Book Review — Improve Your Competitive Strategy: A Guide for the Health Care Executive

May-June 2004
By: William C. Schoenhard, FACHE

REVIEWED BY WILLIAM C. SCHOENHARD, FACHE

Alan M. Zuckerman
Health Administration Press, Chicago, 2002, 272 pp., $55 (paperback)

Alan M. Zuckerman has written a very clear, insightful book about various competitive strategies that health care organizations have deployed with varying success in recent years. Following an excellent review of the literature on competitive strategies, both inside and outside health care, Zuckerman devotes a chapter to each of the main competitive strategy approaches used in health care: "vertical integration," "horizontal integration," "diversification," "niching," "cost leadership," and "differentiation." Each chapter defines a particular competitive strategy approach and examines its applicability to health care organizations. Utilizing case studies from both inside and outside health care, as well as a review of the business and health care literature, Zuckerman assesses each competitive strategy and its potential for success.

Although vertical integration and diversification hold big rewards as well as big risks, Zuckerman says that few health care organizations should pursue these strategies. Horizontal integration seems to have some promise, but only for organizations that have achieved indisputable market dominance or huge cost advantages. Niching has met with some success, especially in the investor-owned segment of health care, and is likely to grow. Cost leadership, while broadly successful in the general business community, has been essentially unsuccessful in health care. However, the author believes it may become more important if price competition emerges among health care providers. Differentiation has the longest history in health care, and, according to the author, is "probably the next major competitive battlefield following integration of care in the late 1990s."

In each of the chapters describing these competitive strategies, Zuckerman utilizes a variety of excellent case studies from within and outside health care. Some of the organizations profiled are AT&T, the Walt Disney Company, Henry Ford Health System, UniHealth America, Southwest Airlines, Nokia, the Johns Hopkins Hospital and Health System, and HealthSouth Corporation.

The author ends the book by emphasizing the need to raise competitive strategies to a higher level through industry analysis, competitive analysis, and competitive intelligence. The book concludes with 10 lessons for competitive strategy, beginning with the first lesson, which the author calls "Commit to Competing."

Zuckerman states in his introduction that he hopes to make an important contribution to the competitive capabilities of health care executives and the organizations they manage. This book accomplishes that purpose through an excellent literature review and analysis of the strategies employed to date in health care, both those that have worked and those that have not, along with implications for what may be effective for the future.

William C. Schoenhard, FACHE
Executive Vice President/Chief Operating Officer
SSM Health Care
St. Louis

 

Copyright © 2004 by the Catholic Health Association of the United States
For reprint permission, contact Betty Crosby or call (314) 253-3477.