MBA Programs: Business Plan Proposal

Executive Summary

Purpose of the Plan

The main aim of this plan is to outline a start-up MBA program targeting the UK, China, and India Markets. The name of the proposed University will be London MBA School which will be located in southern London. The major activities of the University will be grouped into four categories at the beginning:  accounting, business administration, finance, and investments. This plan aims to be a solid basis for the pursuance of the MBA programs that will guide the operations and management of the University. It will also serve as a tool to acquire financial funding for the University.

University descriptions

The location of the University will offer advantages like high demand, security, good infrastructure, area busy with other business activities, and good return of investment. Among those short-term goals of the University, it will be aimed at increasing its revenue by 10 -15% in three years and employing 20 lecturers within 2 years. The long-term goals of the University are to open new branches after 3 years in India and China. The University is aimed at offering quality MBA programs to global students.

Marketing plan

Through research carried out in London the investor identified some of the students that will be interested to pursue MBA programs. The University shall face competition from universities in the UK offering the same services. The education system is said to be generating approximately £ 20 million in revenue in London Universities alone per year. We have done comprehensive research on both its strong points and its weakness. The University plans to:

  • Improve the work on the threats in the SWOT analysis and eliminate the weak spots in the competitors
  • Ensure and maintain good student relations
  • Play a smart and creative to overcome the competitors tactics
  • Invest in the lecturers to ensure talent retention poaching from the competitors.

The University has identified three market segments that will be the target market of the MBA programs, Indian students, China, and the UK. The University will use various communication tools for example website information and brochures to advertise to create more awareness about the MBA programs.

Organization and management plan

The University shall head by the proprietor assisted by assistants. Further employees will be assigned duties in their areas of specialization to promote efficiency in service delivery. The proprietor will ensure that the objectives of the University are achieved.

Operation Plan

The University needs a lot of money to start its operation. At the start, the university will rent premises and books that will be required daily while others will be acquired later. This plan is flexible to change through its organizational plan.

Financial plan

This forms the most integral part of the University. The pre-operational costs will take a total amount of £ 600,000. The working capital will be £ 150,000. The revenues of the whole year will be £ 680,000 with a total cash inflow of £ 655,000. The total expected expenses at the end of the year add up to £ 450,000. The university will get a total net profit of £ 230,000 at the end of the financial year.

Introduction

The changing business climate all over the globe is demanding more and more business leaders and administrators. For a person who has a vision of setting up an international business, it is crucial to acquire hands-on experience before embarking on such a project. Having acquired basic experience, it has become apparent that it will not be enough to guarantee success.

This university will offer Global MBA Programs with a principal focus on the management of corporate. The university should be able to bring together people from different cultures thus bringing the international community together. This university will be able to bring these factors together.

London MBA School

London MBA School will attract many students to its programs due to their admirable and attractive programs. Many students will be motivated to join the London School of MBA to pursue MBA programs because of its advantages. The university will be strategically placed as well as well marketed for international and local universities. The university will provide a good research department in the areas of banking and finance. This will act as a persuasion factor for many students to join London MBA School. The records of teaching and research in the fields of MBA will not only be excellent but also superior in terms of quality compared to all other Universities in the UK offering similar programs.

Most Universities that are committed to offering quality academic programs to the satisfaction of students always do so at high costs that most potential students are incapable of meeting. However, at London MBA School the quality remains intact; uncompromised while the cost of living is also relatively low especially in the southern part of London. With the relatively low cost of living one would thus prefer to study at London MBA School and gain the much-needed quality training and competence that meets global market demands of professional human resources. The dynamism of the worlds economic and institutional structures calls for the professionalism that is embedded in practicality and knowledge founded on current issues in business management.

At London MBA School, MBA courses are specially designed to meet the academic needs of various students. Such students could be having relevant business backgrounds wishing to further their education in their areas of interest and gain competence in the management field (Sutherland & Crowther 2006, p. 73). Therefore the institutions curriculum, commitment to research, the conducive and student-friendly environment, and expertise and experience of lecturers in the business field leaves one greatly agitated and persuaded to learn at this University. The curriculum for MBA is structured and the course instructors are famous and renowned for their previous written articles and authors of great books that form the literature for the course work. It is thus this great competence, professionalism, and experience of the professors and lecturers that motivated me to consider this University (Kreitner & Kinicki 2010, p. 12). It is the culture of the Universitys professors and lecturers to build close relationships with the students. This helps students in finding solutions to various challenges in the course of their studies, projects and gives reassurance to students.

MBA programs Overview

The MBA program will help international students to acquire knowledge relating to international business management. The process of imparting knowledge will involve the behavior, competencies, and personal values of international students (Ziegler 1995, p. 34). Our MBA programs will meet international standards as one of the best MBA programs in the world. The program will operate in partnership with various universities in China and India universities. Though this school is one of the best European schools, the MBA program would attract more customers if it ensures a continuous operation of the program throughout the year in different locations (Ziegler, 1995, p. 45).

The main purpose for international students in attending MBA programs at London MBA School is to attain three core values. For instance, they want to learn the style of the different cultures of management, understand the international business environment and their way of reasoning and reacting to situations, and their mode of communication. All these actions greatly influence business either negatively or positively. International students are interested in working for multinational Corporations that originally come from the west hence seek to understand the requirement to qualify for positions available in these corporations. In addition, the students are open-minded and aim at grabbing opportunities that enhance the development of their skills at the global market (DeAngelis, 2008).

London MBA school programs will act socializing ground for students to understand the core values of each culture and the values of leadership in some cultures. The program develops trust and loyalty among its student thus promoting the possibility of productive interaction even after the students have left the school. This will lay a ground for the student to come together in the future as an Alumnus for purpose of developing competent leadership at the global level.

The students who will pursue the MBA program in London MBA School will be thought to be creative and analytical, skills that are required in the modern internal business (Hartel 2005, p. 75). The global market demands of human resources do suit individuals who are tailored extrinsic The ability to relate the banking and finance concepts to the concepts in other disciplines like economics is greatly enhanced by the deep learning approach.

The deep approach to learning enables a learner to actively engage with programs ideas, concepts, and theories aimed at assessing (Rosenberg 2006, p. 43). The contents, coursework, and research work in MBA would be easy to synthesize through and understand (Ziegler 1995, p. 54). This is so because the deep learning approach that is my preference is greatly complemented by the program modules and the lecture approaches of the professors and lecturers at London MBA School. The university academic staff works in collaboration with students to help the student acquire accurate and updated information and knowledge in their area of specialization (Ohisson 2010, p. 28). The deep learning approach would thus support me and create an enabling environment for me to articulate my needs to the interactive course instructors at the University. This is because the approach enables me to link up with other students in the same course for group discussions and further critical examination and analysis of the theoretical concepts and principles discussed in class (Weigel 2002, p. 112). The skills and knowledge acquired through deep learning remain inherent in ones learning process (Ziegler 1995, p. 55).

Mission Statement

London MBA Schools mission is to bring to market the best MBA programs to the market. High standards of quality and excellence will be established at the university.

London MBA School will devote 2% of its profits to local activities. London MBA Schools objective is to keep things simple. The core internal mission statements are:

  • How well do students want to be treated?
  • What will make students join our university

Keys to Success

London MBA Schools keys to success will be building on its internal brand recognition to provide its future university complete support. Market penetration strategy combined with image programs differentiation will be one of the universitys key success factors. Creating strong student values by instilling a student-driven approach to recruiting lecturers, and by maintaining a culture of an open, friendly atmosphere will no doubt create a casual fun-loving image.

Target market

The university will target students from various countries but, to begin with from India, China, and the UK. These three countries require internationally trained workers because of the growth rates and multinationals those are operating in their countries (Griffin and Moorehead, 2010). These segments are a special group of students, a specific geographic area, or a particular service line. After conducting research about the above-discussed aspects and gathering adequate and necessary information, marketing strategies have to be designed, after the program development and the analysis of marketing opportunities. Specific strategies suitable to the target market have to be developed, even while the service enters the different stages of its life cycle. Strategies that are thus developed at these stages should be so effective that competitive advantage is always sustained.

SWOT analysis

This analysis avails information that matches the universitys potential to be competitive in the market (Smith and Chaffey, 2005).

Strengths

One of the strengths the university should consider is the resources at their disposal. The owner has wealth of experience that will enable the university to compete well in the market. In addition, the university offers unique programs that will target students from Asia and UK. London MBA School will be one of the pioneering universities to offer only MBA programs in the area

Weaknesses

Simply refer to the absence of certain strengths and include lack of patent protection, poor reputation among students, and high-cost structure. The universitys main weakness is that it has remained focused on only MBA programs which will limit the market. Although specialization can be considered as an important strength for any university, the potential problem lies in the lack of diversity especially should competition starts to come in. Other weaknesses include financing the start-up and obtaining further working capital (Ries and Jack, 2000).

Critical Issues

The university brand is in the development stages and its success will depend on the nature of service delivery to the market. some of the critical issues will involve empowering lecturers to make informed decisions as if theyre owners of the university. The

Opportunities

Are considered beneficial outlets that lead to profit and growth. They include a students need, incorporation of new technologies, favorable regulations, and removal of unnecessary stringent trade barriers. China and India are growing very fast and they require educated people (Mitchell, 1993).

Threats

Do lead to poor university performance and include shifts in students away from our programs and an increase in completion. A good understanding of the strengths, opportunities, weaknesses, and threats allows for an informed analysis of the university (Kotler and Kevin, 2006).

PEST analysis

Being the largest global University, London MBA School will focus on the international environment. The universitys position in the PESTEL analysis is very strong in terms of the economic, social, technological, and environmental factors, but its standing in the political and legal factors is very weak. Any other involvement of the university in either of these factors would result in them losing its market share in the world (Cross & Miller, 2008; Kotare and Helena 2004).

Management and Ownership

The university will be managed by the owner who will oversee the day-to-day operation. The owner is an experienced educational manager, who has over 20 years of experience in education and holds an MBA degree. The owner has extensive knowledge in evaluating and implementing marketing strategies.

