Optimum Physiotherapy Analysis

Environmental Analysis of Optimum Physiotherapy

Name

Institutional Affiliations

Introduction

Optimum Physiotherapy entered the market in 2003 and is section of Totally Plc Group. It

services ten counties with is twenty three clinical outlets which provide physiotherapy services.

The goal is to bolster client fulfillment through the provision of tailored services to its individual

client’s needs which has made them become among the pioneer physio providers in the United

Kingdom to be granted the ISO9001:2008 in 2013 (Optimum, n.d). The organization has a

talented pool of profession physiotherapists, rehabilitation specialists and well serviced couches

to assist clients who are already injured or to prevent the injuries from happening in the first

place.

Micro Environment.

The micro-environment entails the actors which are very near the firm and which effects its

capability to function various entities such as the competitors, the suppliers and the customers.

Key Businesses

Optimum Physiotherapy runs various key business areas. They specialize on injury prevention

as their coaches design the programs for training which help prevent injuries and improve

training. If one gets injured in the garden, during some sporting activity or at work, they offer

physiotherapy. They offer sports massage which serves to complement the client’s training and

recovery. They also offer provide the seminars for the clubs which include injury prevention,

training and nutrition. Their physiotherapy comes in very handy in the restoration of the

operations and motion that might have been impacted with the ailment or the injury. They offer

shockwave physiotherapy which is efficient on the healing modality and is utilized by particularly

qualified sports physician and therapist. Their business also offer Wattbike testing which make

their clients train like cyclists and determine their correct training zones with the use of the latest

Wattbike equipment. The also offer ultrasonograpy to determine if there is a torn ligament and

acupuncture as a managerial approach to inflammation and pain. Pilates and myofascial taping

are also utilized to enhance natural healing of the body.

Customers

According to Optimum (n.d) optimum Physiotherapy regards and treat every client the way they

want. It divulges information in a responsible manner and are accountable for the results of their

decisions. They endeavor to build a socially responsible company. The company is committed

to delivering holistic customer services. It is flexible to customer preferences and hence, they

enrich their capability of becoming the best physiotherapy service provider in the region. The

company understands very well that the life time value of the patient in a physiotherapy

business is dependent on the price and the customer retention. Their customer service is based

on the promise that they will treat each customer with respect and dignity as person and never a

condition and their treatment will be effective and up to date as possible. The customer will get

involved in the process and information or questions on diagnosis will be shared to him/her

upon request.

Suppliers

As physio centers are striving to improve and control the quality of care and productivity in

overall, they need assistance from the supplier. The suppliers of Optimum Physio are coming up

with new sales techniques which are designed to foster long-lasting service-oriented affiliation

with some designated main major accounts (Buzzard 2007 p. 44). To attain global relevance,

Optimum Physiotherapy synergizes its business with suppliers by means of strategic positioning

which is meant to bring a sustainable future of being a global provide. Materials to the facilities

are delivered in bulk and kept in a store inventory. Some suppliers in the UK are actually service

providers who maintain their equipment.

Competitors

The private healthcare industry in United Kingdom has boomed and has registered a continuing

growth since the late 1990s. This is coupled with the fact that medical tourism to UK provides a

reliable source of patients and hence, the company is evolving and aligning itself to this trend.

According to Agostini et al. (2013), the main competitors to Optimum Physiotherapy include the

London Bridge Hospital, Physio, St. Mary’s University, Claren Business Center and Team

Rehab among others.

Financial communities

The financial communities refer to the individuals and the institutions who offer support to the

organization for purposes of expansion. For Optimum Physiotherapy, shareholders fund the

business and, it is worth noting that ordinary people are the majority shareholders in this case

which account for over 60% of total number of listed shareholders.

Performance

The company have been successfully run since its inception considering that it has a noticeable

bank of regular clients. The company has remained profitable and has maintained a good

reputation among its shareholders (owners) and the clients too.

External Environment Analysis

PESTEL Analysis

Political

The government of the UK is taking measures to ensure that the deterioration of the economy is

handled using a complex blend of fiscal and monetary policies. The highest earners were taxed

at 50% in a measure targeted at reviving the economy. The UK government has been deemed

to be the most successful in terms of the regulation quality, government efficiency, corruption

control and application of the rule of law (Thelen 2004). The coalition government of 2012

reduced government spending which initiated the renegotiation of large scale contracts. The

The Health Informatics Service showed interests of partnering with the private organizations.

