Medibank
Medibank
Executive Summary
Introduction - 300 words
I. Description of the mission/vision strategic intent and corporate and/or business strategy of the organization
a. Mission
o Customer Focus - We treat our customers as we would like to be treated.
o Accountability - We own it, commit to it and deliver it.
o Integrity - We are open, honest and transparent, and help others to be the same.
o Respect - We celebrate our differences and treat others as equals.
b. Vision
Our 2030 Vision is to create the best health and wellbeing for Australia. We connect people to a better quality of life at every moment. We create access, choice and control for everyone, and together lead change for a stronger health system.
c. Business strategy
Growing as a health company
We are focused on delivering leading experiences, differentiating our insurance business and expanding in health.
Deliver leading experiences
Create personalised and connected customer experiences
Empower our people
Collaborate with our communities to make a difference
Differentiate our insurance business
Deliver more value, choice and control for customers
Offer products and services to meet all customer needs
Leverage our dual brands and provider networks
Expand in health
Focus growth on prevention and integrated care models
Scale and connect our health businesses
Bring benefits back to our core
Medibank has two strong and interdependent core businesses - private health insurance, operating under the Medibank and ahm brands, and the Medibank Health Solutions health services business. We intend to grow both businesses in their own right and will, by dint of the leveraging of their combined capability, provide new solutions to solve population health problems across all key customer domains: private health insurance, government and the corporate sector.
II. Description of the specific context and details of the organizational structure
Specific context
Background
Medibank Private Limited is a locally-owned publicly listed company, deriving revenue from the provision of private health insurance, underwriting and complementary health services. The company employs approximately 3,400 full-time equivalent employees, operates throughout Australia and is administered by its head office in Docklands, Victoria.
Medibank was founded in 1976 as a private health insurer and was operated by the Australian Government. In 1998, Medibank Private Limited became the operating entity with the Commonwealth of Australia as the sole shareholder.
Medibank is Australias largest provider of private health insurance and health solutions. Each year, we pay billions of dollars worth of hospital and allied health claims and directly deliver almost 600,000 clinical services, helping millions of Australians live healthier, fuller lives. With a large and diverse customer base, Medibank is one of the best recognised brands in Australia. We are proud of the position of trust we have established and of our integral role in Australias health system.
Product & Brands (IBISWorld 2022)
Medibank Private Limited provides the following insurance services under the Medibank and ahm brands:
Health Insurance - A range of coverage options including hospital, extras (including dental and optical), accident, ambulance and corporate, as well as health insurance for persons travelling to Australia.
Life Insurance - Income protection, life insurance and funeral insurance.
Travel Insurance - Insurance covers for domestic and international travel.
Pet Insurance - Cover for pet medical expenses such as illness, cancer, and accidents.
b. Details of the organizational structure
Medibank was founded in 1976 as a private health insurer and was operated by the Australian Government. In 1998, Medibank Private Limited became the operating entity with the Commonwealth of Australia as the sole shareholder. In 2014 the Australian Government sold Medibank by way of an initial public offering, and divested all its shares in Medibank. Medibank listed on the Australian Securities Exchange (ASX) on 25 November 2014. The Board is committed to improving our customers experience and providing them with greater value. In line with this, the Board seeks to ensure that Medibank is properly managed to protect and enhance shareholder interests, and that Medibank, its directors, officers and employees operate in an appropriate environment of corporate governance. The Board comprises nine directors in total eight non-executive directors, including a non-executive Chairman, and the CEO. The Chairman of the Board is responsible for providing leadership to the Board and Medibank as a whole. The Chairmans other key responsibilities are outlined in the Board Charter. Before appointing a person as a director, the Board undertakes checks as to that persons character, experience and background, including criminal and bankruptcy checks. Medibank has a Fit and Proper Policy that complies with APRAs Fit and Proper Prudential Standard. This standard requires that a person in a position of responsibility, including a director, be assessed prior to appointment (or in some cases, as soon as possible after appointment) and on an ongoing basis as to whether the person meets the fit and proper requirements. The person must have the appropriate skills, experience and knowledge to perform the role and act with the requisite character, diligence, honesty, integrity and judgement. Upon appointment, each non-executive director enters into a service agreement setting out the terms of their appointment. This includes the requirement to build a shareholding in Medibank in order to align the interests of directors with those of shareholders. The Minimum Shareholding Policy requires non-executive directors to acquire shares equal to the value of one years base fee after tax over a period of five years. As part of the appointment process, Medibank enters into a deed of indemnity, insurance and access with each director. Each director is indemnified against liability in connection with their role as a director and Medibank is required to maintain a directors and officers insurance policy. The deed confirms and extends the directors general law rights of access to Board papers and other records of Medibank.