Market Needs

At the moment there are many universities in London, but the market is dominated by the London school of management. There exists a need in the market for a specialist university that incorporates the MBA students concerns without compromising the excellence. The Universitys main aim is to respond quickly and deliver quality education to local and international students who are looking for higher education. The university introduces its services by targeting all people with the ability to join a university and willing to increase their educational background. The education services that are offered by the university needs the students needs by covering almost all faculties, being delivered by the best lecturers using the current modern technology innovations. The university is working in collaboration with other international institutions in marketing itself as a one-stop university for international students. They provide quality education in an efficient way to all students from English-speaking countries. the specific target markets initially were London and the environment however due to internationalization and globalization the university has evolved to include all students from other parts of the world with enough income to meet the fee charged by the university (Clow, 2009).

Marketing mix

The marketing mix plays an important role in formulating and implementing a marketing strategy for companies. 4 Ps have been developed and extended to the 7 Ps with the appearance of People, Process, and Physical evidence on to the price, promotion, and place. It provides an effective strategic framework for changing different elements of a universitys product offering to influence the demand for services within the target market (Kotare and Helena 2004).

Service: the university will offer MBA programs only

Price: the university will charge a price which is lower than their competitors

Place: the university will be in southern London.

Promotion: internet and brochures will be used in marketing

Financial Analysis

This section will discuss the initial start-up costs, financial assumptions, and revenue forecast. The initial cost will cover all expenses in the first month of operation. The financial assumptions section will be the basis for the revenues forecast and the achievable net gross and net profit.

Funds Required and Use

The owner will look for investors to inject £ 600,000 to cover the initial operating expenses of the university.

Conclusions and Recommendations

As part of business usual procedures, London MBA School needs to determine their financial needs and engage in advantages. Advertising will be a key factor in the success of the MBA programs. It is, therefore, necessary to invest in advertising to maximize the potentials of the university.

List of References

Clow, E. 2009. Integrated Advertising Promotion and Marketing Communication. Chicago: Pearson Education.

Cross, F. B., & Miller, R. L. 2008. The Legal Environment of Business: Text and Cases  Ethical, Regulatory, Global, and E-Commerce Issues. New Jersey: South-Western College/West.

DeAngelis, T. 2008. Petersons MBA Programs 2009, New Jersey: Petersons.

Griffin, W. & Moorehead, G. 2010. Organizational behavior: managing people and organizations. Mason: South-Western/Cengage Learning.

Hartel, C., Zerbe, W., & Ashkanasy, M. 2005. Emotions in organizational behavior. New Jersey: Lawrence Erlbaum Associates, Inc.

Kotare, M. & Helena, K. 2004. Global Marketing Management. New York: John Wiley and Sons

Kotler, P., & Kevin, L. 2006. Marketing Management. New Jersey: Pearson- Prentice Hall

Kreitner, R., & Kinicki, A. 2010, Organizational behavior. Boston: McGraw-Hill/Irwin.

Mitchell, A. 1993. Advertising Exposure, Memory and Choice. New Jersey: Lawrence Erlbaum Associates.

Miner, J., 2007. Organizational behavior, from theory to practice. New York: M.E. Sharpe.

Ohisson, S. 2010. Deep learning; how the mind overrides experience. Cambridge University Press: Cambridge

Ries, A. & Jack, T 2000, Positioning- The Battle for Your Mind. New Jersey: McGraw-Hill

Rosenberg, J., 2006. Beyond e-learning: approaches and technologies to enhance organizational knowledge, learning, and performance. San Francisco: Pfeiffer.

Smith, P., & Chaffey, D. 2005. E-marketing Excellence: at the Heart of E-business. New York: Butterworth-Heinemann

Sutherland, P., & Crowther, J., 2006. Lifelong learning: concepts and contexts. New York: Taylor & Francis Group.

Weigel, V., 2002. Deep learning for a digital age: technologys untapped potential to enrich higher education. San Francisco: Jossey-Bass.

Ziegler, W. 1995. Ways of enspiriting: transformative practices for the twenty-first century. Denver: FIA International LLC.

Progressive Corporations International Business Plan

The proposed business plan presents an entry strategy into the Belgian market and an effective marketing plan for penetration and sustainable business for the auto insurance policy product. This means that the company should select an effective internationalization strategy for business survival and sustainability in the short and long term. The plan involves a comprehensive business environment analysis, financial estimation, and a focused marketing plan. The report concludes by presenting recommendations for effective business practices.

Local Alliance Partner and an Entry Strategy

Belgium as a Product Market and Site for Value-Chain Activities

Belgium has a relatively strong score in the Hofstede insights in terms of indulgence, uncertainty avoidance, individualism, and power distance. The Hofstede score ranges between 54 and 94, which is an indication that the country has a high GDP, stable living standards, and an effective economy (Arnold, 2004). Belgium has a strong legal system and an organized business licensing procedure. There are stable labor-related laws that protect business and laborers in equal measure. However, these laws are not as strict as is the case in the US where Progressive Corporation has excelled for more than three decades, and thus, the company is positioned to operate smoothly without any major hindrances. The ethical and cultural standards in Belgium encourage good living, courtesy, and honesty in business practices and general interactions. This means that the country has a population of strict citizens who would not tolerate business practices that are perceived to be deceitful or immoral. Cultural and ethical standards are risks to Progressive Corporation, especially in an event of public lawsuits. Over the years, the company has experienced a public backlash in the US related to claim handling. In order to manage this risk, Progressive Corporation should consider being transparent and engaging a successful business partner of Belgian origin to avoid the challenge of facing the backlash associated with viral legal suits.

The external business environment in Belgium is attractive for Progressive Corporation. While the digitization of services may reduce the need for a complete relocation, some activities in the value chain have to be moved to the country. The claims department, payments processing, and some customer service workers need to be relocated to adhere to the standards of the new placement. Some parts of the sales management can also be moved to enhance the understanding of the local market. In order to gain a competitive advantage in Belgium, the company should consider using its strong business position and the attractive auto insurance policy product to quickly penetrate the market. Moreover, the company should make minor adjustments to the current international and local laws to fit into the Belgian context, especially on taxation (Ghemawat, 2001). The smooth transition into Belgium could be facilitated by a strategic alliance with an insurance company that does not offer the same product.

Profiling the Potential Partners

Progressive Corporation could consider alliances with strategic insurance companies already in the Belgian market such as Allianz Belgium, Almarisk, and Belfus. The Allianz Belgium is a company that concentrates on the asset management and general insurance. The company has been in the market for more than 25 years and is currently one of the leading underwriters. The company has operations spread across Belgium with a strong financial standing and an estimated market share of 4% (Barbara, Cortis, Perotti, Sammut, & Vella, 2017). The other company that might be considered by Progressive Corporation is the Almarisk NV. Founded in 1980, the company has been active in the risk management and insurance brokerage services within Belgium. The firm is headquartered in Ghent. The company has a strong market presence and stable capital structure. Over the years, Almarisk NV has managed to penetrate the market and is currently valued at $13 billion (Barbara et al., 2017). The third company Progressive Corporation should consider an alliance with is Belfus. This company concentrates on the financial service insurance and has been in the market since 1996. The business is owned by Belgian State and controls 12% of the market (Barbara et al., 2017). The firm is the most stable insurance company in Belgium. The government currently owns a 25 % stake (Barbara et al., 2017).

Selecting the Ideal Partner and Benefits of the Alliance

The ideal company would be Allianz Belgium because of its interest in the real estate and general insurance services. This will avoid a potential conflict of interest since Progressive Corporation will be viewed as a strategic partner promoting the business growth for Allianz Belgium. At present, Allianz Belgium only offers a limited motor insurance policy. Therefore, the input of Progressive Corporation will be welcomed by Allianz Belgium because it is placed to gain through increased business by financing the purchase of this product. Specifically, the unique auto insurance policy could be introduced and quickly expanded in Belgium through the well-developed Allianz Belgiums value chain network (Arnold, 2004). In addition, Progressive Corporation is positioned to gain from the market experience of Allianz Belgium, thus, avoiding potential risks associated with entering into a new market.

Pros and Cons of Market Entry Modes and Recommended Mode

The main entry modes in Belgian market that could be pursued by Progressive Corporation are joint venture, contractual agreements, and wholly owned subsidiaries. The joint venture approach involves entering into an agreement with another company already in Belgium in order to smoothly penetrate the local market. In the case of Progressive Corporation, the joint venture strategy will involve partnering with the proposed Allianz Belgium under a negotiated share from sales and operational networks (Thomson et al., 2013). The benefits of joint ventures include risk sharing, joint product development, and ease of conformity to government requirements.

However, conflicts might occur as a result of mistrust and asymmetric business modeling in addition to cultural clashes or performance ambiguity (Arnold, 2004). The other entry strategy is the wholly owned subsidiaries in the form of acquisition. For instance, Progressive Corporation could consider acquiring Allianz Belgium. The benefits include quick market entry due to the inheritance of an already developed network. However, this option is very costly and laden with challenges such inability to transition into the acquired business model (Arnold, 2004). The last option is the contractual agreement with the Allianz Belgium outlining the operational module and expectations from each partner. This strategy is laden with benefits such as affordability, flexibility, and progressive management of the business operations. However, failure to honor the contractual agreements might result in the complete collapse of operations since it is dependent on the goodwill of the third party.

Based on this analysis, the ideal entry strategy would be a joint venture with the Allianz Belgium to ease the market penetration process and facilitate quick and stable business operations in Belgium. Since the Allianz Belgium has been in the market for more than 2 decades, the joint partnership alternative would give Progressive Corporation optimal results and cushion it from unpredictable market risks (Thomson et al., 2013). Moreover, the US-based company will have the upper hand in monitoring the market entry and penetration since the joint venture deal will create an environment for close supervision. In addition, Progressive Corporation would save a lot of resources that could have been spent in developing a new value chain network and general business infrastructure. Thus, the business will save time associated with the process of acquiring licenses and meeting other legal and economic requirements.

Financial Requirement for the Entry Strategy

Under the proposed joint venture entry strategy, the estimated financial investment required by Progressive Corporation includes licensing fees, search, partnership goodwill, and direct investment (see table 1).

Table 1. Estimated financial investment in joint venture entry.

