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Application of Porter's Generic Strategies in Ambulatory Health Care: A Comparison of Managerial Perceptions in Two Israeli Sick Funds

Torgovicky, Refael; Goldberg, Avishay; Shvarts, Shifra; Dayan, Yosefa Bar; Onn, Erez; Levi, Yehezkel; BarDayan, Yaron

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Abstract: A number of typologies have been developed in the strategic management literature to categorize strategies that an organization can pursue at the business level. Extensive research has established Porter's generic strategies of (1) cost leadership, (2) differentiation, (3) differentiation focus, (4) cost focus, and (5) stuck-in-the-middle as the dominant paradigm in the literature. The purpose of the current study was to research competitive strategies in the Israeli ambulatory health care system, by comparing managerial perceptions of present and ideal business strategies in two Israeli sick funds. We developed a unique research tool, which reliably examines the gap between the present and ideal status managerial views. We found a relation between the business strategy and performance measures, thus strengthening Porter's original theory about the nonviability of the stuck-in-the-middle strategy, and suggesting the applicability Porter's generic strategies to not-for-profit institutes in an ambulatory health care system.

Refael Torgovicky, MD, MHA, is a Flight Surgeon, The Israeli Air-Force Aero-medical Center, Tel-Hashomer, Israel.

Avishay Goldberg, PhD, MPH, is the Head of Leon and Matilda Recanati School for Community Health Professions, Department of Health Systems Management, Faculty of Health Sciences & School of Management, Ben Gurion University of the Negev, Israel.

Shifra Shvarts, PhD, is the Head of Department of Health Systems Management, Faculty of Health Sciences & School of Management, Ben Gurion University of the Negev, Israel.

Yosefa Bar Dayan, MD, MHA, is the Head of the Medical Services Branch, IDF Medical Corps and the Department of Health Systems Management, Faculty of Health Sciences & School of Management, Ben Gurion University of the Negev, Israel.

Erez Onn, MD, is Deputy of the Surgeon General Israeli Defense Forces Medical Corps, Israel.

Yehezkel Levi, MD, is Surgeon General of the Israeli Defense Forces Medical Corps, Israel.

Yaron BarDayan, MD, MHA, is Deputy of the Surgeon General, IAF, and the Department of Health System Management, the Faculty of Health Sciences, Ben Gurion University, Beer Sheva, Israel. E-mail: bardayan@netvision.net.il.

© 2005 Lippincott Williams & Wilkins, Inc.