Doctors are being put in charge in accordance with the Health and Social Bill which are the think

tanks of clinicians who provide leadership to CSOs. This implies that the political situation is

relatively stable which favors the Optimum Physiotherapy coupled with the legal framework for

enforcement of contracts and reduced level of corruption. There is no bureaucracy and

interference in the specialized health service industry by the government.

Economic

There is the issue of currency devaluation considering that the sterling dropped by a quarter

against the Euro in 2008. The UK has been having a current account deficit since 1990 and this

is worrying as it increases the external debt (Algan et al. 2010). This situation tends to reduce

the profitability of the business as the value of savings reduces. As at November 2017, the

unemployment rate of the UK rested at 4.3% which means that it has improved from the 6.5% it

had in March 2009 due to the economic slowdown. The increasing employment means more

disposable income for the company as people could afford the services. Its inflation rate rose by

3.1% and overriding the market expectations of 3%. The increase is attributed to growing

housing and service sectors. As at 2016, the GDP of UK was estimated at 2.619 trillion US

dollars with its interest rate remaining above the 2% target in 2018. This rate is anticipated to

expand the monetary supply in the system by way of bolstering the bank spending. It is

estimated that the spending on the Health Information Technology may reach 3 billion Euros

which is 12% increase from 2010. This means that the infrastructure quality might stabilize in

the specialized care due to the reduced employment rate but the business cycles could threaten

this trend. There is some efficiency in borrowing which will help expansion of the physio

business.

Social

The working population in the UK accounts for 67% of the total population whereas 17 percent

are under 14 years with 15 percent over 65 years. As the dependency ratio increases, it is very

difficult to maintain the standard of living of the dependent population considering that the

workforce is being strained. They will be handling excess burden in the future. UK boasts of a

robust education system dating back to a hundred years ago (Thelen 2004). The healthcare of

the UK is considered to be the most successful social venture globally due to the fact that public

expenditure on the health services has been always high. Despite the challenge of income

disparity, the level of income in the UK is high. However, the relative inequality has been in the

increase and the government has not met its target in ensuring that the relative poverty is

reduced. There has been an increase in the desire to provide the integrated care which implies

that the integration of the care delivery such as the efficient care scheduling, self-care and co-

ordination if care may be integral. The USA framework of the accountable care is being seen in

the UK as a potential framework but of crucial importance is how individuals would be rewarded

for their contribution to the care of the patient. The current payment-by-result system has to be

adjusted in order to acclimatize to patients being treated in the community.

Technological

According to the estimates by the UK government 50 billion Euros was made by broadcasting

and telecommunication networks back in 2006. The number of subscribers of broadband

internet connection has raised dramatically in the UK. It has one of the most advanced

telecommunication infrastructure which features an array of 50 coaxial submarine cable, 8

international switching center, several satellite earth stations, microwave radio relay systems,

buried cables and fiber-optics systems (Morgan & Efron, 2006).

Portals are very easy and solution which doesn’t require a lot of storage and can grant simple

access by the clinicians and the patients themselves. However, there is a growing need to

develop which require data storage for analytical purposes. This is required at the level of the

patient so as to provide monitoring of medication and at a group level for risk classification. This

will allow the targeting of high risk groups for purposes of preventive measures. At the

organizational level, there would be an urgent need to streamline processes and compare

performance of say, Physiotherapy Company whose relevancy can be attributed to the fact that

there are referrals in such primary care. Business Intelligence will become very instrumental as

a higher margin value proposition with other technologies such as telemedicine going

mainstream. These changes will definitely impact on the rate of technological diffusion, value

chain structure, cost and product offering.

Environmental

The government of the United Kingdom has played a key role in developing the environment

standards of Europe. It promoted the sustainability targets and strategies since 1990 which

encompasses the management structure of the ecology and environmental directives which are

integrated in other activities.

In the Green Information technology agenda which include political imperatives which cover the

management of documents are achieved electronically such as eMedlink and telemedicine.

