Table of Contents Page
Executive Summary 1
Company Information 1
Competitive Analysis 2
Strategy and Implementation 4
Executive Summary
will be considered as an innovative firm focused on catering on personalized home care for the elders. It will be the pioneering firm in Kowlon and perhaps the only specialized elderly service provider in Hong Kong. Due to political and sector endowments, establishing the firm will be profitable in both short and long-run needs of shareholders. The firm is positioned to offer quality service coupled with its personal and friendly orientation to clients. Backed by professional advises and modern technologies, its 300 initial in-home assistants are assured to embody the philosophy. Financial projections show that the new company will have positive net at the end of its initial month that can serve as the benchmark to measure its potential.
Company Information
Goals – The goal of the firm is to maximize shareholders wealth by relating its operations to customer-driven products and services. Ownership – It will initially be funded by a HK million coming from investors, although debt financing could be resorted in special pre-determined cases, which will form a corporation. Key Financial indicators – Value creation for shareholders will be based primarily on return on equity and investments while business performance will be a factor of total and operating margin, return on assets and non-operating revenues. Location and Facilities – The firm will be located in Kowloon City to penetrate the concentration of local professional and employees from the urban area. This will also serve the firm’s headquarters confined in a three-floor building. Unique Product Feature – The firm will be known to provide quality companionship service which embodies its core value of “Loving to touch a person’s life.” Servicing – The service provision is available in-house from 8 am to 8 pm Monday to Friday while weekend service will be provided in negotiable terms.
Competitive Analysis
Industry Analysis – The presence of top of the world’s pharmaceutical, medical and equipment companies in Hong Kong supports the quality of services in health care home sector especially in research as well as post a threat as they are substitute products capable to compete in the sector. The sector is also pre-dominantly operated by unorganized charitable institutions which will pressure emerging for-profit firms (like us) to compete not in price but on quality. In the political side, the government funding will inevitably resort to the private sector in the future to be able to operate a free market for the health care sector and reduce the tax burden of the public to finance its health subsidy. This serves as an opportunity for emerging businesses to start today at the hype of projected rise of the ageing population distortedly growing with a constant tax base.
In the contrary, the increasing quality provided by the government-created Hospital Authority poses a problem in our competitive position. The country is presently ranked as the second longest life expectancy in the world due to improved conditions of hospitals and equality in treating rich and poor. On the other hand, 45% of inpatients are those 65 years old and above that suggest opportunity in our value-creating value on emotional alleviation which these public hospitals relatively in deficient due to their abundance. Since outpatient level is dominated by the private sector, there will be a reinforcing advantage that emerging businesses in the sector will obtain priority choice from the public.
However, the government still relies on non-government organizations in providing residential care for the elderly less from for-profit firms. This bottleneck can somehow be mitigated by 2005 forecast of 2.3 million 60+ population of the country. In addition the percentage of elderly population entering residential care exponentially grew from 3.51% in 1998 to 5.91% in 2003. This is to exclude the 60 to 65 bracket. Nonetheless, the fact that 97% of elderly under residential care with NGO assistance had been given financial support by the government as well as provided them the chance to select their private home. Due to questions of efficiency and tax expense issues under the present scheme, the government might support formally the entrance of private firms in the sector.
Market Analysis – In 2003, government had 12,000 residential places while the private had 47,000. In 2025, the government (based on our projections) may transfer the burden to the private firms shifting the demand of health care home service to the private firms approximately at 150,000 levels. Market Segmentation – The market is basically composed of widow/ widower and existing partner segment which will be the primary focus of the firm as the service quality is proportionate to the emotional standing of the patient. Other segments include bed-ridden and walking patients, alone and with family member patients, among others.
Strategy and Implementation
Marketing Aspect (Positioning) – The firm will sue on differentiation strategy as its business model. It will not compete in price because the government hospitals as well as NGO inpatient/ in-house servicing already established themselves in the aspect of price leadership. What will the company provide are value-creating services that highly prioritize the emotional, psychological and social aspects of its clients. It will target the common mistake of pricing strategy which is quality. Not only quality but also the natural bonding that our highly trained workforce can induce will automatically replaces the issue of money to issue for companionship. In this aspect, our service will be deemed an integral part of life by our clients that can segregate us from the profit-based competition and ultimately enhance our intangible assets like reputation.