Financial Requirement Estimation Justification
Licensing and other legal fees $50,000 The legal fees and other requirements involve the acquisition of multiple licenses and payment of fees to different relevant agencies
Market research $10,000 Necessary for the background information and trial before full entry
Partnership goodwill $1,000,000 To facilitate and protect the joint venture agreement
Developing infrastructure $2,000,000 Developing infrastructure such as offices, acquiring fixed and flexible assets, and miscellaneous
Labor and other factors of production $2,000,000 Employing about 500 personnel over a period of 1 year

Organizations Degree of Fit with Belgium

Making the Strategic Alliance Work

In order to make the joint partnership with Allianz Belgium work, it is important to merge the laws governing the two businesses with Belgian commercial laws. The legal merger should address taxation, accounting reporting standards, and a joint advisory board. The ideal legal entry for Progressive Corporation into Belgian market would be a joint advisory board to ensure that the companys operational model is aligned with the local laws (Ghemawat, 2001). This is necessary to ensure that taxation laws and other licensing regulations in Belgium do not have negative impacts such as avoidable legal suits, government interference, and conflict with the regulatory authorities.

Operational Roles and Activities of Partner

Under the joint partnership model proposed, the Allianz Belgium will be assigned the role of performing due diligence, expanding the physical infrastructure, and tracking the progress in different regions using their existing network. On the other hand, Progressive Corporation will provide the financial requirements in addition to regulatory or management duties that are unique to the proposed product (Thomson et al., 2013). The proposed dynamic organizational structure is informed by the need to create a self-functioning business management model for short and long term sustainability (see figure 1).

The proposed organizational chart.
Fig. 1. The proposed organizational chart.

The scientific management approach is informed by the need for efficiency and strict compliance with the Belgian labor laws to guarantee constant value addition and tracking the skills of general skill sets. The diverse human resource as a result of the joint venture will guarantee a competitive advantage through a quality service charter. In addition, the use of locals to provide labor resource will reduce the risk of language barrier and effectively fit the business to Belgian employment laws.

Impact of Belgian Culture and Geography on Progressive Corporation

The unique and dynamic Belgian culture and geography will have impacts on Progressive Corporation. The multilingual nature of the country demands additional efforts from the company to appeal to all language groups. Thus, it is vital to introduce products in French, Dutch, and German, along with the English version for immigrants and international workers living in Belgium (Ellsworth, 2002). The documents should also be processed in multiple languages to avoid problems for customers. In addition, the dynamic regional demarcations should be put into consideration to ensure that products targeting each area are aligned with the cultural dynamics (Arnold, 2004).

Marketing Strategy

Target Markets

The customer segments are divided into private and commercial clients (Ghemawat, 2001). The private policy holders consist of owners of automobile used for private purposes. The commercial segment consists of owners of automobiles using their vehicles for business purposes. The ideal customer should be able to spend at least $300 and above as an annual insurance policy. Nearly all families in Belgium are potential customers since more than 75% own an automobile (Barbara et al., 2017). However, the business will concentrate on the youthful and mid-age customers for the private cover and all clients for the commerce policy cover. In terms of geographical location, the potential customers are evenly spread across Belgium. The psychographics of the targeted market includes interest in an automobile insurance cover driven by quality, trend, taste, and general perception (Arnold, 2004). These expectations should be aligned with the proposed auto insurance policy product to ensure that Progressive Corporation effectively serves the customers. The demographic market variables are organized into all genders, ages, economic classes, cultural, political, and religious affiliations (Ellsworth, 2002).

Marketing Strategy

Competitors

The biggest competitors of Progressive Corporation in Belgian market are the state-owned Belfius and ING Belgium. The Belfius has been in the market for more than two decades and has more than six product lines including automobile insurance coverage. This means that the company enjoys full support of the government and has unlimited access to capital funding. In addition, the company is the sole insurer of government automobiles and other organizations aligned to the state. The company has a current capitalization value of 6 billion Euros (Barbara et al., 2017). Apart from issuing insurance policies, the company also finances the purchase up to 100%.

The competitive advantages of Belfius are product diversification, flexible payment plan, and integration of technology in the business channels. Another competitor is the ING Belgium founded in 1972 and has grown into a fully functional diverse insurance provider with more than 1,000 products within the automobile insurance sector (Barbara et al., 2017). The company is currently focused on the automobile, investment, and financial insurance products. The ING Belgiums competitive advantages include a strong brand image, long market experience, affordable products, and stable loyal customer base. In order to survive this competition, Progressive Corporation should consider selling its product as a fully technology-based service that guarantees customer convenience and quick claim payment.

The actual and potential size of the market

The Belgian Insurance Industry is subdivided into five sectors consisting of health, automobile, property, litigation, and general insurance. At present, there are more than 1,000 registered insurance companies and about 20,000 underwriter firms (Barbara et al., 2017). The Belgian industry report indicates that the industry is valued at about 300 billion Euros and the figure is projected to grow to 450 billion Euros by 2030 (Barbara et al., 2017). Over the years, the annual revenue for the industry has grown by 7% with the exception of the global financial crisis of 2009 and 2009 when the industry recorded a conservative growth of 3%. The expanding market is an opportunity for Progressive Corporations market penetration and expansion upon entry.

Market and segment growth

The market for Progressive Corporations proposed product is unlimited since it targets all customers with any automobile. Fortunately, the laws in Belgium make it a mandatory requirement for all automobile owners to ensure their vehicle. This means that the company will have a market consisting of more than 2 million potential customers at the end of every financial year when the law requires mandatory renewal of the automobile insurance covers (Barbara et al., 2017). Thus, Progressive Corporation might benefit by capturing new customers at the point of renewal or owners of new automobiles.

Market and segment profitability

The insurance industry in Belgium is highly profitable because the number of major automobile accidents is less than 10% of the policy holders. This means that claims are relatively low, especially among the private and old customer segments. The highest risk is posed by the youthful customer segment whose claim rate currently stands at 16%. Despite the high business magnitude brought in by the commercial customer segment, the claim rate is below 13% (Barbara et al., 2017). Considering the high economies of scale associated with the insurance business, Progressive Corporation is posited to reach profitability within the first year of operations, if it can get 10,000 policy holders.

Underlying costs and cost structure

The costs associated with providing automobile insurance policy cover include government taxes, payment of claims, and administration. These costs are absorbed by companies in the insurance industry in Belgium. For instance, it is a statutory requirement for all insurance companies to remit monthly and annual taxes to the government besides processing claims within a month. In addition, just like any other business, the automobile insurance firms have to manage the costs associated with running the businesses, especially with regards to the market swings (Ellsworth, 2002).

Distribution systems channels

The geographical terrain in Belgium is friendly and characterized by well-developed infrastructure such as communication, security, and transport networks. This means that Belgium is more or less similar to the US business environment. For instance, as a strategic gateway to the populace European market, the government of Belgium has invested in its infrastructure to attract and retain different investors. Therefore, Progressive Corporation should take advantage of the well-develop distribution systems to institutionalize a strong and effective value chain for reaching the market and tracking feedback (Arnold, 2004). Since the product will be sold and marketed mainly over the Internet, the stable connectivity in Belgium guarantees quick and sustainable market penetration.

Assessing the Characteristics of Progressive Corporation Potential Customers in Belgium

Marketing mix in the country

The primary components of a typical marketing mix are price, place, promotion, and product. In terms of price, Belgian business environment is characterized by an open market where prices are set and regulated by the players. The average price for a similar product offered by Progressive Corporation is $400. The place element involves a well-developed effective distribution network consisting of effective transport and communication channels capable of supporting Progressive Corporations business. The promotion mix in Belgium integrates diverse and effective business marketing and advertisement strategies supported by diverse modern and traditional media channels available to any business at a fee (Barbara et al., 2017). Lastly, the product mix is characterized by diversification and a series of perfect substitutes differentiated by their prices and packages.

Promotional Practices, Pricing, and Branding Strategies

In order to penetrate the market in Belgium, Progressive should consider using traditional and modern media channels to run customized advertisement messages about the product. The ideal promotional strategies would include advertisements, offering discounts, and establishment of a loyalty club to reward repeat buyers. The company should consider using the multiple pricing strategy to create different products from the auto insurance policy product. Through multiple branding it will be possible to create three sub-products sold within good, better, and best price ranges. The ordinary product could be sold at good pricing while the medium product as better pricing (Arnold, 2004). The premium brand could be sold as best pricing. The prices will vary according to the content of the insurance policy. Progressive should consider using multiple-branding strategy to create different products that can appeal to low, middle, and high income clients. The strategy will guarantee product diversification and create an environment of self-competition. As a result, the company will be able to protect its market and annex competitors segments from time to time.

Use of Web Networks and Social Media for E-Marketing

Since the proposed business platform will be supported by technology, it is necessary to integrate e-marketing through the use of social media and search engine optimization (SEO) for Progressive Corporations website. The use of social media will target to recruit 300,000 followers within two years on the Twitter and Facebook pages. The SEO will involve revising the algorithm for the website to ensure that it appears at the top of a Google search. In addition, the company could consider email marketing, which involves transferring of cookies to all contacts of a website visitor (Thomson et al., 2013). This strategy has the potential of improving the companys visibility within a year.

Market Share Estimates and Revenue Forecast for Near Term and Long Term

The market share estimates were based on projected sales and profit margin in the short and long term. The projections are informed by the standard performance of the primary competitors and market size in Belgium (see table 2).

Table 2. Financial projections.

Short Term (6-12 Months) Long Term (2-4 years)
Variable Projection Justification Variable Projection Justification
Sales 30,000 On an average, most firms expand by 7% annually, which is equivalent to 40,000-60,000 new clients Sales 200,000-500,000 The business will be able to reach full life after two years since the sector does not require massive capital investment, but positive perception
Market size 3% The dynamics of entering into a new market regulates growth since the business will be adjusting to different changes Market size 12% The unique product and joint venture with a stable Belgian-based firm will enable the company to quickly penetrate the market
Profit margins Nil The business is projected to start making profits after 12 months since it will spend almost $4 million to enter the market Profit margins $3,000,000 and above The profit projection is wide since it depends on the ability of the company to create a positive perception that can attract customers

Evaluating Financial Requirements and Investment Opportunities

Financial Statements of Competitors

The financial statements of the three main competitors were synthesized and summarized to establish their capital standing (see table 3).

Table 3. Financial statements of competitors.

Variables Almarisk NV Belfius ING Belgium
Total Revenue $260,839,000 $231,441,400 $201,853,800
Gross Profit $24,425,400 $10,726,000 $20,147,900
Net Income $13,592,200 $12,031,000 $13,267,600

Challenges Because of Accounting Standards

Progressive Corporation will not face any challenge in financial reporting standards since Belgium uses the EU model, which is similar to the US GAAP. Moreover, the two countries share similar regulations on financial reporting sustainability and general accounting standards.

