Cleveland Clinic: Growth Strategy 2012 Case Solution

2. Situation Analysis

Ever since its inception in 1921, Cleveland clinic has seen immense growth prospects. As a clinic, with passing of time, it has enhanced its operations. The key growth opportunities were carried out by either acquisitions or own clinics formation. Regardless of this expansion, it caters to only 50% of patients in Ohio, its central location. 3/4th of patients pertain to northeast Ohio, which represents only 25% of total northeast Ohio patients. Therefore, just by expanding in Ohio, it can potentially capture a bigger market. At the same time, its presence in Florida and other states is not that prominent. At the meantime, the distribution of international patients depict that a total of 34% patients visited from Canada and Middle East. All these 42000 international patients have to visit the central clinic facility. The fact that international patients only comprise 1% of overall patient amount makes the international growth prospects very appealing. At the same time, the ‘patient oriented’ strategy and behavior poses a risk for acquisition or partnership failure as most of the hospitals have different preferences like enhanced profitability or they target a specific patient segment. Therefore, in order for the growth strategy to go successful and useful, the strategic compatibility should also be considered. The clinic should also consider certain barriers that can prevent it from expanding. The top two barriers are the legal compliance and high cost of expansion.

3. Alternatives

The alternatives are divided into 3 parts.

In-the-state alternatives

Within the state of Ohio, Cleveland has the following options.

1. It can open new clinics in the areas that capture low supply of patients. It is feasible and requires less ‘adjustment issues’.

2. It can acquire or make partnership with the seven small health care clinics. The related cost will be immense, but the increase in market share is sure.

Out-of-state alternatives

Out of the state of Ohio, the clinic faces the following choices.

1. It can expand the capacity of the existing clinics. This option is less costly and more feasible.

2. It can open new clinics that offer different health care services than its current out-of-state clinics. Utilizing this option would require extensive cost.

International alternatives

On an international scenario, Cleveland has the following options at disposal.

1. It can expand only in Middle East and Canada as it constitutes a large portion of international patient supply. This will make sure that existing patient base is increased as the cost to patients can be decreased significantly.

2. It can expand on a selective basis by reviewing the existing international proposals.

3. It can choose to abandon the international growth prospects till a future date. This option will be disadvantageous in the perspective that the clinic needs to broaden the horizons of its patient supply base.

4. Recommendations

Considering the relevant alternatives and options, the following recommendations are being put forward.

1. Regarding in-the-state alternatives, the 2nd option is more feasible and practical. As, various small healthcare clinics are willing for mergers and partnership; therefore, there is quite a possibility that Cleveland can utilize the existing health care system and upgrade it, which will surely result in the economy of scale and scope. The retained workforce and staff physicians will be incentivized to perform better than before. This option may require a lot of cost in terms of initial outlay and further adjustment issues. The information system should be implemented which may require installation and work force training costs.