Example Paper Outline
Walmart & Healthcare Example
Below is an outline of the type of information you could include in each section of a paper examining Walmart’s expansion into healthcare. This example is not meant to be all inclusive, but rather provides an example of how to approach applying the theories you’ve learned to various situations. Note that your final paper will be submitted in paragraph form with complete sentences. 1. Company Description:
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Founded in 1962 in Rogers, Arkansas, USA by Sam Walton.
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Walmart employs 2.2 million people all over the world.
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Walmart’s ≈11,500 stores produce ≈$482 billion.
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Each week roughly 260 million customers visit a Walmart, one of Walmart’s e-commerce sites, or one of their 72 brands.
2. Characterization of the situation & theories:
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In 2014, Walmart announced they wanted to become the #1 healthcare provider in the industry.
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Over the past decade, Walmart has made deliberate steps to enter healthcare. Here are some of their new initiatives: Prescription program, primary care facilities, simple-service clinics, healthcare coverage consulting.
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This bold plan highlights the following Disruptive Strategy theories:
Aligning with Innovation and Disruption (Module 1)
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Low-end disruption: Similar to the Minute Clinic case in Module 2, Walmart’s simple-service clinics – limiting their offerings to diagnosing simple illnesses and providing prescriptions and vaccinations – can be seen as a potential low-end disruption relative to traditional doctor’s offices. These clinics are attracting overserved customers.
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New-market disruption:. Walmart’s clinics can also be seen as a new-market disruption. Due to their simplicity and convenience, these clinics attract clients who previously lacked the money or insurance to see a regular doctor.
Discovering Customer Jobs To Be Done (Module 2).
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Consider the job to be done of “help me confirm that I’m sick and get the proper medication.” You can see that the clinics provide better service relative to the traditional doctor’s office. Clinics allow customers to simply show up without an appointment and get quick, reliable service for simple illnesses. And in some cases, this may be provided at a lower cost.
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As these clinics grow, they must remember to stick to the job to be done for which they are hired. The temptation will be for the clinics to look more and more like traditional doctor’s offices. The clinics must maintain discipline by continuing to integrate their organization to provide the relevant experiences needed to nail the job to be done.
Organizing for Innovation (Module 3).
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Each week, Walmart welcomes 260 million visitors to their world-wide stores. At first glance, it would appear like placing these healthcare services inside a Walmart would be a huge benefit. However, the success of healthcare services inside Walmart stores will partially depend on the resources, processes, and profit formula specifically established for the healthcare services.
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For example, Walmart is accustomed to a specific margin and turnover for the product line in their stores. If healthcare services are held to the same margin criteria, then these services could potentially be seen as not successful. It’s possible that Walmart could lose patience with the healthcare services even while it is on a path to success.
Maintaining a Disruptive Scope (Module 4).
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According to Walmart, two thirds of people have problems selecting the right insurance. In Disruptive Strategy language, the interface between insurance plan options and determining an individual’s healthcare and economic need is very interdependent. Choosing an insurance plan can be extremely daunting and confusing. It’s not as simple as grabbing one off the shelf. Detailed information is needed to compare plans and match these plans with the needs of the individual.
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The theory of interdependence and modularity would suggest that there is an opportunity for a health plan provider to integrate forward and provide personalized consulting to account for the interdependency. This is essentially what Walmart has done by partnering with DirectHealth.com. This partnership encompasses the interdependency by providing access to both the insurance plan and the personalized information to make the right decision.
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It is reasonable to assume that over time this interface will become more and more defined and, thus, modular. Similar to tax services like TurboTax, Walmart should look for opportunities to automate the selection of insurance plans.
3. Recommendations based on analysis of theories:
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The clinics can be positioned as either a low-end disruption or new market disruption. In either case, asymmetric motivation is created because the incumbents are motivated to “flee” or move up market rather than fight for services with lower margins.
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The theory of disruption suggests that, over time, Walmart should move up market by providing more and more convenient services. You can easily imagine Walmart treating more illnesses, injuries, and procedures.
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The theory also suggests that incumbents will abandon the low-end services and instead focus on more complicated and higher margin illnesses, injuries, and procedures.
The following readings were referenced to create the above bullet points:
Again, this is only a sample outline. Your final paper will be submitted in paragraph form with complete sentences.
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