Required Investment for Relocating Value Chain Activities for Year 1, 2, and 3

The required investment to relocate the value chain activities for year 1, 2, and 3 in Belgium is estimated at $2 million. The figure was broken down and spread across the three years (see table 4).

Table 4. Required investment for relocating the value chain.

Required investment Year One ($) Year Two ($) Year Three ($)
Fixed assets 500,000 600,000 200,000
Flexible assets 300,000 400,000 0
Total 800,000 1,000,000 200,000

Estimated Revenue Projections

The estimated revenue projections were calculated with a conservative value of 300,000 clients over a period of three years with an average expenditure of $900 on insurance policy cover. This is equivalent to $270,000,000. The cost of doing business was estimated to be 20% of the revenues, which is equivalent to $54,000,000 (see table 5).

Table 5. Estimated revenues.

Estimated Revenues Year 1($) Year 2 ($) Year 3 ($)
Revenues 5,000,000 80,000,000 175,000,000
Costs 3,200,000 16,000,000 35,000,000
Gross Profit (1,800,000) 64,000,000 140,000,000
Net Profit 0 62,200,000 140,000,000

Strategic Implementation Plan

Balanced Scorecard

Elements Objectives Measurement Target
Internal operations perspective Creation of an effective control system, especially distribution networks. Number of activities initiated to develop an effective value chain 3 activities per month
Workforce quality The number of performance prizes from external organizations 4 prizes per financial year
Learning and Growth Perspective Improving overall performance strategies. Number and frequency of performance training 2 trainings per month
Achievement of specific objectives related to the value chain Proportion of competitiveness of the company as related to competitors Top three ranking
Level of employee satisfaction The level of quality and employee integration in performance High turnover against low redundancy
Financial Perspective Reducing the overall operation costs Proportion of costs related to operational issues as a fraction of total costs 8% of total cost
Customer Perspective Improve customer satisfaction Number of positive feedbacks 300 per month

Monitoring and Reporting Issues

Progressive Corporation will use a comprehensive 360-degree feedback channel to monitor and report issues related to business environment and other stakeholders. This channel has an effective performance tracker capable of measuring the effectiveness against set standards. Adjustments will be made based on the feedback.

Conclusion and Recommendations

Progressive Corporation has an experience in managing business operations beyond the US market. Thus, the external business and general value chain analysis suggest that Progressive Corporation is positioned to quickly penetrate the market with its technology-based business model and gain a sizable market share over a short period. The auto insurance policy product is designed and created as an affordable, comprehensive, and flexible insurance policy for private and commercial automobile owners. The product has been fully digitized to mean that application, approval, and issuing of the automobile insurance coverage is done over the company mobile app or website using a Smartphone or any other device that can access the Internet. Due to a strong capital structure, the company is projected to effectively and quickly penetrate the new market. The marketing plan is designed to optimize sales and increase product visibility in Belgium.

Governance and Accountability Code of Conduct

Progressive Corporation should consider creating a legal unit within the organization to provide training and reinforce ethical standards for the international market. The plan should include specific actions to address cases of corruption, sexual harassment, and bribery allegations. The legal unit with integrated the local and Transparency International regulations in the form of ethical expectation contracting.

Corporate Social Responsibility Policies

Progressive Corporation should also have a strong policy on corporate social responsibility characterized by periodic activities aimed at giving back to the local community. The initiatives should be turned into policies in the form of annual activities to address local concerns such as education sponsorships, mobile health clinics, community resource mobilization, and development of infrastructure. This policy will guarantee support from all stakeholders and ensure business suitability in the short and long term.

References

Arnold, D. (2004). The mirage of global markets: How globalizing companies can succeed as markets localize. Upper Saddle River, NJ: Pearson Education.

Barbara, C., Cortis, D., Perotti, R., Sammut, C., & Vella, A. (2017). The European insurance industry: A PEST analysis. International Journal of Financial Studies, 5(2), 1-20.

Ellsworth, R. R. (2002). Leading with purpose: The new corporate realities. Stanford, CA: Stanford University Press.

Ghemawat, P. (2001). Distance still matters: The hard reality of global expansion. Harvard Business Review, 79 (8), 137147.

Thomson, A., Janes, A., Gamble, J.E., Strickland, A.J., Peteraf, M.A., & Sutton, C. (2013). Crafting & executing strategy: The quest for competitive advantage: Concepts and cases (18th ed.). New York, NY: McGraw-Hill.

Global Link Computer Services Companys Business Plan

Business name

The proposed name of the company is Global Link Computer Services (GLCS). It will be located in the northern edge of Doha, Qatar, and it will be a sole proprietorship form of business. This location is quite central in terms of technology. In addition, Global Link Computer Services will be in major training institutions like Qatar University, Qatar Academy, Doha College and several other schools in Doha (Bains, 2009, pp. 4-6). It is next to Al-Rayyan Bank and Qatar National Bank, which will work to attract many customers.

Business summary

The business name portrays the kind of services the business venture will offer to the customers, that is typesetting, online services, photocopying, scanning, printing, binding, lamination, and play station services. It also implies that via internet services there will be a global connection. The business will require quite a number of items to necessitate its production operations. To increase the accuracy and efficiency of these facilities, maintenance will be necessary at regular intervals.

This in the end will ensure achievement of the goals of the business and laying down of business strategies for an easy production. The business process will involve offering delivery services to the customers as a way of attending to their needs among other services. The managerial skills acquired in entrepreneurship education class will be of much importance leading to the proposed business (Adekola, & Sergi, 2007, pp. 250-257). In this form of ownership, it means that I will enjoy the following benefits-

  • Ease information.
  • Secrecy.
  • Ease in the commencement of business operations.
  • Quick decision making.
  • Direct motivation.
  • Limited government control.
  • Ease in dissolution.

The key management will include the General Manager, Data managers, Marketing Manager, and other personnel comprise IT assistant II, Accounts clerk, Secretary, Chief Accountant, and Security Officer. Recruitment of personnel will be through advertisement and only suitable candidates will obtain placement. The company will be permanent and assured of stable operation (Adekola, & Sergi, 2007, pp. 258-267).

Organization Structure

Organization Structure

Vision

To be a leader in giving computer services to clients, in interrelating with the neighborhood, and in satisfying the humanity around us- our clients needs, the future of expertise, and the universal business climate.

Mission

To deliver high-quality computer services to all our clients

Values

Advanced strengthening and provision, effortless to obtain, effortless to utilize

Strategic objectives

Short-term objectives

  • To make maximum profits from the business dealings.
  • To create employment opportunities.
  • To minimize the costs of machines by using them efficiently and economically.
  • To give first-class merchandises and services.

Long-term objectives

  • To open more branches of the enterprise in the neighboring towns and countries at large.
  • Participate in nation-building by paying lump-sum taxes.
  • Exercise social responsibilities through the funding of students projects.

Marketing Plan

PEST analysis

Political aspects

  • The government in authority having a huge majority as well as a rising agenda for starting businesses
  • Variety of fresh legislation suggested that would affect the condition and legislative foundation for GLCS
  • Hung Council might not be the most suitable form for bringing strategy change
  • Local Authority and Unitary power debates
  • Uniqueness issue very significant but might divert interest and resources if viewed as isolationist

Economic aspects

  • Interest rates minimal but competition from similar businesses thrusting prices up and could influence the sustainability of GLCS.
  • pay prospects improving, generating the latent for intricacy in recruitments.
  • Increases in Council Tax, to better services, are detested.
  • Low expertise in growth regions.

Social-Cultural aspects

  • Islam characteristics strong.
  • Cultural diversity nearly non- existing.
  • High students population generating high demand for services.

Technological aspects

  • Internet advancements of computer services.
  • Mobile and wireless telephony.
  • Technological supports for developing the delivery of computer services.

SWOT analysis

Strength and Weakness analysis

(Mellor, & Coulton, 2009, pp. 215-220).

Business Strengths Weaknesses
Internal environment
Global Link computer services
  • Availability of security
  • Location convenient to customers
  • Well trained & qualified personnel
  • High networking service
  • Being new business little customer trust
Similar businesses nearby External environment
  • Have higher
  • customer trust
  • Well established in market research
  • Insecurity
  • Poor networking services

Opportunities

  1. The population living there is high and middle class. This promotes the business by using the services thus enhancing the business opportunity.
  2. The security around the location area is well ensured and enhanced. This eliminates vices like robbery.
  3. The business is set very close to the main road. This enables effortless accessibility and classic infrastructural amenities such as electricity.
  4. The business will be located very close to institutions, which greatly need the services our enterprise will offer, hence a market chance for the business (Al-Khatib, & Al-Abdulla, 2001, pp. 98-100).

Threats

Global Link Computer Services is involved in numerous legal actions, comprising lawsuits alleging copyright violation and antitrust infringements. The result of these lawsuits may generate a bad reputation that could impinge on the operations of the business. Additionally, there is an immense pricing force in the entire market and strong competitors having a higher customer trust will concentrate on standardized prices (Al-Khatib, & Al-Abdulla, 2001, pp. 101-110).

Marketing research

The capital to start the business will be from personal savings, borrowing of loans, and donations, which will enable the business to get a good starting ground. Before the start of the business, it will be necessary to advertise the enterprise using posters, signposts, and mass media by stating clearly the specific location, when it will start, its operation, and the convenient business hours together with the services it will offer.

However, shall the business venture do well as is expected, improvement will be done to its job handling to expand the business through retained profits (Westermann, & Lancaster, 2011, pp. 199-210). The management will open up more branches in various potential towns after the realization of high profits. Marketing research will aim at:

  • Conversing with customers to comprehend the business goals.
  • Choosing the most suitable research tactics and methods.
  • Planning qualitative and quantitative study for products in all phases of the Product Life Sequence.
  • Designing study questionnaires and moderator directs.
  • Interpreting statistics, writing statements, and making achievable proposals.
  • Database Advancement.
  • Gathering and analyzing complaints.
  • Conducting assessments and presenting Competitor and market analysis normal reports.
  • Segmenting statistics and eligible leads.

Marketing strategy

Flourishing marketing of Global-Link Computer Services necessitates innovative advertising and considerable publicity. It is important to consider all intended markets and create marketing policies that will position Global-Link Computer Services Company ahead of its competitors for the utmost sales and returns. Some marketing strategies that the business will undertake include presenting packages of the business to design schools.