Branding – The firm will be the pioneer in showing to the industry how we deploy our own concept of “the next big thing” that will eclipse vague business models in the sector. will be associated with companionship with a trust. The firm will use preceding questions in its advertising campaigns such as “Need a listener?”, “Want us to bring you in outside your doorsteps in a busy day?” and “Why alone?” followed by its name. This suggests reliable and humanistic approach in our service. These word associations can easily impart our attributes, benefits, values and personality while the company symbol of elderly man and woman will imply our target market.
Marketing Mix – The firm provides in-home companionship, meal preparation, light housekeeping, errand service, grocery shopping, transportation services, laundry and linen washing, periodic review of the family, among others. Clients can customize the service under negotiable payments and schemes. Counseling (one of our core businesses) is conducted in Kowloon headquarters that also serve as social interaction of the clients with one another although the bulk of the service is done in-house. Promotions of the company are mostly related to motivational and self-esteem programs particularly for bed-ridden/ wheel-chaired clients. For example, a patient who can formulate twenty jokes a day (recorded in the employee’s tape recorder) will receive freebies from the firm like going to the city park free of transportation charges.
Sales – The intense growth of the sector will happen twenty years after its introduction. However, the initial stages require aggressive advertising and promotions including government lobbying to organize and recognize the private sector. As the projection shows, the firm can gain access to the market since hospitals in Kowloon City like (specialist), (psychiatric) and (outside Kowloon) have lack certain aspects (either geographical or operational) compared to . In addition, diffusion theory is applicable in the introduction stage because of the pioneering service of the firm that can entice the excited market. At the end of the first year, sales are expected to be derived on the 5% market share of the private sector which is equal to 2,350 heads (47,000 x 5%). At the end of the third year, it is expected to reach 10% or 4,700 (47,000 X 10%).
Management Aspect (Organizational Structure) – The firm will adopt a functional form of organizational structure suitable for differentiation strategy. The CEO is in direct link with head on operations, human resource, technical/ specialty department, finance and marketing/ sales. They also form the management together with occasional presence of advisory board from outside organizations and even government agencies. Operation and Process – Each department head will be responsible to operational actions/ responses of their workforce while tactical and strategic ones are subject to CEO and other necessary personalities’ approval. Employees are guided with standard operating procedures including training in psychological therapy. These SOPs are categorized as strict, directory and value judgment confined with the missions of the organization. Disciplinary actions are attached depending on the degree/ category/ nature of the any deviations.
Manpower and Funding Requirements – Applicants for in-house attendants are placed under strict evaluation before hiring to test their patience, knowledge and motivation in the work. They should have a related vocational or bachelor degree, pass physical and emotional examinations, among others. This strict screening, however, is compensated with HK,000 per month in normal working hours, overtime pay during weekends and incentives for good performance. The workforce will be classified into two groups – the walking and non-walking. Assuming that the ratio of the patients will be 80:20 respectively and the walking category is assumed to require the service at least once a week (an employee to five clients per week) while the non-walking category requires at least three times a week (an employee to two clients per week). The total manpower should be 611 in-house assistants based on a 2350 projected demand. However, the firm will only hire 300 employees initially.
Financial Indicators – Projected Profit and Loss (Initial Year in a Monthly Basis)
Revenues
Amount (HK$)
Expenses
Amount (HK$)
Operations = (1880 walking x 300 per day x 4 days a month) + (470 non-walking x 500 per day x 12 days a month)
5,076,000
Salaries (assistants) = 300 initial employees x 9,000 per month
2,700,000
Non-Operating (Transportation, Check-up Services)
1,015,200
Professional/ Specialist Fees
1,000,000
Incidental (Portfolio Investment, Market Securities)
507,600
Allowance for Contractual, Overtime and Incentives
500,000
Administrative and other Operational Expenses
300,000
Variable Costs (Fuel, Depreciation on Equipments)
100,000
Advertising/ Publicity
100,000
Others (Fund Management Fee)
100,000
6,598,800
4,800,000
The firm will have initial monthly net income of HK,798,800. This will serve as a cash flow basis for the three moth period. For the first year, the firm will incur a constant growth of 1% per month. On the second year, the reference initial year is the last month result of the first year and consequently incurs 2% growth monthly. Lastly, on the third year, the reference year is the last month result of the second year and consequently incurs 3% growth monthly.
Credit:ivythesis.typepad.com
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