Conceptual Framework


Today most companies find that it impossible to create any kind of sustainable competitive advantage based on product alone. It is common knowledge that every one of the successful companies sought and found a precise understanding of how it could create a customer-centered competitive advantage. Business firms invest on researches that will define their target customer groups that they believed they could serve best. Every business person is determined to know what kind of work they would and would not do for their customers and, in turn, they carefully learn how to fulfill the needs of each kind of customer in their target markets.  (1996) emphasized the idea to take advantage of the competitive situation not just by being better in how that product gets sold, serviced, and marketed at the customer interface. It requires that companies create breakthroughs in how they interact with customers, and design a way of interacting that makes an indelible impression on customers, one that so utterly distinguishes them from others that it becomes a brand in itself (1996).


Understanding the dynamics of the competitors in the industry helps assess the potential opportunities of every business venture by differentiating the similar products or services offered by the company against other business organizations. As such, it is necessary to realistically assess potential levels of profitability, opportunity and risk based on five key factors within an industry so as to determine the long-term profitability of a market or market segment (1998).



 


This conceptual framework directly targets to answer research question numbers 1 and 3. The organizational factors are deemed to be the resources and capabilities that drive the organization towards competitive advantage. Meanwhile, the external conditions are the factors that affect the utilization of resources and capabilities of private hospitals.


In relation to research question numbers 2 and 4, the identified drivers of competitive advantage are applied using the identified findings as well as recommendations as product of the researcher’s analysis.


 


Organizational Factors and Competitive Advantage


            The internal factors present within the firm is considered as it main instruments in gaining competitive advantage. This is where people make the most of their skills. Describing the internal environment that includes the whole organizational setup, people and related factors is a requirement as it is the means to identify the strengths as well as weaknesses, opportunities and threats.


The environment where an industry is situated plays a major role in the conduct of business organizations. It constantly shapes and reshapes the fate of organizations in relation to the presence of competition. Today, the changing environment of business has prompted various organizations to devise competitive strategies very different from the conventional ones. They now perceive that conventional strategies are not suitable anymore in contemporary business. Meanwhile, the changing global business environment signals the need to adopt new strategies. Thus, the industry environment significantly shapes the competition of organizations.


H1. The industry environment significantly shapes the competition of organizations.


 


Similarly, these organizational factors are the source of core competencies of the whole firm. The strategic competencies of organizations are commonly known as its core competencies. Core competencies are a combination of technological expertise and organizational capabilities (1996). They provide protection for the company against present and future competitors. They serve as a barrier to competitors trying to penetrate the company market ( 1999). For instance, the management and leadership style used within the firm, human resources, or technology and innovations are considered as core competencies of the organization. These can play a significant role in developing a competitive advantage against competitors or its overall function and performance.


H2. A firm’s strategic competencies significantly affect its performance.


 


The success of a company can be measured on the level of its competencies, so the company should define their competencies in such a way that they will be able to take advantage of greater opportunities. The core competencies of the company will provide opportunities for future competition (2006). Core competencies can be considered a source of competitive advantage. The competitive power of an organization often lies in its core competencies. These become the basis for competition and also provide the foundation for sustainable competitive advantage (2002).


The organizational factors present within the bounds of the whole firm are believed to be the source of organizational strategic core competencies. The manner in which the management utilizes it is the key to its eventual materialization towards progression, thus, turning them into competitive edge.


H3. The success of the private hospital industry lies in the utilization of strategic competencies.


 


Competing for resources, customer and competencies are the key aspects of competition among private hospital organizations as well as public ones. By maintaining a competitive advantage, private hospitals can manage future competition. In the same way, the competitive advantage of organizations is integral to their success. Organizations have adopted different strategic management tools as a framework for creating and sustaining competitive advantage. As stated, the manner in which the organization uses its identified core competencies and strategic management tools directly affects the organizational performance.


H4. The strategic management tools adopted by an organization directly influences the development of its competitive advantage.


 


In the resource-based strategy, it is assumed that there are significant differences among firms to the extent to which they control their resources. Also, the differences in the resource endowment of firms cause differences in their performance (1997). The resource-based view is generally seemed to be appropriate in organizations like the private hospital industry (1999). The nature of this model makes it indispensable for the private hospital industry to utilize its core competencies. Primarily, the model concentrates on developing the internal resources and capabilities of organizations.


The nature of the private hospital industry requires the use of a resource-based view. In this kind of industry, organizations compete for the same resources, competencies and customers. Because of this, there is a need to utilize the unique characteristics of organizations. It is through the resource-based view that the private hospital organizations can tap their internal resources and capabilities. This can reveal unique characteristics which in turn will allow into gain a competitive edge.


Considering the external conditions that directly affects the overall condition of organizations, the inherent factors present within the organization that serves as its advantage will also serve as its barrier against the potential hazards brought about these external factors. In connection, the implementation of the resource-based view as a management tool yields to higher productivity.


H5. The implementation of the resource-based view as a strategic management tool in private hospital industry yields significantly higher productivity. 


 


             


 



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