Offering exceptional student reductions will too be necessary (Lincoln, & Frontczak, 2008, pp. 52-56). Other marketing strategies may include offering free training to all customers who buy products from the business. This will not only attract dedicated clients but will also draw clients intrigued by the products and services of Global-Link Computer Services. These clients will fear changing businesses because of a lack of acquaintance.

Working with neighboring cyber cafes to offer products and services of the business will be an excellent undertaking. When clients get an opportunity to use products and services from the business, they are more probable to purchase from Global Link Computer Services. Placing booklets or discount tags at cyber cafes will assist clients to trace easily the business when they potentially demand information, or a purchase, afterward (Lincoln, & Frontczak, 2008, pp. 52-62).

Finally, arranging to have Global-Link Computer Services covered on local television and radio news broadcasts will be of great aid. In the least, Global-Link Computer Services should obtain advertising by coverage in an appraisal at the close of the program. By aiming at the local listeners and viewers, Global-Link Computer Services will boost the exposure of its offerings.

Market segmentation

Definition and classification of customers

Demographic

The demographic classification of the clients of GLCS entails the number of customers the business will serve in the market in comparison to her competitors. Global Link Computer Services targets the population of 1,500,000 inhabitants of Doha but the population representing clients of Global-Link Computer Services is approximately 900,000 customers. Therefore, the market share in percentage will be as follows:

No. of customers x 100

Overall inhabitants= 900,000 x 100%

1,500,000= 60%.

Geographic

The potential customers of the enterprise will be accessible people who have an interest in the global world of computerization (Guenzi, De Luca, & Troilo, 2011, pp. 269-271). Furthermore, many people require such services as typesetting, printing, photocopying, lamination, and scanning. This customer base is available in Doha and its outskirts as Doha is the capital city of Qatar.

Psychographic

The institutions, which are offering different computer training, are Qatar University and other colleges nearby. The above will require the services offered by Global-Link Computer Services for practical purposes, for instance, internet exploration. The many primary and secondary schools in the neighborhood also need computer services for the sake of examinations and general knowledge (Guenzi, De Luca, & Troilo, 2011, pp. 272-285). Therefore, the enterprise will negotiate with the customers to offer them the services they require.

Behavioral

A large section of the customers, being students, are computer literate and therefore they will get access to the website by browsing their mailboxes, checking jobs and career advertisements and opportunities, and communicating with their relatives and friends when appropriate. In addition, they will be in dire need of such services like typesetting, printing, photocopying, lamination, and scanning offered by GLCS. These services are crucial in their studies, revisions, assignments, and other learning undertakings.

Marketing mix

Products and services

Global Link Computer Services will mainly be involved in offering internet services. For instance, e-mail services, web services, and providing typesetting, scanning, printing, binding, photocopying, lamination, and play station services. Furthermore, because it is near institutions offering computer training, it will enable students to acquire practical skills like internet exploration at a fee (John, & Martin, 1984, pp. 170-173).

Prices

Pricing is the process by which a producer determines how much a given product can cost. Many factors influence the pricing of a product as mentioned below:

  • Competition
  • Government policy
  • Cost of raw materials
  • Cost of labor incurred among others.

GLCS intends to follow the following pricing methods:

Cost Oriented Pricing Method

Here, the selling price will be determined by calculating the production cost and a small margin profit of sales gained per unit.

Demand Oriented Pricing Methods

In this pricing system, the business will hike prices during the periods of maximum demand and lower prices when their product services are in low demand. Hence, prices will be directly proportional to the demand for the product in the market.

Competition Oriented Pricing Method

In this method, the selling price will depend on the prices offered by competitors of the same product. This kind of pricing is termed as matching the competitive pricing system. Competition oriented method will ensure that Global Link Computer Services does not charge a higher price than its competitors do, and in so doing will attract a higher number of clients (John, & Martin, 1984, pp. 174-183).

Promotion

As a way of advertising the business, posters shall be printed, distributed, and placed at every market place within Doha and other nearby towns. Distribution of other posters to various schools and institutions will be vital. Putting banners along the streets of Doha is necessary so that many people can notice the existence of the business. It will be necessary to put signboards on the main junctions and roundabouts.

Printing of business magazines, calendars, and brochures will take place on yearly basis and given to regular customers. These calendars and business magazines will show the background information on the business, the name of the business, and the illustration of the services offered (Buttell, 2009, pp. 6-8). As a way of sales promotion, offering discounts and raffles will play a key role. Discounts will go to regular customers.

In addition, the business will offer credit facilities to its regular customers as a means of promotion. In direct marketing, possibly the least striking constituent in the mix is important since it is cheap and GLCS will narrowly target it to specific clients. For instance, telephone requisitions, direct mail, and electronic promotion are vital to direct marketing techniques that GLCS will employ. Direct marketing will reach the customers likely to act in response and purchase the products and services of GLCS. Direct marketing will thus remain a successful and crucial component of the promotional mix.

Place

The business will be located inside learning institutions in Doha. The first branch will be at Qatar University from where the business will gradually open other branches in Qatar academy, Doha College, and so on. With its global vibe, cultural rebirth, and motivating educational environment Doha is home to numerous universities, academic establishments, colleges, and research institutions. This cultural and appealing city hosts excellent universities, for instance, Carnegie Mellon University (Al-Khatib, & Al-Abdulla, 2001, pp. 94-97).

Reaching and Keeping Organizations Customers

Sales management

Recruitment

A number of factors need taking into consideration when recruiting employees for the management posts. These include qualifications, experience, competence, and age. There will be an advertisement for the available vacancies by the use of posters, newspapers, television, and radio. Displaying posters in public is necessary so that anybody interested will apply for any vacant posts. Shortlisted candidates will go through an interview and successful ones selected and appointed by the general manager (Moran, & Gossieaux, 2010, pp. 232-233).

There will be orientation and induction of the selected staff whereby showing them their areas of work and duties assigned to them will take place. Moreover, there will be teaching them and making them aware of the rules and regulations governing the business. Supervisors will coordinate on-job training where there will be an institution of apprenticeship programs. As operation improves and business expands, there will be sponsoring of the salespeople for short courses in some institutions. There will be a rating of the promotion of employees based on the following:

Job Performance

Dedicated, devoted, delighted, and competent workers will receive rewards through promotion and salary increment. The workers will be entitled to allowances in case of extra services offered. The business will also remunerate the employees for overtime job on the task performed.

Seniority

This is where consideration of the working experience and the number of years the worker has been working in the business comes into play. Those who have worked for a long time in terms of years will receive promotion in their salary by a certain percentage of the increment (Moran, & Gossieaux, 2010, pp. 234-235).

Public relationship

The employees who will handle customers with care, courtesy, trustworthiness, honesty, humility, in a friendly manner will receive appreciation and promotion.

Remuneration

To preserve a competitive wage organization, consideration of the market condition and the ability of the business to pay is very significant. Every member of staff will get a basic salary along with other gains like a medical grant, house allowance, amid other allowances (Moran, & Gossieaux, 2010, p. 236). Receiving of advance salary will start by the 15th day of the month and there will be the permission of a maximum of only a third of the salary.

Incentives

The incentives, which the employee will be entitled to, are as follows:

  • All employees will be entitled to annual wage in accordance with their respective Collective Bargaining Agreements or specific terms of employment.
  • Overtime pay will be granted in accordance with the computed basis of overtime hours and therefore worked in a given monthly pay bill. Non-financial incentives will include Health and Safety facilities, honor, and respect of employees and sick leave (Moran, & Gossieaux, 2010, p. 237. Starting a welfare scheme like pension, retirement, welfare, insurance policy cover is necessary.

Public relation campaign

Public relations (PR) campaigns could serve numerous functions: to launch GLCS company or its future branches; to bring in a new higher-level director; to achieve publicity for a forthcoming event or charity performance, and to advance public awareness among others. An excellent PR campaign can assist GLCS to compete and get ground in the market or in its meticulous niche. The following are ways to plan a PR campaign to serve the strategic objectives of GLCS.

  1. Hire public relations expert.
  2. Meet public relations expert. This will work to give the expert a feel for the image of GLCS Company in addition to what they are conveying in their campaign.
  3. Create a journalists kit. This could comprise a printout of the Global-Link Computer Services Company website homepage, a booklet, a chart, and every other marketing stuff the company may have.
  4. Endeavor for equivalence. All workforce and the Company representatives ought to appear on the same sheet, which implies that their statements should be unambiguous across the board (Moran, & Gossieaux, 2010, pp. 238-239). This will ensure no miscommunication or mistakes all over the campaign.

Customer relation management

Customer relation management underscores one of the critical areas in any business. Customers are the most important people in any business venture, needless to note that, without customers, any business venture would collapse (Meyer, & Schwager, 2007, pp. 116-120). Therefore, in the case of customer relationship management, customers will be welcomed and given direction to where they can get different services like browsing the internet, typesetting, faxing, lamination, scanning, and photocopying. This stage is where the customers are offered the services they require to the point of their satisfaction.

A discount is necessary for lump-sum purchases to attract and retain customers. Since in this business most of the customers will be students and staff of institutions, it is vital to building on their areas of interest for utmost satisfaction. After the customers have received the services they require, they would in addition get a receipt to go and make the payment at the accounts clerks desk (Meyer, & Schwager, 2007, pp. 121-126). After the accounts clerk receiving the payment he will stamp the receipt paid for easier handling of any complaint that may later arise.

Reference List

Adekola, A., & Sergi, B. S. (2007). Global Business Management: A Cross-Cultural Perspective. Farnham: Ashgate Publishing Limited.

Al-Khatib, F., & Al-Abdulla, S. M. (2001). The State of Qatar: A Financial and Legal Overview. Middle East Policy, 8(3), 94-110.

Bains, E. (2009). Dohas Experiment in Education. Middle East Economic Digest, 1, 4-6.

Buttell, A. E. (2009). 4 Steps to an Effective Marketing Plan. Journal of Financial Planning, 1, 6-8.

Guenzi, P., De Luca, L. M., & Troilo, G. (2011). Organizational Drivers of Salespeoples Customer Orientation and Selling Orientation. Journal of Personal Selling & Sales Management, 31(3), 269-285.

John, G., & Martin, J. (1984). Effects of Organizational Structure of Marketing Planning on Credibility and Utilization of Plant Output. Journal of Marketing Research, 21(2), 170-183.

