Comprehensive Strategic Management Report: Sonic Healthcare Analysis

This report provides a strategic analysis of Sonic Healthcare, an Australian healthcare company. It begins with an introduction and an overview of the company, followed by an analysis of the macro-environment using the PESTEL framework. The report then delves into Sonic Healthcare's competitive advantages, emphasizing its brand loyalty, adoption of technology, and effective management. Porter's generic strategies, specifically cost leadership and differentiation, are discussed, highlighting how Sonic Healthcare strives to be a cost leader. The report also examines the growth strategies, including market penetration, product development, market development, and diversification using the Ansoff matrix. Finally, the report offers recommendations for Sonic Healthcare's future growth, including technological upgrades, diversification of revenue streams, and improvements in healthcare technologies and information systems. The report concludes with a summary of the key findings and recommendations.

Running Head Strategic management 0
Sonic healthcare

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Contents
Introduction.................................................................................................................................................2
Macro-environment.....................................................................................................................................2
Company’s competitive advantage..............................................................................................................3
Company’s Generic strategies.....................................................................................................................4
Growth strategies.........................................................................................................................................5
Recommendations.......................................................................................................................................6
Conclusion...................................................................................................................................................7
Reference....................................................................................................................................................8

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Introduction
Sonic healthcare limited is an Australian company that provides laboratory services, radiology,
and pathology services. It is a public company which was founded in 1987 and its headquarter is
in Sydney, New south wales, Australia (The Savoy, 2019). This report includes the analysis of
macro and microenvironment of the organization. The competitive advantage and generic
strategies are discussed for analysis of the position of the organization in the market. The growth
strategies of the organization will be discussed for growth and development. For the functional
and business level, the various recommendations will be provided to the organization which will
be beneficial for the growth of the business in their market.
Macro-environment
PESTEL analysis is a strategic tool for analysing the macro environment of Sonic Healthcare. It
includes the political, economic, social, technological, environmental and legal factors.
Political factors
It plays an important role in determining the impact on the long term profitability in the market.
It includes the legal framework for the enforcement of a contract for running the healthcare
business. The organization is required to follow the trade regulations and tariffs which are related
to the healthcare services and equipment (Martinet, 2010).
Economic factors
An economic factor includes the economic system which is followed by the organization for
running the operations. The exchange rate and stability are followed by the host country. Interest
rates and inflation rates are followed. The skill level of the workforce is required in the
healthcare and services industry (The Savoy, 2019).
Social factors
It includes the culture and shared beliefs that are required to be followed for understanding the
customers in the market. Demographics and level of skills in population, class structure, power

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structure and hierarchy of the society are required to be considered for running the business. In
Australia, Sonic healthcare considers the attitudes, culture and entrepreneurial spirit.
Technological factors
In sonic healthcare, the industry is required to adopt the latest technology. The latest technology
is required to be adopted for dealing with the competitors in the market. Technology impacts on
offering the products to the customers. It includes the impact on the cost structure which requires
in the industry of healthcare equipment. The value chain structure is required to be considered
which also includes the rate of technological diffusion (Martinet, 2010).
Environmental factor
Environmental factors include the consideration of weather, climate change and laws for
regulating environmental pollution. In Sonic Healthcare, the management provides the services
to customers for their convenience.
Legal environment
In Australia, the government exerts considers for influencing the market which includes the laws
for setting the national health policies and subsidizing health services in the market. It includes
the anti-trust law as well as discrimination law which are required to be considered. It is
necessary for the organization to consider the health and safety laws for satisfying the patients.
Company’s competitive advantage
Sonic healthcare is leading in the market in providing healthcare services to the people. It
requires to provide high-quality services and equipment for gaining the advantages in the market.
The organization has created the brand loyalty and brands for creating the unique products.
Competitive advantages help the organization in creating superior value for the customers. The
adoption of the latest information technology in the operation of the business helps in gaining
competitive advantages (Lotayif, 2016). In the industry of healthcare, Sonic healthcare develops
and implements the system and process which includes the EMR software application which
helps in creating the imitable component for leading the sustainable competitive advantages.
Linkages in healthcare industry are considered as a source of gaining competitive advantage.

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They use technology for reports which help in extracting the data and software are used for
creating the dashboards of reports which helps in measuring quality, trends, costs, projects and
many more.
In order to deliver the services, sonic healthcare adopt the market-based approaches which
include the attention of executives shifts from the competition merits to the strategies. For the
competitive advantage, the organization adopts the ways for increasing the sales and attracting
the customers towards the services with the abilities to leverage the economies of scale and
strengthening the bargaining position of the organization in the market (Hussain, et al., 2013). In
Australia, the healthcare market is moving quickly towards providing the outpatient care. In
order to increase the profitability, the organization requires increasing the bargaining power of
suppliers as contributing towards the switching costs as higher. It is analyzed in the healthcare
industry, the higher switching costs lead to increasing customer retention, profitability, and
competitive advantages. Effective management is essential in the organization for managing the
employees and different business functions.
Company’s Generic strategies
Porter's generic strategies include is used for determining the profitability which includes the
types of competitive advantages which a firm can possess are low costs or differentiation.
In Sonic healthcare, the cost leadership helps in striving to be cost leader as cost reduction is
considered. It includes the low-cost strategy for facilitating, operations, overhead, saving costs
which include the services, R&D, sales, training, and development as well as advertising. The
company is following the cost leadership strategy in providing the services to the customers

