Mktg 2127 Final Paper - Home Nursing Services

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Aggressive competition

Competition for total health coverage is emerging as demand for services dominate the industry. Smaller firms are able to offer services at a fraction of the price of not for profit firms, and do so at a profit. This means that if a not for profit came into the marketplace and offered a substitute product the other firm would be able to slash its prices even further creating a shift in demand and trying to keep the competition out.

This business plan was already successful in two surrounding large cities, and it won’t be long before the business plan is adopted by another firm and implements itself in the city where HNS operates.

This will impact HNS has it needs to be able to compete with other firms while gaining more market share. Product differentiation will help at the beginning when HNS fills a void in the clients demands, but will have to compete on another level when new firms enter the marketplace. HNS can position itself to deliver top notch personal customer service, and build lasting relationships with clients as a way of succeeding.

Section 4: Strategic Alternatives for Solving Problems

Alternative # 1

Expand HNS and offer less skilled, at home comfort services

Advantage:

HNS can be one of the industry leaders when incorporating and providing total health care services to patents in order to fill a void in the industry that is desperately needed. NHS would be able to set the standard as to what people and patients can expect with services, and can set the bar high for any new entrants into the marketplace.

HNS will be able to differentiate its services from other firms in the industry as being all inclusive, or complete, and set pricing standards, as no other firm has created this market niche in their city currently.

Disadvantage:

NHS would create a new market niche where entering the market is easy and competition is fierce. HNS would have to make sure that it does not over price their services where a new entrant would be able to undercut the price.

The government may see this new market niche as a revenue avenue and require regulations and or even licensing fees be paid or administered. This could prove to be costly to any firm, as they would have to implement all regulations before a certain date in order to continue offering services.

Cost/Benefit Analysis:

The startup costs to this alternative would be great as many things needs to be done to get started, including setting up services, hiring employees, and creating clients. After, when a client list has been created, costs will lessen and overtime revenues will outweigh the costs.

Alternative # 2

Convert HNS from a not-for-profit to a for- profit entity

Advantage:

NHS would be able to compete with most other industry firms on a level playing field. NHS would also be able to create the financial blanket needed in order to help with industry fluctuations in demands for services, as it can slash its prices to compete. This will help NHS expand the firm, and depending on how large the firm is, may not require approval from a board of directors.

Disadvantages:

This could prove to be NHS’s undoing as they may lose consumer confidence do to the change in policy. Many people believe that most health care firms should remain as a not for profit in Canada as no one should benefit from someone’s health issues.

Cost/Benefit Analysis:

The only costs which would need to be considered with this option would be the lawyers’ fees needed to change organizational structure, if it can be completed at all. The business is already matured, and so the business can continue to generate revenues as expected.

Reorganizational costs may also impact this firm, as the firm will need to lower its costs in order to compete with lower priced firms.

Alternative # 3

Increase advertising for current services

Advantages:

HNS only advertises by word of mouth and by a listing in the local yellow pages. Increasing advertising suggests that the firm is differentiating itself within the marketplace. The fact that HNS is a nonprofit means that its likely to gain more attention of private investors who wish to invest as a way of mitigating some corporate social responsibility.

Disadvantages:

HNS has no money to currently increase advertising. Advertising is expensive, especially if a firm wishes to reach many people in a small amount of time.

More solicitations would have to be made in order to secure funding for additional advertising. This would require more time and resources which HNS is in short supply.

Cost/Benefit Analysis:

The costs to this option are great. This firm would have to spend at least 10% of its operating revenues to advertise properly in order to create a larger client base.

Section 5: Selection of Strategic Alternative and Implementation:

When examining the five alternatives presented above, the evaluation below shows that the best option for HNS would be to expand its services and offer total health care. (Alternative 1).

Evaluation of Alternative 2:

Changing organizational structures would give the firm a bad reputation within the healthcare community, and could prove detrimental to its overall ability to effectively operate.

Evaluation of Alternative 3:

Increasing advertising through contractual relationships or online may not give HNS the revenue stream it is looking for.

While examining the facts stated in the case, HNS has a wonder idea to expand its business into segmenting the market and offering a service that would meet consumer demands. Not only has no other firm created this market niche yet, HNS can be in the industry leader and set the standard as to what total health care is.

Implementation