DHC Marketing Strategy: Competing with MedCenter Threat

Situation Analysis

Downtown Health Clinic (DHC) has long enjoyed a relative monopoly on inner-city ambulatory and employment-related health care, serving a dedicated local market. As MedCenter threatens to encroach on DHC's territory, DHC must adopt a new and aggressive marketing strategy to protect its position.

Strengths

DHC is currently the only ambulatory health care center in the downtown core, and as a result its brand is familiar to local consumers and downtown businesses. In addition to serving walk-in and emergency clients, DHC has attracted a range of patient referrals from local businesses requiring worker's compensation and employment-related health care examinations. The Assistant Administrator of DHC is motivated and willing to make the changes necessary to ensure the clinic's future success and growth.

Weaknesses

DHC has yet to embrace a clear marketing strategy and has in fact shied away from using marketing as a tool. Business and personal clients are already expressing discontent and requesting changes in service delivery that could prove costly, including an expanded range of services and extended hours of operation. Additionally, MedCenter is addressing the needs of two distinct target markets — employers and their workers as well as indigent downtown residents — rather than concentrating on a single segment.

Opportunities

DHC can transform its pre-existing relationships with city businesses and institutions into formal contractual ones. DHC also has the opportunity to leverage MedCenter's broad focus against it by positioning itself as the specialist downtown provider, effectively forcing MedCenter to concentrate on walk-ins and other less lucrative clients. Finally, DHC has a short but real window of opportunity to establish strong brand recognition and solidify relationships with current clients before MedCenter gains a foothold.

Threats

DHC has little time to address its weaknesses and develop a marketing campaign, as MedCenter has already begun surveying local markets. MedCenter carries strong and established brand recognition, particularly among suburban clients; individual employees who work downtown may already be aware of — or actively use — MedCenter at one of its other locations. As an established, marketing-savvy medical services company, MedCenter can deploy targeted advertisements and superior branding strategies to steal clients from DHC relatively quickly.

Identifying Strategic Alternatives

Alternative 1: Wait for MedCenter to Act First

Pros: Waiting would allow the Assistant Administrator to focus time and resources on addressing the changing needs of existing clients before tackling marketing concerns or the threat of competition. It would also allow DHC's leadership to observe MedCenter's approach and tailor a response strategy accordingly.

Cons: MedCenter's aggressive marketing and branding strategies almost guarantee that it — not DHC — will attract new clients, leaving DHC reliant on a finite and potentially shrinking clientele. The window of opportunity to build brand recognition and improve DHC's community image is small, and MedCenter is likely to act quickly.

Alternative 2: Mimic MedCenter's Business Model with Aggressive Marketing

Pros: A forceful marketing strategy could seriously hinder MedCenter's efforts to attract downtown and business clients and might even deter MedCenter from expanding into DHC's territory entirely. A more aggressive marketing campaign would also be an investment in DHC's future, establishing the clinic as the leading downtown ambulatory services center and reducing the threat of future competition beyond MedCenter.

Cons: Funneling funds almost exclusively toward marketing would leave DHC unable to invest in much-needed upgrades to medical services or to offer the extended hours clients are requesting — risks that could backfire and cause existing clients to leave. DHC would also risk losing the reputation the Assistant Administrator carefully built as a medical center that did not resort to what she called "crass commercialism" (p. 200).

Alternative 3: Simultaneously Improve Medical Services and Market Aggressively

Pros: This middle-ground approach engenders trust among existing clients by demonstrating that DHC listens to their needs. Extending hours and services is also likely to attract new clients before MedCenter can lure them away.

Cons: DHC may not invest fully enough in its marketing strategy to successfully stave off MedCenter's competitive threat. There is also a risk of losing clients after investing substantially in improved services if the marketing effort falls short.