Determining strategic groups using multidimensional scaling

Millard Fillmore Hospital (MFH), a major hospital in the Western New York area, needed to develop strategies to attract physicians who could increase patient referrals to the hospital. Bed utilization, a key determinant of economic performance of any hospital, in turn depends on increased referrals. The present study aimed to develop strategic groups of hospitals to help to determine the strategies that would make MFH attractive to physicians. The authors used multidimensional scaling to determine the strategic groups of hospitals and the resultant competitive position of MFH and to determine which factors were strategically important. These results were used to develop strategies specifically focused to attract physicians and to increase patient referrals.