III. Competitor and industry analysis
Competitor
Bupa is a healthcare leader with health cover at its core, but its Bupas purpose that makes them different. They want their members to live longer, healthier, happier lives. Today more than 3.4 million Australians trust Bupa to provide them with affordable, high-quality health cover and its easy to see why. No matter what stage of life youre at, Bupa offers a wide range of carefully tailored plans to help suit your needs.
Its easy to use your extras cover with Bupa. You can claim:
On the spot by swiping your Bupa card (where available)
Online with myBupa, your member self-service area
Using the Bupa app on your smartphone
By post
At your local Bupa centre
Why Choose Bupa?
With Bupas extensive Members First network of general dental, physio, optical and chiro providers you can look after your health and feel certain about how much money youll keep in your pocket.
See clearly with a wide range of no gap glasses and contact lenses from Bupa Optical.
Choose Budget Family or Growing Family cover to get no out-of-pocket-expenses for kids until theyre 25 on most general dental and physio services at Members First providers.*
Request a private room 24 hours before your overnight stay and get $50 back if one is unavailable at Members First hospitals.*
Live well with great member discounts including up to 20% off gym memberships, 70% off vitamins and 25% off movie vouchers.
b. SWOT analysis
Strengths (Internal Strategic factors) Weaknesses (Internal Strategic factors) Opportunities (External Strategic factors) Threats (External Strategic factors)
Strong dealer community It has built a culture among distributors & dealers where the dealers not only promote the company's products but also invest in training the sales team to explain to the customer how he/she can extract the maximum benefits out of the products.
-Reliable suppliers It has a strong base of reliable suppliers of raw material thus enabling the company to overcome any supply chain bottlenecks.
-Good Returns on Capital Expenditure Medibank Private Limited is relatively successful at execution of new projects and generates good returns on capital expenditure by building new revenue streams.
-Strong Brand Portfolio Over the years Medibank Private Limited has invested in building a strong brand portfolio. The SWOT analysis of Medibank Private Limited just underlines this fact. This brand portfolio can be extremely useful if the organisation wants to expand into new product categories.
-Highly skilled workforce through successful training and learning programs. Medibank Private Limited is investing huge resources in training and development of its employees resulting in a workforce that is not only highly skilled but also motivated to achieve more.
-Superb Performance in New Markets Medibank Private Limited has built expertise at entering new markets and making them. The expansion has helped the organisation to build new revenue streams and diversify the economic cycle risk in the markets it operates in.
-Strong distribution network Over the years Medibank Private Limited has built a reliable distribution network that can reach the majority of its potential market.
Automation of activities brought consistency of quality to Medibank Private Limited products and has enabled the company to scale up and scale down based on the demand conditions in the market.
-Days inventory is high compared to the competitors making the company raise more capital to invest in the channel. This can impact the long-term growth of Medibank Private Limited
-Not very good at product demand forecasting leading to a higher rate of missed opportunities compared to its competitors. One of the reasons why the day's inventory is high compared to its competitors is that Medibank Private Limited is not very good at demand forecasting; this ends up keeping higher inventory both in-house and in channel.
-The marketing of the products left a lot to be desired. Even though the product is a success in terms of sales, its positioning and unique selling proposition is not clearly defined which can lead to the attacks in this segment from the competitors.
-Not highly successful at integrating firms with different work cultures. As mentioned earlier even though Medibank Private Limited is successful at integrating small companies it has its share of failure to merge firms that have different work cultures.
-The profitability ratio and Net Contribution % of Medibank Private Limited are below the industry average.
-Limited success outside core business Even though Medibank Private Limited is one of the leading organisations in its industry it has faced challenges in moving to other product segments with its present culture.
-Investment in Research and Development is below the fastest growing players in the industry. Even though Medibank Private Limited is spending above the industry average on Research and Development, it has not been able to compete with the leading players in the industry in terms of innovation. It has come across as a mature firm looking forward to bringing out products based on tested features in the market.
-Organisations core competencies can be a success in similar other products. A comparative example could be - GE healthcare research helped it in developing better Oil drilling machines.
-Stable free cash flow provides opportunities to invest in adjacent product segments. With more cash in the bank the company can invest in new technologies as well as in new products segments. This should open a window of opportunity for Medibank Private Limited in other product categories.
-The new taxation policy can significantly impact the way of doing business and can open new opportunities for established players such as Medibank Private Limited to increase its profitability.
-Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Medibank Private Limiteds products thus providing an opportunity to the company - either to boost its profitability or pass on the benefits to the customers to gain market share.
