Radiology Supply: Weaker Supply and Advantageous Agreement

Explore both sides of this case study in order to make a decision.

The customer's perspective of having one major supplier was a strength because it could result in lower prices. You now found that your major supplier also provides the same service to your major competitor. If you were told that the 70% now becomes a weakness, and the major supplier becomes a threat, explain why a weaker supplier might offer an advantageous agreement.

Case Study Information

SWOT Analysis is a valuable tool to use in health care management situations. We must remember that SWOT can be performed from different perspectives. In this case, we evaluate a SWOT analysis done from a customer viewpoint and compare that analysis to the SWOT done from the supplying company's perspective. We see that a customer weakness or threat may be viewed as a supplier company's strength and opportunity.

An account manager for a radiology supply and technology company was seeking new business relationships in smaller markets such as small hospitals and physician clinics. Doing the needed background work, this account manager went through the effort to perform a SWOT analysis from a customer's perspective on his own expansion plans. The account manager reasoned that the small hospitals and clinics would be using a pricing strength that the radiology and technology company had in entering this new market. By capturing these market niches, the account manager could offer price cuts, reductions, and overall savings to the small hospital and physician clinics based on buying power and shared experiences.

The account manager reasoned that the small hospitals and physician clinics could potentially receive over 70% of their needed supplies from his company; thus these new customers would experience better pricing and significant cost saving. Better pricing and cost savings became an opportunity within the account manager's own SWOT analysis. This provides the account manager's company with two additional leverage points:

1. By carrying forward on the other pieces of this customer-focused SWOT analysis, the small hospitals and physician clinics' weaknesses and threats lead to opportunities in for the account manager if he performs a SWOT analysis from his own company's viewpoint.

2. Understanding the customer's strategy helps the supplier to better align their total offering in a way that adds customer value.

Overall, this case study seems like a win-win for both the supplying radiology and technology company and the small hospitals and physician clinics. However, let us consider one additional dimension. The small hospitals and physicians' perspective of their own strengths and weaknesses with regard to their suppliers may produce additional opportunities or threats inherent in the situation. We may look at the relationship between supplier and customer from the other end of the telescope. What if this radiology and technology supplier also provides supplies to a major competitor?