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Considering the competition in strategy development: an extension of importance-performance analysis
1College of Business Administration, Fairleigh Dickinson University.
Journal of Health Care Marketing
|February 8, 1991
Summary
Including competitor performance in importance-performance analysis is crucial. Failing to consider competition can lead to ineffective business strategies, particularly for health maintenance organizations (HMOs).
Area of Science:
- Business Strategy
- Marketing Research
- Healthcare Management
Background:
- Importance-performance analysis (IPA) is a common strategic tool.
- Existing IPA models often overlook competitive dynamics.
- Healthcare markets, like Health Maintenance Organizations (HMOs), are highly competitive.
Purpose of the Study:
- To extend the traditional IPA framework by incorporating competitor performance.
- To assess the impact of including a competitive dimension on strategic analysis.
- To validate the enhanced IPA model using a real-world healthcare dataset.
Main Methods:
- The study adapted the standard Importance-Performance Analysis (IPA).
- Competitors' performance metrics were integrated into the IPA framework.
- Data was collected from a national sample of Health Maintenance Organization (HMO) members.
Main Results:
- The inclusion of competitor performance significantly alters the strategic implications derived from IPA.
- Analysis revealed that strategies based solely on member perceptions without considering competition can be misaligned.
- Specific examples of potential strategic misalignments for HMOs were identified.
Conclusions:
- Competitor performance is a vital factor that must be integrated into importance-performance analysis.
- Ignoring competitive aspects in strategic planning can lead to suboptimal or inappropriate business strategies.
- The enhanced IPA model offers a more robust approach for competitive market analysis, especially in sectors like healthcare.