-New customers from online channels Over the past few years the company has invested vast sums of money into the online platform. This investment has opened a new sales channel for Medibank Private Limited. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
-Opening up of new markets because of government agreement the adoption of new technology standard and government free trade agreement has provided Medibank Private Limited an opportunity to enter a new emerging market.
-The market development will lead to dilution of competitors advantage and enable Medibank Private Limited to increase its competitiveness compared to the other competitors.
-The new technology provides an opportunity to Medibank Private Limited to practice differentiated pricing strategy in the new market. It will enable the firm to maintain its loyal customers with great service and lure new customers through other value oriented propositions.
-As the company is operating in numerous countries it is exposed to currency fluctuations especially given the volatile political climate in a number of markets across the world.
-New environmental regulations under the Paris agreement (2016) could be a threat to certain existing product categories .
-Rising raw material can pose a threat to the Medibank Private Limited profitability. Imitation of the counterfeit and low quality product is also a threat to Medibank Private Limiteds product especially in the emerging markets and low income markets.
-Liability laws in different countries are different and Medibank Private Limited may be exposed to various liability claims given change in policies in those markets.
-New technologies developed by the competitor or market disruptor could be a serious threat to the industry in the medium to long term future.
-Changing consumer buying behaviour from online channel could be a threat to the existing physical infrastructure driven supply chain model.
- The demand of the highly profitable products is seasonal in nature and any unlikely event during the peak season may impact the profitability of the company in the short to medium term.
IV. Explication of how the above might impact the organization's HR-related initiatives
Recruiting
Pay and Benefits
Managing Risks
Training
V. Discussion of the role that HR can potentially play in helping the organization innovate and attain sustainable competitive advantage
Role of HR in helping the Medibank innovation:
The HR can offer a huge benefits in assisting Medibank for moving their organization a way from being one-hit wonders and towards embedding and adopting a sustainable approach to innovation. According to (Amantha 2016), there are four important factors that HR can potentially play a critical role in helping an organization innovation including culture, capability, process and roles.
Creating a culture of innovation:
To demonstrate, there are four keys element of innovation such as collaboration, ideation, implementation and value creation (Kathy 2009). However, the main important factor in creating a culture of innovation in an organization is having an environment where risk taking is motivated (Amantha 2016). This means that the role of HR in Medibank has to adopt with failure and learn from it. Kathy (2009) added that one of the certainties about innovation is that if HR teams are doing it properly, failure will be provided at some point in time. For example, not all of the idea that Medibank has presented and come up to be successful which means that some ideas require a significant interaction and refinement before they will delight clients. Following this, HR can potentially paly some essential roles to help leader signal to the Medibank that failure is motivated in order to discover failure as a great chance to study what matters most to clients. Additionally, there are five ways that HR can help leaders including leadership training and development, Promotion system, Employee centric approach, helping managers take a team based approach, and HR and senior management collaboration (James 2019). Clearly, these are the key driver to create a culture of innovation that HR can play role in helping Medibank.
Building innovation capability:
Contrary to most people belief that innovation is not an innate skill some of people are born with and others are not. This means that there are many skills that individuals can learn to become a successful innovator. According to Amantha (2016), there are three main important skill set that HR practitioners can use to assist Medibank to become more innovation as follow:
One of the main frist skill set is to identify consumer driven opportunities. This also includes helping individuals to understand deeply on how to speak and observe to consumers in order to identify their biggest frustrations and issues. Therefore, if leaders of an organization can define what frustrates of consumers and create an effective solution that can eliminate frustrations, innovation effort of the organization will be successful (Tanja 2018). Secondly, HR can help to generate idea and creativity. This means that HR can help leaders of Medibank to create new idea by teaching them how to generate both incremental and breakthrough ideas as it is essential and define as a simple skill to teach. Finally, it is important to teach leaders the skills which can use to prototype ideas quickly and efficiently. Rather than jumping to the implementation leaders of Medibank need to prototypes their ideas and test it with real clients. Then, it allows Medibank to get some feedback from clients. Vicki (2019) stated that getting feedback from clients will allow an organization to study quickly and iterate which can ensure that the innovation that eventually gets practised is defined as the one that can resonates with consumers and truly adds value to their lives.
Creating a process for innovation:
Process and Structure might be presented as the antitheses of innovation, but having a clear structure or process for innovation is incredibly essential. To achieve this, HR can paly an important role in creating a process for innovation. According to Amantha (2016), there are five vital stages in making a process for innovation that provided by HR practioners including Idea gerneration and mobilization, advocacy and screening, experimentation, commercialization, diffusion and implementation.
