthcare Corp. is spending above the industry average on Research and Development, it has not been able to compete with the leading players in the industry in terms of innovation. It has come across as a mature firm looking forward to bring out products based on tested features in the market.
Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
High attrition rate in work force – compare to other organizations in the industry Tenet Healthcare Corp. has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.

Opportunities for Tenet Healthcare Corp. – External Strategic Factors

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The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Tenet Healthcare Corp. to increase its profitability.
The market development will lead to dilution of competitor’s advantage and enable Tenet Healthcare Corp. to increase its competitiveness compare to the other competitors.
The new technology provides an opportunity to Tenet Healthcare Corp. to practices differentiated pricing strategy in the new market. It will enable the firm to maintain its loyal customers with great service and lure new customers through other value oriented propositions.
Government green drive also opens an opportunity for procurement of Tenet Healthcare Corp. products by the state as well as federal government contractors.
Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Tenet Healthcare Corp..
Stable free cash flow provides opportunities to invest in adjacent product segments. With more cash in bank the company can invest in new technologies as well as in new products segments. This should open a window of opportunity for Tenet Healthcare Corp. in other product categories.
Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Tenet Healthcare Corp.’s products thus providing an opportunity to the company - either to boost its profitability or pass on the benefits to the customers to gain market share.
New environmental policies – The new opportunities will create a level playing field for all the players in the industry. It represent a great opportunity for Tenet Healthcare Corp. to drive home its advantage in new technology and gain market share in the new product category.

Threats Tenet Healthcare Corp. Facing - External Strategic Factors

New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Tenet Healthcare Corp. in those markets.
Rising raw material can pose a threat to the Tenet Healthcare Corp. profitability.
Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
As the company is operating in numerous countries it is exposed to currency fluctuations especially given the volatile political climate in number of markets across the world.
Imitation of the counterfeit and low quality product is also a threat to Tenet Healthcare Corp.’s product especially in the emerging markets and low income markets.
The demand of the highly profitable products is seasonal in nature and any unlikely event during the peak season may impact the profitability of the company in short to medium term.
Liability laws in different countries are different and Tenet Healthcare Corp. may be exposed to various liability claims given change in policies in those markets.

Limitations of SWOT Analysis for Tenet Healthcare Corp.

Although the SWOT analysis is widely used as a strategic planning tool, the analysis does have its share of limitations.

Certain capabilities or factors of an organization can be both a strength and weakness at the same time. This is one of the major limitations of SWOT analysis . For example changing environmental regulations can be both a threat to company it can also be an opportunity in a sense that it will enable the company to be on a level playing field or at advantage to competitors if it able to develop the products faster than the competitors.
SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself.
The matrix is only a starting point for a discussion on how proposed strategies could be implemented. It provided an evaluation window but not an implementation plan based on strategic competitiveness of Tenet Healthcare Corp.
SWOT is a static assessment - analysis of status quo with few prospective changes. As circumstances, capabilities, threats, and strategies change, the dynamics of a competitive environment may not be revealed in a single matrix.
SWOT analysis may lead the firm to overemphasize a single internal or external factor in formulating strategies. There are interrelationships among the key internal and external factors that SWOT does not reveal that may be important in devising strategies.

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Weighted SWOT Analysis of Tenet Healthcare Corp.

In light of the above mentioned limitations of the SWOT analysis / matrix, corporate managers decided to provide weightage to each internal strength and weakness of the firm. Organizations also assess the likelihood of events taking place in the coming future and how strong their impact could be on company's performance.

This method is called Weighted SWOT analysis. It is better than doing simplistic SWOT analysis because with Weighted SWOT Analysis Tenet Healthcare Corp. managers can focus on the most critical factors and discount the non-important one. It also solves the long list problem where organizations ends up making a long list but none of the factors deemed too critical.

Limitation of Weighted SWOT analysis of Tenet Healthcare Corp.

This approach also suffers from one major drawback - it focus on individual importance of factor rather than how they are collectively important and impact the business holistically.

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Example of Weighted SWOT Analysis

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SWOT Worksheet & Template

If you like to do your own SWOT analysis or want to make your own Weighted SWOT SWOT matrix then feel free to download Fern Fort University SWOT Analysis Template.

References / Citations & Bibliography

M. E. Porter, Competitive Strategy(New York: Free Press, 1980)
A. D. Chandler, Strategy and Structure (Cambridge, Mass.: MIT Press, 1962)
O. E. Williamson, Markets and Hierarchies(New York: Free Press, 1975);
L. Wrigley, Divisional Autonomy and Diversification (PhD, Harvard Business School, 1970)
R. E. White, Generic Business Strategies, Organizational Context and Performance: An Empirical Investigation, Strategic Management Journal7 (1986)