Lincoln, D. J., & Frontczak, N. T. (2008). A Practical and Effective Marketing Plan Assignment for Principles of Marketing Students. Journal for Advancement of Marketing Education, 1(12), 52-62.

Mellor, R. B., & Coulton, G. R. (2009). Entrepreneurship for Everyone: A Student Textbook. Thousand Oaks, CA: Sage Publications Ltd.

Meyer, C., & Schwager, A. (2007). Understanding Customer Experience. Harvard Business Review, 85(2), 116-126.

Moran, E., & Gossieaux, F. (2010). Marketing In a Hyper-Social World. Journal Of Advertising Research, 50(3), 232-239.

Westermann, D., & Lancaster, J. (2011). Improved Pricing and Integration with Revenue Management  The Next Step toward Improved Revenues. Journal of Revenue & Pricing Management, 10(3), 199-210.

Indiana Beach Resort Business Plan

Company Description

Indiana Beach Resort

This is a leisure based company whose mission statement is to be the best beach resort in the whole world. The resort will be based in the north Sumatra province of Indonesia along the Sumatra Island.

The main route of accessing the island will be a company based boat that will transport our clients from the mainland to the island for a distance covering approximately 8kms from the mainland (World guides 2011).

The main services and products to be offered in the resort include: spar services, restaurant, play ground for children and outdoor facilities such as a swimming pool interlinked to the Indian Ocean and lodges for tourists who are interested with spending a night in the serine environment.

Further, the resort will include a designated area for camping with 24 hours security personnel manning the camping area for purposes of protecting our clients who are keen on spending their nights outdoors. However, tourists will be required to come with their camping facilities such as tents and sleeping bags.

Located in the Sumatra Island, the resort will be among the first tourism destination in the island to offer relaxing services to the tourists who visit the area throughout the year. Therefore the main target for the resort includes tourists from all over the world who visit tourist’s destinations such as Lake Toba, Mount Krakatoa, Sumatra museums among other tourist destinations (World guides 2011).

The mentioned facilities provide more vigorous tourism activities such as swimming and mountain climbing and thus overlooking the more relaxing tourism activities such as camping, dinning, sun bathing among others. To meet the relaxing needs of the tourists, it is important to come up with serine environments that offer a calm mood.

Therefore, the resorts mandate is to provide the most serine, quite and relaxing environment for tourists to be able to enjoy the cool breeze of the ocean.

Market Environment

The tourism market in Indonesia is among the major contributors to the economy of the country after the extensive agriculture industry. The country is a tourist destination to variety of tourists with different tourist needs.

Tourists visit the country mainly due to its monuments, historical sites geographical features and the cultural practices of the different primitive Indonesian tribes situated in the rural parts of the country. Wildlife is also among the major attractions in the country though the sector is still under developed in terms of access routes to the wildlife designated areas.

However, in the northern part of Indonesia, tourism numbers and trends are quite low due to poor infrastructure and emergence of separations among the province residents (Boniface and Cooper 2009). This however notwithstanding, there is great potential for tourism activities especially resorts adjacent to Mount Krakatoa which is a volcanic mountain and a major attraction sites for tourists who come all the way to capture the eruptions up close (Erfurt and Cooper 2010).

Further, primitive tribes culture is one of the major tourist’s interests in the island thus marketing the island and as a result contributing to the number of tourists visiting the area (Eliot and Bickersteth 2000).

Further, there is a huge market potential for Indiana Resort considering that there are very few guest houses in the Island to cater for the tourists visiting the island and other adjacent tourism destination in Sumatra Island.

In addition, the housing facilities available are unsuitable for tourists (Connell and Rugendyke 2008). This therefore, necessitates the need to maximize on the availability of tourists and lack of resources to cater for tourism services. Hence, improving the market stance of the resort.

Lack of facilities also implies that there is minimum competition of beach resorts within the island.

This therefore means that out of the more than 5000 guests who visit the island annually, Indiana Resort is destined to cater for up to 80 % of the tourists relaxing and accommodation needs and an additional almost equivalent number of tourists in form of local tourist guides from the mainland who normally accompany their tourists throughout their visitation period within the island (Causey 2003).

Management Plan

According to Schwalbe (2006), a management plan includes systematic planning, definition and control of the main tasks that will help an enterprise to achieve the overall mandate of the business. This therefore includes all the tasks that should be handled and a detailed description of how the management team intends to organize all the factors to assimilate a working plan that is in line with the mandate of the company.

Kerzner (2009) further argues that a good project should come up with a plan that highlights the scope of the business, the required resources, expected schedule and quality.

The management plan of Indiana Resort will include two on sight managers with four departments (spar, outdoor recreation, restaurant and lodges). The plan will follow porters Differentiation Strategy which emphasizes on offering facilities and services that are different from the competitors, in this case, the relaxing facilities and camping sites (Griffin 2008).

The scope of the resort is to meet the relaxing needs of 20-50 tourists per day. This will be managed through advanced bookings which will act as a cushion for the company in order to properly manage the number of people visiting the resort in a professional manner without delays (Chen andSchwartz 2008)

Some of the requirements for commencing of this business include the initial capital for purchasing the land, construction of facilities and the initial supply of materials. This will be managed through collection of capital from all the stake holders and borrowing from financial institutions.

To manage the schedule of the resort, it will be vital to come up with a schedule chart which highlights all the departments within the resort, their respective activities and the staff members in charge of coordinating and undertaking all the activities.

To further maintain high standards of quality in terms of service delivery, it is vital that we outsource hospitality training for all the staff members and maintain continuous supervision of services rendered through client’s surveys to be conducted quarterly.

Operations Plan

Timmons, Zacharakis and Spinelli (2004) define operations plan as the production cycle and the delivery tactics of a given business arranged in a systematic manner in the order of occurrence. Thomas and Derammelaere (2008) argue that such a plan should be centred on ensuring a superior competitive advantage over rivals and maximising on offering quality services to the consumers.

They further assert that the nature of the operations plan determines the rate at which a given company will actualize its mandate

Indiana Beach Resort operation strategy will be centred on ensuring quality services for our clients. For the restaurant department, the operations plan will involve outsourcing for food suppliers from the farmers in the main land and seafood from the island. This will also include the inclusion of professional chefs who will cater for the food orders issued by tourists visiting the resort.

For the spar department, the operations will include previous bookings by clients for specific services. Further, our spar will include well trained professional spar attendants who maximise on exclusive spar treatment such as massaging using Indonesian herbs and oils.

For the outside recreation department, our outdoor services will include offering relaxing terraces, benches and seats around the swimming pool and accompanying tables that can be utilized by tourists willing to dine outside. Previous bookings will not be necessary.

However, the staff members of this department will always be ready to meet any outside recreation services such as orienting the tourists around the resort and identifying features visible from the resorts view point.

The lodges department will cater for all the sleeping facilities by maintaining the lodges. These department’s operations will also include making sure that the clients dinning arrangements and visitation arrangements are attended to on a daily basis.

The operations hours will be 24 hours with our workers working for 8 hours shifts. This means that there will be three shifts per department with approximately 12 attendants per shift. The core goal of all the departments will be to maintain a low cost operations strategy that will deliver quality services to our clients (Waters 1990).

Financial Plan

The financial plan for Indiana Beach Resort covers expenses from the establishment of the resort to the first three months after the launch of the resort in US $.

Task Expense
General Land payment 16,000
Restaurant Department Construction of restaurant 7,000
Interior design 4,000
Furniture 3,500
Kitchen appliances 4,000
Food supply 6,000
Lodges Department Construction of lodges 7,000
Interior design 4,000
Bedding appliances 6,000
Maintenance costs 2,500
Outside Recreation Department Construction of swimming pool 4,000
Furniture and appliances 4,500
Compound maintenance 2,500
Spar Department Spar construction 5,000
Spar appliances 8,000
Other Expenses Wages 10,000
Overheads (electricity, water, and sewage) 7,000
Miscellaneous expenses 5,000
Total 106,000

Contingency Plan

Rothstein (2007) asserts that a contingency plan is the equivalent of a disaster management tool which highlight he necessary steps to be undertaken in case the project fails due to varying reasons. Therefore the plan should focus on anticipated challenges and their resolutions (Childs and Dietrich 2002).

For Indiana Resort, in case of a delay of funds to commence the business, it will be necessary that the company starts with a few departments maybe one or two or launch one department at a time depending with the availability of funds and the requirements for each face of the business plan.

In cases where the tourism season is off peak, which is a very common occurrence in the tourism sector, it will be appropriate to lay off some workers in order to reduce on the company’s expenditure until the tourism season peaks.

In case the company has to do away with some departments during the off-peak season, I recommend that the company website should be updated in order to avoid inconveniencing travelers booking for services that the company cannot avail at a specific season.

Reference List

Boniface, B. and Cooper, C., 2009. Worldwide Destinations: The Geography of Travel and Tourism. 5th ed. Boston: Elsevier.

Causey, A., 2003. Hard bargaining in Sumatra: western travelers and Toba Bataks in the market place for souvenirs. Hawaii: University of Hawaii press.

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Comprehensive Business Plan for a Strategic Initiative

Introduction

Telehealth is a promising tool for improving efficiency and reducing the cost of healthcare. This technology refers to the “entire spectrum of activities used to deliver care at a distance — without direct physical contact with the patient” (Wosik et al., 2020, p. 957). There are currently over 200 active telehealth networks in the US that provide half of all hospitals with access to some form of digital medicine (Sharma et al., 2017, p. 1). Remote medical care includes electronic consultations through various communication channels, remote monitoring of the patient’s condition, video visits, and more. The development of telehealth technology increases the level of accessibility and safety of healthcare, especially in a pandemic.

The purpose of this strategic business plan is to describe the process of implementing a mobile telehealth application for the organization. This proposal has a number of rationales based on the benefits of implementing a platform for improving the quality of care. First of all, the application will reduce the time it takes for the patient and the healthcare professional to complete the consultation. Additionally, the platform provides instant access to patient records, which will simplify the work for the physician. An important factor is also the economic benefits that the platform presents to both patients and healthcare professionals. The plan structure includes SWOT analysis, financial analysis and budget, strategy, implementation schedule, and strategic evaluation.