(Shaw 2010). Outsourcing the IT function has resulted in the variation in the quality of the

systems but there is a move towards cloud computing which is meant to revolutionize the

industry. For instance, the Health Cloud for CSC may harbor the NHS it requirements for a

physiotherapy facility. This inevitably influences the attitudes towards the renewable energy and

climate change, ecological products, waste management, recycling, air and water pollution and

environmental pollution

Legal

In accordance to the laws of the UK, the maximum working hours are 48 weekly with 11 hour

rest period daily. However, those who are willing to work beyond this time utilizing the European

Working Time Directive. Legislations such as the Employment Act of 2002 and several other

legislations are against discrimination in any form of age, disability, sexual orientation, sex, race

and religion (Shaw 2010). The national minimum wage has been introduced with very generous

paternity and maternity benefits.

In the context of health, the clinical safety directive and the medical device legislation may serve

to provide some opportunity for consultancy besides impacting on solutions. This will have

impacts on the physiotherapy industry in terms of health safety, employee remuneration, and

consumer protection and discrimination law.

SWOT Analysis

Strengths

 An adequate physiotherapy service which provides which meets the national guidance

and requisite frameworks

 It has enhanced discharge planning for complex patients.

 Improved customer experience due to the seamless care between outpatient and in

patients.

 Time availability to educate the customers

 Sufficient staffing which allows physiotherapy input when needed and not when there is

a gap.

 Discharge fastened by the adequate therapy inputs

Weaknesses

 Staffing levels doesn’t fully address the desired optimal services

 Minimal availability of the physiotherapy to meet the needs of the infants

Opportunities

 Sufficient therapy staff may enable the team to become a reliable source of experts for

other units.

 Increasing the therapy staff enables the teaching which will facilitate the greater 24 hour

therapy to the infant clients

 Technological advances wields efficiency and the power of e-commerce.

Threats

 Planned future expansion which is done without securing further funding to therapy may

tend to regress and dilute service provision.

 Technological advances may lower security

Competiveness Using the Porters Five Force Model

The Porter Five Forces provides a holistic

strategy which takes the strategic decisions

away from just analyzing the current competition.

Optimum Physiotherapy doesn’t just use the

model for the design of strategic plans but also in

exploring the profitability opportunities in the

industry.

I. Threat of new entrants

New entrants in the specialized health services brings with it innovative problem solving

techniques which puts immense pressure on the Optimum Therapy by way of provision

of new value propositions to the clients and lower pricing strategies and cost reduction

(Porter 2008). The Optimum Physiotherapy has to cope with all these challenges and

come up with strategies to combat such competitive strategies.

II. Bargaining power of suppliers

Optimum Physiotherapy buys its raw materials from an array of suppliers. Suppliers

which hold some dominance can reduce the profits it can earn in the market. Suppliers

who have a lot of power in the UK healthcare can use this power to command higher

prices for their goods (Karagiannopoulos, Georgopoulos & Nikolopoulos 2005). The

overall impact of elevation of the power of the suppliers is that it reduces the profitability

of the company.

III. Buyer Bargaining Power

The company’s clients are very demanding. They always want the best offering at a

pocket-friendly price (Porter 2008). This ultimately, puts immense pressure on the

Optimum Physiotherapy profit margins ultimately. There is a small customer base which

is very powerful and have high bargaining power for its customers which gives them

some ability to seek discounts and offers.

IV. Threat of substitute services or products

Whenever an emergent service or product meets same needs of the customer in

different manners, the profitability of the industry is at stake (Karagiannopoulos,

Georgopoulos & Nikolopoulos 2005). For instance, Google drives substitute hard drives.

In the physiotherapy, the threat of substitutes is particularly high in case it is offering a

value proposition which is unique from those existing in the market.

V. Rivalry among existing competitors

Optimum Physiotherapy operates in a highly competitive specialized health service

industry. The intense rivalry among the existing players named previously has a general

effect of reduction in prices and hence, effects its long-term profitability (Porter 2008).

Challenges

I. Inadequate marketing skills

Marketing is very instrumental for the profitability and growth of the physical therapy

business. The marketing techniques of the company serves enhance the acquisition of

new clients and the retention of the existing one (Sheppard 1997). There are several

resources which Optimum Physiotherapy can utilize but it is imperative that the

management is determined to learn these skills.

II. Inadequate business skills

It is undeniable that the therapist in the company are well-trained and seasoned but this

is not the only precursor to success in this industry. Entrepreneurs maintain an excellent

business acumen so that the physio business survive and successfully grow.