Integrating innovation into leaders roles:
Eventually, HR can potentially help to ensure that leaders in the Medibank understants how innovation fits into their roles. In this step, HR practioners can think how innovation can be incorporated into leaders job descriptions and Key Performance Indicators. For instance, HR can build leaders of innovation by creating an openness to diverse though (David 2020). As can be seen, there is no doubt that HR can potentially in helping Medibank for innovation.
HR can attain sustainable competitive advantages:
Previously, the primarily performance of HR is administrative tasks including distributing payroll, administering benefits and tracking employees both sick and vacation days, handling accounts receivable and payable (Wayne 2016). However, from day to day many HR still have responsibility for accounting and employee paperwork, their role has been developed into one that can be used as a competitive advantages. According to (Bridget 2017), there are some important ways that HR can create and maintain a competitive advantage for the Medibank:
HR can help leaders source the right talent to get the skills that Medibank needs to grow and be competitive in the Market:
An expertise of HR can allow Medibank to understant how to choose and look for specialized talent when needed.
HR can offer insight into the going market rates for talent:
In this step, HR can allow Medibank to determine and review the competitive talent landscape on what compensation strategy will be aligned with the objective of Medibank health insurance.
HR can use data to present how the skill sets of the workers are evolving over time:
This stages, HR can show the leaders of Medibank where skills gap might be existed, so those gaps can be solved proactively.
HR can help to design worker development pathways that take into account the strategic and long-term needs of the Medibank:
In this step, HR needs to ensure that the key workers get the right training before it has to be utilized.
HR can use data to find potential worker problems before it becomes problematic:
HR can discover when engagement levels of Medibank are decreasing as it will have a significant impact on both turnover and morale. Following this, Medibank can take action to prevent it immediately rather than later.
HR can put together succession plans of Medibank that take into account the organizations strategic goals:
This will allow Medibank to remain competitive advantages even when there is turnover in key roles.
HR can analyze which workers are alert the management and high performers:
This step, HR can use fast-tracked for promotions and new projects.
HR guidance on legal issues of Medibank and can keep Medibank out of costly legal issues:
HR is not only help Medibank to save money but it can also save Medibank from major setbacks. Clearly, HR can potentially play an essential role in helping Medibank innovate and attain sustainable competitive advantage.
VI. Key HR-related recommendations including issues which might come to the fore as one attempts to implement your recommendations.
According to (), there are seven key common HR issues:
Compliance: Navigate Laws and Regulations
Recruiting the Best Talent
Employee Retention
Workplace Diversity
Overcoming Software Issues
Training and Compliance
Compensation & Benefits
VII. A broad discussion of the ethical issues that might confront the HR function. How might the HR function help the organization act in a more socially responsible manner?
Conclusion 500 words
Reference List
Bridget , M, 2017, Using HR as a Competitive Advantage, HR Daily Advisor, viewed 8 June 2022,
<https://hrdailyadvisor.blr.com/2017/08/21/using-hr-competitive-advantage/>
Wayne, B, 2016, How HR can drive sustainable competitive advantages, insidehr, viewed 8 June 2022,
<https://www.insidehr.com.au/how-to-add-competitive-advantage-through-effective-organisation/>
Amantha, I, 2016, 4 ways HR can help cultivate a culture of innovation, Insidehr, viewed 7 June 2022,
<https://www.insidehr.com.au/4-ways-hr-can-help-innovation-go-viral/>
Kathy, M, 2009, The Four Key Elements of Innovation: Collaboration, Ideation, Implementation and Value Creation, Federal Reserve Bank, viewed 7 June 2022,
<https://www.stlouisfed.org/publications/bridges/summer-2009/the-four-key-elements-of-innovation-collaboration-ideation-implementation-and-value-creation>
James, C, 2019, 5 Ways HR Can Help Develop Leaders, thehrdirector, viewed 7 June 2022,
<https://www.thehrdirector.com/features/leadership/5-ways-hr-can-help-develop-leaders4222019p/>
Tanja, E, 2018, 7 importance success factors for the introduction of innovation management, Innovation Management, viewed 8 June 2022,
<https://www.lead-innovation.com/english-blog/success-factors-for-the-introduction-of-innovation-management>
Vicki, H, 2019, Why successful innovation begins and ends with customers, viewed 8 June 2022,
<https://www.pwc.com.au/digitalpulse/customer-innovation-market-feedback.html>
David, W, 2020, HRs Role In Developing Innovative Organizations, viewed 8 June 2022,
<https://irc.queensu.ca/hrs-role-in-developing-innovative-organizations/#:~:text=HR%20should%20build%20leaders%20of,that%20make%20innovation%20more%20difficult.>