SWOT Analysis

Strengths:

  • The technology expansion improves access to medical care “telehealth services generally increase the convenience of seeking out health care” (Hashida & Johnson, 2021, p. 3).
  • Telehealth makes communication between patients and healthcare professionals safer by eliminating the risk of infection in a hospital setting.
  • The technology increases the time efficiency, as it provides more control over the amount of time spent on the visit for all stakeholders.
  • Digital technology can help optimize healthcare costs, which is currently characterized by 25% waste in the US (Shrank et al., 2019, p. 7).
  • Telehealth networks make the record-keeping process easier by providing access to all the relevant information on one platform.
  • More convenient and personalized access to healthcare allows a large number of patients to be engaged.

Weaknesses:

  • The need to address patient privacy concerns under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) (HIPAA for professionals, n.d).
  • Telehealth requires medical professionals to acquire specific skills to work effectively with the technology.
  • Shortcomings in the existing digital infrastructure, which is especially relevant for remote areas.
  • Low awareness of patients about the possibility of remote interaction and receiving medical care.

Opportunities:

  • Creation of platforms for effective communication between medical professionals and patients.
  • Development of more relevant legislation to facilitate the spread of remote healthcare.
  • Development of digital infrastructure, including the availability of telehealth in remote areas.
  • Raising the level of awareness of patients about the possibilities of digital interaction with health professionals.

Threats:

  • Telehealth can result in insufficient clinical data collection, which can lead to misdiagnosis.
  • Ensuring data security and HIPAA compliance is challenging and expensive.
  • Lack of real human interaction, which can negatively affect the quality of care.

Financial Analysis and Budget

The first step is to assess the potential financial benefit that can be gained from implementing the application. The main savings in telehealth are reduced travel costs for patients, as well as for physicians (Snoswell et al., 2020). Van Wagenen (2017) reports that “telemedicine visits saved upwards of 11,000 patients a total of 9 years of time and $ 2.8 million in travel costs” (para. 9). Whitacre et al. (2017) note that annual savings including personnel costs, missed work, travel time, and pharmacy and lab work can be estimated by hundreds of thousands of dollars annually. Additionally, the use of the application can increase the number of patients who are regularly monitored in the hospital, which also positively affects the income of the medical institution.

The cost of implementing a strategy includes not only the development of the application but also related other factors. First of all, the development of a basic version of the application will cost $50,000-80,000 (Cost of telemedicine, n.d). The functionality of this platform “includes a patient app, a doctor app, and an admin panel for a single platform” (Cost of telemedicine, n.d). For the presented strategy, such functions will be sufficient; additional features may be presented later.

The costs also include assessing the functionality of the existing network and the technical work to implement the application. In this case, it is important to consider that it is also necessary to provide for compliance with data privacy legislation. The cost of implementing the application also includes the work of the technical team at the hospital, who will oversee the application and provide support for healthcare professionals. The average salary for such a specialist is about $58,000 (Healthcare technology specialist, n.d). One must also consider the possible costs of upgrading existing hospital hardware. It is also important to consider making changes to the site structure to provide information about access to the application.

Expenditure: Cost:
Application development: $80,000
Hiring a technical specialist (annually): $58,000
Possible hardware modifications: $10,000
Creating a page on the site: $250
Total Budget: $139,250

Table 1. The budget for the development and implementation of the application.

Strategy

The strategy for implementing telehealth in the organization includes the development of a dedicated mobile phone application that would be available to both patients and healthcare professionals. The primary task of the application is to synthesize all the data available to the physician about the patient. Additionally, the platform will provide access to real-time consultations and a module with medical recommendations. The first step in the development strategy is to prepare the existing network for connecting the application. The information source for this platform will be an integrated records system available to all hospital staff. An important factor, in this case, is ensuring data security, including the security of the network and devices.

Application development should take place in integration with medical professionals to include all the necessary sections in it. In particular, the application should have access to patient records, laboratory data, and hospital visits, as well as the ability to communicate with the patient. Application integration requires technical supervision to work correctly on healthcare professional devices. Thus, after the application is introduced into the system, it is necessary to install it on personal devices. It is important that the devices are isolated from any outside interference and are able to provide a sufficient level of data privacy.

A key step in the implementation of the strategy is the preparation and training of personnel for correct and effective interaction with the platform. This training can be performed by technicians who must provide all the necessary information, as well as support medical professionals at all stages of using the application. Periodic monitoring of the state of the devices by the technical service will ensure the required level of security and performance.

The final stage of application implementation is to attract patients and raise their level of awareness of the platform’s capabilities. First of all, it is necessary to provide patients with access to the application. This can be done through posting information on the organization’s website, as well as through the dissemination of information through physicians and nurses. Medical professionals need to explain in detail to each patient the capabilities of the platform and schedule follow-up appointments and monitoring, if possible, through the application.

Implementation Schedule

The implementation schedule includes the development of the application, the time for installation on devices, integration into the network, the provision of staff, and familiarization of patients with the functionality of the application.

Step: Timeframe:
Application development: 35 weeks (9 months) (Telemedicine software cost, 2020)
Installation and integration: 4 weeks (1 month)
Medical staff training: 2 weeks (0.5 months)
Engaging and informing patients: 24 weeks (6 months)
Total timeframe: 65 weeks (16.5 months)

Table 2. The application implementation schedule.

Strategic Evaluation

In the process of implementing the strategy, it is necessary to constantly monitor the number of patients who use the application. In particular, you need to track the statistics of interactions made in the application. Particular attention should be paid to collecting data on the type of interaction and patient outcomes. The ability to adjust strategy during implementation is necessary to assess the need to add and modify any functional features of the application that would have a positive impact on its use.

References

(n.d). MindBrowser.

Hashida, C., & Johnson, B. (2021). [PDF-file]. Legislative Analyst’s Office.

(n.d). ZipRecruiter.

HIPAA for professionals. (n.d). HHS. Web.

Sharma, R., Fleischut, P., & Barchi, D. (2017). . International Journal of Emergency Medicine, 10(21), 1-4.

Shrank, W. H., Rogstad, T., & Parekh. (2019). The Journal of the American Medical Association, 322(15), 1-9.

Snoswell, C. L., North, J. B., & Caffery, L. J. (2020). . JMIR Perioperative Medicine, 3(1), 1-8.

(2020). Existek.

Van Wagenen, J. (2017). .

Whitacre, B., Hartman, P. S., Boggs, S., & Schott, V. (2017). Oklahoma State University.

Wosik, J., Fudim, M., Cameron, B., Gellad, Z. F., Cho, A., Phinney, D., Curtis, S., Roman, M., Poon, E., Ferranti, J., Katz, J. N., & Tcheng, J. (2020). . Journal of the American Medical Informatics Association, 27(6), 957-962.

Virtual Fitting Room Online Business Plan

Marketing Objectives

The marketing objectives that our company aims to attain are as follows: First, in terms of customer growth, we have a target of one customer, i.e. eBay in the first year and then extend it to Victoria’s Secrets in the second year. But we intend to spread our awareness through the e-retailers like traditional companies such as Nike, Adidas, marks and Spencer, Wal-Mart, who are new entrants in the business. We intend to capture their accounts by the third year. Second, our target is to provide absolutely impeccable service quality to our customers. Though our product is in the B2B arena, we intend to provide customer service to our clients by providing online visual merchandising experience through our software which will enhance the feel of the virtual fitting room and its attractiveness. We will help the clients to store the preferences of their end-customers and their details so that it can be retrieved by the client company to do their product enhancement or do a study on their consumers. But this feature will involve an incremental R&D cost, which we will be able to fulfill only after second year. We want to spread the awareness of our brand internationally.

Description of the Target Market

Our primary target market for the year 2008 is eBay and the Victoria’s Secrets. EBay has an international presence through the internet and has become the top 10 clothing sites in 2006 with net increase in visits being 20%. Further eBay earns 10% of the entire world’s ecommerce sales. (www.fashionunited.co.uk/news/eBay.htm)

Description of the Target Market
Figure 1.

Figure 1 shows that the number of customers available with eBay who are active and the number are increasing over the years. Increase in customer base over the years will definitely increase our revenue and make our association with the company profitable.

US Dollars
Figure 2.

Further figure 3 shows the revenue status eBay had till 2003 which actually gives us a glimpse of the increasing financial stronghold of the company and the expected sales that where are expected to get from being associated with this company.

Victoria’s Secrets has seen a sales increase of 20% over 2007 and is expected to grow further with its increasing online sales went from practically zero in 1998 to over $200 million in 2001.

Table 1. Annual Income Statements. Source: Hoovers.

All amounts in millions of US Dollars.

Year Revenue Gross Profit Operating Income Total Net Income Diluted EPS (Net Income)
Jan 07 3,700.0
Jan 06 3,222.0
Jan 05 3,113.0

As table 1 shows that there exists an increasing trend of revenue state for Victoria’s Secrets. In 1998, management launched www.VictoriasSecret.com with little fanfare. This high-impact web presence translated into strong growth for the online division, whose sales grew from practically zero in 1998 to over $200 million in 2001. Performance metrics for the web included sales growth, the number of “new to file” customers (i.e., newly acquired customers), average order size, and purchase rates.

Our presence with both traditional retailers like Victoria’s Secrets and online retailers like eBay will help us establish our presence among both the type of companies. Moreover, the pricing strategies and promotion will be advantageous for our presence to be felt among the target group of clients.

Description of Target Business Partners and Sponsors

As our product gets more sophisticated, we may consider collaborating with Macromedia to run our modeling results on their popular Macromedia Flash player. However, this will be subject to the condition of us integrating the player into our Virtual Fitting Room. This way, the end users will not be required to go through the additional step of downloading Macromedia Flash Player to view the 3D models, a practice many websites are currently engaged in. This will protect our interests, the copyrights of the product as well as retain our bargaining power. In return, Macromedia shall increase the network externalities of their flash player with satisfied users of their fine imaging results and resolution of our models.

This tool will enhance our product and an association with them will help in our R&D pursuits. For instance, with this we will provide added convenience to the end-customers of our clients which will create customer delight for them. So, they will have convenience and will visit the site more often due to ease of use. This in turn will increase our revenue and will induce them more to purchase apparels which will help our clients increase their revenue. Further, this will enhance our customized avatar to be seen and experienced by the end customers of our clients. Increased ease of use will increase the number of visitors to the sites of clients as well as our sites. Further, with heightened end-customer satisfaction that our product will provide, more e-retailers will find our product interesting buy fro their sites. They will want to buy the product as it will give them a competitive advantage against their competitors and hence will increase our brand awareness. Further it will provide our product a competitive edge over our competitors who still have to use a downloaded flash player.

