What’s your strategy for your dental lab?

Dentists and labs sell the same thing for the most part

Jul 2nd, 2013
Palm Lab Article

Dental offices and dental laboratories, for the most part, all sell the same thing. The difference is price, quality, materials, and experience/education of dentists and technicians.

A dental laboratory has limited types of denture teeth, porcelains, alloys, and acrylics to create its products or brand, just as a dental office must find the right blend of customer service, patient services, and in-office systems to create its brand and patient experience. Developing a strategy to differentiate your business is about finding the right blend.

The strategic planning process can be broken down into six steps:
· Mission and vision
· Goal setting
· SWOT analysis
· Strategic formulation
· Implementation
· Evaluation (Rezvani et al, 2011)

Following these six steps will help you to develop a winning strategy.

Mission and vision statements are clear, concise, inspiration phrases that provide direction for the laboratory and its employees (Mindtools, 2013). Your mission and vision statement will guide you during decision-making. Each decision should align with your mission and bring you a step closer to your vision.

Even though they’re grouped together, they serve a different purpose. Mission statements define the purpose of the business, while vision statements provide the values and beliefs of the business, how it will perform its mission, and what the business will look like if it reaches its long-term goals (Mindtools, 2013; Inc., 2013). After creating a mission and vision statement, share it with your employees and customers. This will encourage you and your employees to live up to the statements.

Use the SMART principle of goal setting — Specific, Measurable, Attainable, Realistic, and Time-bound.
When establishing each goal, keep the mission and vision statements in mind to ensure continuity. Create short- and long-term goals during the goal setting process, and remember that achieving each short-term goal will add up to the long-term goal.

The next step in the process is to perform a SWOT analysis. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. This will identify strengths and weaknesses of the business, and the environmental opportunities and threats. This analysis can be done by only the owner or by the entire team. After identifying the strengths and weaknesses of the business, use that information to exploit or defend against the environmental opportunities and threats.

Once the direction of the business is known, what goals need to be achieved, and where the business stands, it is time to formulate a strategy. A well developed strategy will give the business a competitive advantage. Strategy formulation consists of three parts — defining position, trade-offs, and fit.

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A business can define its position in three ways — variety-based, needs-based, and access-based positioning (Porter, 1996).

· Variety-based – Focuses on the products and services offered instead of the customer segment. An example of this is a lab that provides only fixed restorations. It would only be able to satisfy the fixed need of dentists.

· Needs-based – Focuses on the customer segment by satisfying all of their needs. Targeted customer needs could be price conscious, full-service needs, or exemplary customer service and support. For example, a full-service lab has the ability to satisfy all of the fixed and removable needs of its dentist customers.

· Access-based – Focuses on targeting a customer segment that has the same needs as others, but the means of reaching them are different. There is usually a geographical separation between the business and the customer. Continuing the lab example, it would be able to reach out-of-town dentists using digital technology or shipping carriers.

Creating a successful and unique position will attract imitators. Trade-offs help protect against imitation and create sustainability. A trade-off means “more of one thing necessitates less of another.” For example, a dental office that wants to provide economical restorations to patients will pay less for the restorations, but will give up high-end esthetics.

Fit is an integral part of strategy formulation. Fit is how the business’ strategy is interwoven throughout the entire organization and all of its processes. Every aspect of fit must be in place for the strategy to work. Interweaving fit through the business’ activities leads to a strategy that cannot be imitated exactly. A strategy-specific fit is highly valuable because it increases position uniqueness and strengthens trade-offs.

Fit should have consistency and optimization of effort, and should reinforce activities (Porter, 1996). Consistency means creating uniformity throughout all of the business processes. A dental office that is positioned to sell economical restorations but charges high prices does not have consistency between strategy and price structure. Reinforcing activities means how the business operates in relation to the position it has chosen.

For an office to provide economical restorations, all of its functions/operations (scheduling, supplies, location, etc.) would also have to yield cost savings for the office to stay in business. Optimization of effort is the ability to get the most out of every activity. Coordination through all activities that reduces redundancies and minimizes wasted effort is the basic types of effort optimization (Porter, 1996). An office that provides economical restorations would have to become a master of scheduling and time management to increase the number of patients seen every day.

A well-developed strategy will contain three key elements — sustainability, resilience, and flexibility.
Sustainability means the strategy can withstand the test of time. Strategies should be designed for at least 10 years. Frequently changing a business’ position creates confusion and disrupts all of the systems in place. Sustainability also refers to the inability to replicate the strategy by imitators.

Resilience refers to the ability to predict and adjust to market trends before any devastating impact to the business (Hamel, Valikangas, 2003). Resilience is being able to turn threats into opportunities. Digital dentistry was once, and may still be for some, a threat that has been turned into opportunities for many dental offices and labs.

Flexibility is the action of successfully adapting to environmental change (Combe, Greenley, 2004). Strategic flexibility offers a competitive advantage that is difficult to imitate since it derives from management’s decision-making.

Next is implementation. Implementation is putting into action all of the work done in the previous steps. To effectively implement your strategy there must be communication, the right people in the right positions, adequate resources, and the right order.

Evaluation is the last step of strategic planning. This step lets you know if all of your hard work has paid off or not. If not, flexibility in your plan will allow for you to make adjustments to the strategy without having to completely start over.

To set you apart from and help you gain a competitive advantage over others, you need a strategic plan. This will allow you to constantly move the business forward, even during turbulent times. Do not get lost in the day to day running of the business; spend the time to create the business’ future.

Once again, what’s your strategy?

Shane Palm is the founder of Palm Dental Solutions based in Colorado Springs. He completed his initial lab training in 1996. While serving 10 years of active duty in the Air Force, he earned his associates degree in Dental Laboratory Technology from the Community College of the Air Force, a Bachelors of Science in Management from the University of Phoenix, and his CDT in Crown & Bridge and Ceramics. Following the Air Force, he worked in several laboratories in different positions and completed his MBA at the University of Phoenix. He attended Lee Culp's Anterior Smile design and Natural Posterior Anatomy courses. He has taught a hands-on course during the Air Force's annual CE workshop for dentists and lab technicians. He has authored over 15 articles for the Journal of Dental Technology, and continues to contribute on a regular basis. Visit his website at palmdentalsolutions.

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