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HBX Business Blog

Disruptive Strategy Reflection: Walmart's Care Clinics

Posted by HBX on March 29, 2016 at 3:11 PM

Participants in Disruptive Strategy with Clayton Christensen wrote final papers to apply the principles they learned in the course to a real organization. The post below is an excerpt written by Barrett Levesque.


In 2014, Walmart announced plans to create its own healthcare clinics run by nurse practitioners where, in a similar story to its founding mission, prices will be low, primary care services will be comprehensive, and hours will be convenient.

The first lens to examine Walmart’s plans to be the #1 healthcare provider in the country is “what type of innovation is this” lens. Their proposed healthcare organization is both a new-market disruption and a low-end disruption. Primary care visits are important for long-term health, but often missed due to the inconvenience of missing work or identifying a primary care doctor, or the cost of the visit or lack of insurance. A low cost option that is convenient and “good enough” for their primary care could potentially open up health care to a group of people who previously could not afford the time and money for a visit. The clinics would be “low end” because of the “good enough” service from providers such as nurse practitioners.

The second lens to apply is the “job to be done" lens." Walmart executives can look out into the country and see people essentially saying, “help me find low cost, convenient, one stop shop primary care." The experience they need to provide for that job is convenient, low cost, good enough healthcare. To meet this goal, Walmart has buildings that are frequently visited in convenient locations with convenient store hours. Walmart needs to integrate its physical buildings, store hours, and choice of healthcare providers to meet this task. Advice to the CEO: Walmart will need a healthcare brand to rally around this task, analogous to the CVS MinuteClinic. Consider “Wal-Care."

The next lens to consider is RPP: Resources, Profit Formula, and Processes. Walmart will need a separate business unit with resources including healthcare IT, healthcare workers, administrators, and insurance “office managers." Processes will need to be established around availability of medical tests, efficient pharmacies, and methods to implement best care and regulatory guidelines. Their profit formula is going to need to focus on “good enough” primary care. Relationships with hospitals and specialists will also need to be prioritized. These hospital relationships must be cost effective and convenient. The choice of what conditions are covered is going to be a key one for the company.

Next steps: The profit model should take into account the many shortcomings of the current primary care model (e-Health record shortfalls, the rising costs of healthcare technology and treatments for an insurer, the lack of motivation for many individuals to see a PCP for preventative care) and prioritize resource allocation which meets their goal of efficient, convenient, low cost health care. This may well include a more efficient e-Health record, integration with services to check for low cost specialists to refer to outside the system, integration/volume deals with hospitals, and hiring additional staff to provide more time for the healthcare providers to focus on the delivery of the “performance enhancing” module.

Interested in learning about lenses and other theories from Professor Christensen? Disruptive Strategy will equip you with the tools, frameworks, and intuition to make a difference.

Learn more about HBX Disruptive Strategy with Clay Christensen

Topics: Disruptive Strategy