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(Hammer, et al., 2017). In the industry of healthcare, it is necessary to consider the attributes and
requires considering the unique position. They are offering various services which help them in
providing a large number of options to the customers. Cost leadership strategy is effective for
competitive advantages. It includes striving to be a cost leader and in this case, cost reduction is
becoming the major concern for running the strategies. The strategy of low cost helps in
addressing the facilities, operations, overheads, cost-saving the experiences, and investing in
R&D services, advertising, developing the strategies. The strategy of cost leadership helps the
business in giving the defense against the rivalry from competitors due to the low costs of
services. It is analyzed that the position of the low cost depends on the ability of the firm against
the powerful buyers as the buyers include the exert power for driving the prices down to the level
of the most efficient competitors (González‐Benito and Suarez- González, 2010). Leadership
strategies include leading and managing the team for making an effective decision.
A differentiation-based strategy attempts to establish fundamental differences in various
dimensions so that buyers perceive a significant difference between a company's
products/services and its competitors. Companies that successfully stand out will receive a
premium reward for their uniqueness. The economics inherent in this universal strategy requires
that the premium must exceed the additional cost of uniqueness. Therefore, differentiation cannot
ignore the issue of cost, because the premium will be invalid due to excessive costs. A company
that successfully sets itself apart can also build a defensive position against the five types of
competitiveness (George, et al., 2012).
Growth strategies
The company is using the Ansoff matrix for the growth in the market. It includes the four
different strategies for the business includes market penetration, product development, market
development, and diversification. In sonic healthcare, market penetration includes the strategy
for selling the existing products in the existing market. This strategy is used by Sonic healthcare
as they are focused on providing healthcare services (Datta, 2010). It is adopted by decreasing
the prices of the services for attracting new customers towards the services. It is required to
increase promotion and distribution efforts.

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Investment is required to be done in R&D for developing new products. The organization
acquires the products and services of the competitor and also merges the resources for meeting
the needs of the existing market (The Savoy, 2019). Growth strategies are required to be
implemented with the help of diversification. It includes to diversify the business in the new
market. Market research is required to be done by the organization for determining the
consumer’s requirements in the potential market.
Market development requires to focus on entering into the new market by providing the existing
services to the customers. Diversification is required to make a focus on the new market with the
help of introducing the new product. Sonic healthcare owns proprietary technology which helps
the organization in leveraging into the market. in order to grow and profitability, the organization
adopts the strategy for attracting the customers and it requires to analyze the behavior of
consumers by catering to the various customer segment and requires to enter into the new
market. Diversification is required in the business for developing the market strategy. It includes
the two types which are related and unrelated (Dockalikova and Klozikova, 2014). The success
in healthcare ultimately depends on Sonic's commitment to medical leadership, quality
diagnostics and adherence to the ethical principles of the medical industry, and the hard work
and consistent quality of service of our dedicated employees. Sonic Healthcare has also achieved
success in the financial sector, where Sonic Healthcare enjoys a reputation as a growth company
that brings consistent value to shareholders (Yüksel, 2012).
Recommendations
The various recommendations are provided to the sonic healthcare for the growth and
development in the domestic as well as in the international market. It is recommended to manage
the people and bring the change in the operations for the growth. It is necessary to upgrade the
technologies for bringing the changes. The factors are required to be considered for the migration
and safety of the customers (Angst, et al., 2011). It is necessary for providing the safety,
effectiveness, and efficiency in healthcare services. As the sonic healthcare, provides the
laboratory services in which the reports are to be provided on time. The latest technology
machine is required to be used for providing the services of pathology and radiology so that the
correct reports can be provided. The firm is required to diversify the base of revenue for the new

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business opportunities. Health care technologies include medical devices and health information
technologies for providing care to the customers. The organization is required to improve the
adverse event reporting system for medical devices (Pai and Huang, 2011).
It is recommended for improving the usability and effectiveness of the technology systems and
devices (Phichitchaisopa and Naenna, 2013). It is recommended to follow the regulations of
healthcare for increasing prominence with the help of using health care services. It is
recommended to adopt the information system for managing the operations of the business. At
the business and functional level, the management is required to implement the software which
will helps in generating the reports in an effective manner. It is recommended to bring
innovative thinking and strategic orientation for the growth and development of the business in
the international as well as in the national market. In order to improve production efficiency and
performance, the organization is required to increase the sale of the services. The healthcare is
considered as a competitive and growing industry, the strategic changes are recommended which
helps in increasing the sales and profits. It includes the three factors as structure, process, and
relationships. They are required to be managed with the help of adopting the leadership style
(Shatskaya, et al., 2016).
Conclusion
In order to conclude, Sonic healthcare is a global healthcare provider and they had created a
reputation by providing the laboratory, radiology and primary medical services. The company
adopts and implements strategic management for increasing sales and profits. Sonic healthcare
includes the various opportunities for expanding the business in the market. In order to sustain in
the market, the organization is required to adopt the strategies for the diversification of the
products. The macro-environment of the organization helps in analyzing the position of the
business in the market. The adoption of competitive strategies helps the business to grow and
gain competitive advantages.

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