III. Time Management

The owner of Optimum Physiotherapy is tasked with striking a balance between taking

care of the patients and working on the growth of their business. The management of

physical therapy can be very multi-faceted and needs focus and clarity so that one is not

pushed in some path without any significant achievement (Sheppard, 1997). The

business should block some time for attending to growth in terms of development of

marketing strategies and some other time to attend to the patients with no distraction.

The key is to prioritize.

IV. Hiring physical therapist who are reliable and competent

Optimum Physiotherapy is a growing company and hence, it faces challenges with the

recruitment owing to the fact that they would need training. A competitive pay coupled

with a benefits package can serve to address this issue, but overall, a good working

environment whereby the employee would feel very empowered and valued has the

potential of employee retention.

Conclusion and

The Optimum Physiotherapy is immersed in a UK environment which provides it with challenges

and opportunities in equal measure. This has been adequately captured under the SWOT and

PESTEL analyses. The issues which mars the industry also comes with its possibility of turning

them or addressing them. Consequently, with the analysis of the Porter Five force model for the

company, I have gained a satisfactory picture of what impacts the profitability of the organization

and came up with the following recommendations:

The Optimum Physiotherapy can tackle the threats of new entrants by

implementing various strategies. This include enhancement of its capacity and

spending money on development and research so as to define standards and

hence, cuts the window of new entrants making abnormal profits and hence

warding off new players (Grundy 2006). The company should also harness the

economies of scale and innovating new services and products which will bring

new customers.

The Optimum Physiotherapy can handle such high power using a variety of

strategies. They can alternatively ally with dedicated suppliers whose business

wholly depends on the company as Nike allied with 3

party manufacturers who

would have less bargaining power (Grundy 2006). The company can also

experiment on different product designs and materials so that in case prices

move up, the can shift to another. Finally, they can handle multiple supply chains.

In response to the high bargaining power, the Optimum Physiotherapy. The

company should invest in new products which lower the defection of existing

customers to competitors. Customers usually look for discounts in the already

established products and hence, new innovative products will lower their

bargaining power (Porter 2008). The company should also strive to build a strong

customer base which will provide the company with the chance to streamline its

process of production and sales together with reducing the power of the buyer to

bargain.

Optimum Physiotherapy can tackle the threat of substitute services or products

by incrementing the cost of the customers to switch, comprehending the critical

need of the customer instead of what they are just purchasing and it is very

imperative to be service oriented instead of product orientation.

The company should institute some strategies meant to tackle the existing rivalry

among competitors in this physiotherapy industry. This includes collaboration

with competitors for purposes of driving up the market size instead of fighting for

a small market size (Porter 2008). They develop the scale and sustainable

differentiation so that they can compete better.

References

Algan, Y., Dustmann, C., Glitz, A. and Manning, A., 2010. The economic situation of first and

second‐generation immigrants in France, Germany and the United Kingdom. The Economic

Journal, 120(542).

Agostini, P., Reeve, J., Dromard, S., Singh, S., Steyn, R.S. and Naidu, B., 2013. A survey of

physiotherapeutic provision for patients undergoing thoracic surgery in the UK. Physiotherapy,

99(1), pp.56-62.

Buzzard, B.M., 2007. Physiotherapy, rehabilitation and sports in countries with limited

replacement coagulation factor supply. Haemophilia, 13(s2), pp.44-46.

Grundy, T., 2006. Rethinking and reinventing Michael Porter's five forces model. Strategic

Change, 15(5), pp.213-229.

Karagiannopoulos, G.D., Georgopoulos, N. and Nikolopoulos, K., 2005. Fathoming Porter's five

forces model in the internet era. info, 7(6), pp.66-76.

Morgan, P.B. and Efron, N., 2006. A decade of contact lens prescribing trends in the United

Kingdom (1996–2005). Contact Lens and Anterior Eye, 29(2), pp.59-68.

Porter, M.E., 2008. The five competitive forces that shape strategy. Harvard business review,

86(1), pp.25-40.

Shaw, A., 2010. Social media and the pharmaceutical industry. White paper. Strategic Planet.

Sheppard, L., 1997. Analysis of the Physiotherpay Industry: Challenges for Marketing. Health

Marketing Quarterly, 14(2), pp.35-42.

Thelen, K., 2004. How institutions evolve: The political economy of skills in Germany, Britain,

the United States, and Japan. Cambridge University Press

Optimum. (Online). All about US. Available at http://www.optimum-hcs.com/

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