Marketing-Mix Strategy

Price: Our Company’s revenue model will be based on three sources:

  • We would charge our clients US$200 for digitization of their garments.
  • A 20% charge for every visit by the end-user to the client’s site.
  • To integrate the virtual model into the client Web site we would charge US$1000.

Clearly, we adopt a penetration pricing strategy which is equivalent to our competitor. We propose to offer the prices in bundle to provide the allied services such as integration of the model with client web site. The goal of such a pricing strategy is to derive the maximum revenue and profit from the market. Further a 20% surcharge on visits by end-customers will ensure that our recurring income comes from the client. Hence the price will cover our cost of making the software as well as the cost of helping our clients to set up the software in their website.

Place: As ours is a web-based business so we would target any customer from any geographic location. The distribution of the software will off course depend on the demand pull from the new clients. Since the product requires to be installed once and then it can be continually used, we do not have to consider a supply chain of delivering the product.

Promotion: we will indulge in direct selling model to customers. So, we would need to adopt direct promotional strategies. Further, we would participate in trade shows initially to increase brand awareness among the e-retailers. Further we would print our advertisement in retailer’s magazines. We adopt the above-mentioned promotion mediums because they will B2B marketing are about increasing one-to-one awareness among customers. Thus, direct promotion is an inevitable option. So, we need to have representatives who would visit the clients. Moreover, emailing becomes imperative for an online business.

So, we will adopt an online promotional strategy for absolutely virtual organizations like eBay. Trade shows will again be a big part of our promotional plan as we can reach out to the maximum number of clients through such shows. But we will take part in virtual online trade shows. The estimated cost of direct emailing will be minimal. The PR people who would do direct promotion will cost their salary plus other minor expenses. The cost of taking part in the trade shows will be around $300 to $500 per event to $1000 per event as per the scale of the show. The cost of advertising the product in magazines will be around $45 to $55 depending on the content of the advertisement. In the first year we will rely only on direct mailing and direct PR promotions. Then in the second year we will participate in trade shows where in we can enhance our presence. From third year onwards we will promote our products through advertisements in magazines as well as online advertisements.

Product: Our product as discussed earlier is a unique software which would help to recreate a virtual fitting room for the purchasers of apparels online. The software will help our clients to attract more customers and reduce the number of discontent that online purchase has with apparel sales. Our product differentiates from the competitors on personalization element. We aim to offer a product which will customize the end user preference along with the proper graphical depictions of the garments of our clients and their textures. Further no other software provides virtual assistance in making a choice of the costume to be chosen. This is an additional feature that our clients will have through our product. So, we position our product son this customization model. That is, we aim to position our product on the basis of customized solution to our clients. The product offering that we will have is first the software which is our core product, assistance in setting up the software in the client’s site if requested by the customer, third, providing online visual merchandising for the customers if so desired by the client and various other services to the customers.

Sales Strategy and Forecast

We assume that fro the first year our customers are eBay and Victoria’s Secrets Direct. From table 1 we see in 2006 the number of people visited the websites to purchase apparels in these two sites. So, if we multiply the 20% i.e. $40 charges for every customer who visits the site for this purpose, we see that the revenue in 2006 standard would be $11280 in 2006 standard.

Table 2.

Online Apparel 2006
Audience (000) Reach (%) Average time spent
eBay Clothing, Shoes & Accessories 2,218 2.06 0:06:50
victoriassecret.com 539 0.5 0:16:40
Source: Nielsen//NetRatings Net View

Now if we have to forecast that an expected increase of 20% customers is expected in 2008 from 2006 then we see that the rise on customers’ amount to an increase in revenue only from surcharges to be around $132336. Hence, we see that the major factors that we need to consider for forecasting sales are the number of visits to the sites to purchase apparels and the number of new customers we make. Further once we increase our customer base to other companies like Gap or Levi or Old navy will definitely see a further increase in sales revenue in the third to fifth year. So, by the end of fifth year we will expect a sale of $409577.5 with the same assumptions on 20% increase in visits to he sites every year and inclusion of Gap and Old navy the other two popular online shopping destinations in our clientele. Our analysis is based on the assumption that the prices for our product are kept same over the years and other environmental conditions remain constant.

Monitoring and measuring performance

The expected revenue to be earned in 2008 and the expected costs associated in the first year are shown in table 2.

Table 3.

Expected 2008 Data
Sales ($) 158803
Promotion Cost ($) 29,000
Fixed Cost 40,000
Variable Cost 45,000
R&D Cost ($) 43000
Operating Cost ($) 157,000
Profit ($) 1,803
ROI 1.1

The table clearly shows that we expect to break even in the first year itself and the ROI calculated over the first year in 1.1%. We expect it to increase over the years as the cost of our fixed investments will decrease with increasing sales and so will the average variable cost, and revenue will increase thus increasing the profit. Thus, this monitoring of the sales figures will help us to understand the company’s sales situations.

Now if we forecast the increase in sales over a five-year period, we get the following figure.

Sales Forecast
Figure 3.

The above figure shows the sales growth that we expect over a period of five years.

Further we expect the ROI to increase over this five-year period.

ROI
Figure 4.

From figure 4 we see the ROI forecast for the next five years of operation are given. We assume that the other variables remaining same, we calculated the increase in revenue in a nominal 20% rate annually and the basis of which we calculated the ROI. The calculation is shown in the following table.

Table 4.

2008 2009 2010 2011 2012
Sales ($) 158803 190563.84 228676.6 274411.9 329294.3
Promotion Cost ($) 29,000 34800 41760 50112 60134.4
Fixed Cost 40,000 40,000 40,000 40,000 40,000
Variable Cost 45,000 54000 64800 77760 93312
R&D Cost ($) 43000 43000 43000 43000 43000
Operating Cost ($) 157,000 171,800 189,560 210,872 236,446
Profit ($) 1,803 18,764 39,117 63,540 92,848
ROI 1.1 10.9 20.6 30.1 39.3

Clearly table 4 gives the financial forecast over the next five years which helps us to make an approximate estimation of the financial performance of our company ion and ideal situation. Bu t we need to bear in mind that these results will definitely be affected by the market conditions and competition’s strategy which will force us to change our strategy. But overall these will b e the broad marketing strategy that we propose to employ.

The Road Side Service Business Plan Project

Executive Summary

The idea of starting a road side cab services business was driven through our minds due to the fact that it is a highly profitable business based on the fact that many people are becoming very rich in Saudi Arabia due to the existence of oil and growth that is experienced by the country at this point in the economy and most so the region where we have identified as our market stronghold that is on the road sides.

Our target market is also majorly composed of the youth who are still very active and whose population is ever increasing day by day, they love fun hence constant movement and high demand for leisure joints provided by our business.

Our target market is also composed of the older people who are also rich and target leisure joints to enjoy themselves and sped the excess cash at their disposal. The road side cab and cab services business therefore based on the above strong pillars has a very high viability of rapidly growing and widening its market coverage. This in turn has the effect of increasing sales and in future we project that we would control the leisure and fuel services industry by being the market leader.

The most of the advantages that our business have is going to posses is first of all, the proximity of our services to our esteemed customers. Then out restaurants and fuel stations are also located closer to the industries from where we obtain our goods and products hence we are saved from the cost of transportation, this ensures that the costs would incur are narrowly reduced hence high chances that profits would be high signifying prospects of future success in our business operations.

The other competitive advantage that our business is likely to have is that it offers a range of products that are innovatively developed, this ensures that all our customers’ needs are always met and satisfied hence good customer rapport which is extremely good for business.

Therefore, our team of business with all the facts have a belief and in fact acknowledge that the roadside business identified by us if properly and effectively exploited will be a success in the market place and to a further extent become the market leader given the wide gap that is left unfilled by the other market operators.

Business Description & Vision

The main statement of the business is to provide excellent services to its customers and in variety. Also the business is geared towards selling the best and most popular leisure and roadside services at affordable and generally accepted rates.

Road side services will be of most comfort and topmost services that target a rich and top class in the society.

The company vision is to achieve constant and tremendous growth and by far become the market leader within a period of three years with most growth in the first year of operation.

Goals and objectives

The stakeholders’ main objective is to always keep up to date with the most current products and services to their customers. The RSS will also have a company website where the most current products developed in the fun and leisure industry will always be updated by the service providers. Information about the most current models of motor vehicles will also be sought and accessed by the customers.

Goals and objectives to the customers include:

  1. Provide the highest motor vehicle and leisure joints selection and which are the most popular, exclusive designs and models. Lead free fuel will also be available always to ensure the safety of the customers.
    • The RSS will work closely with AAA emergency services of the USA and Touring Club Suisse who are the most established service providers of the same services. The vast experience by the two companies will propel Road Side Services to greater heights in terms of growth targets set to be achieved. Their proximity to industries will also allow them to borrow from the rest in the same business in the local market.
    • This will also enable them obtain most of their products from retailers at fair prices.
  2. Focuses around the lifestyle, culture and tradition of leisure and the perception that the Saudi citizens have on leisure.
    • The business also aims to create a comfortable environment offering luxury and comfortable leather chairs and couches, light music mixes of Arabian music reflecting relaxation at the cool shores and road sides.
    • The business will employ knowledgeable staff in the entertainment and hospitality industry. This will encourage innovation which is healthy for the business as well as ensuring quality provision of services and products.

Road side services company will only employ staff with previous experience and knowledge in the transport and hospitality industry such as the design of luxury resting points or joints and design of luxurious fuel stations. Also they should be willing to answer the customers’ questions and concern on any particular services provided.

The business in this field has always been very sluggish and has a tradition of poor service provision. This has been found out to be because of the rigidity and lack of innovation that has always existed in the industry.

The operators in the industry have always been discovered to only venture in nthe provision of common and obvious products such as only fuel, this had chased away customers from the market and made them resort to other fuel and fuel products market. The market gap created due to this made our team consider getting into the business and fill the gap by taking care of the customer needs.

The list of the key company principles is a wide range and they run from product and service provision to the products themselves. They include:

  • There must be Quality provision of the products and services always.
  • It’s also ensured that the right quantity is always ensured.
  • Meeting Customer needs is what we do.
  • Innovation is what guides us in our path

Definition of the Market

Overall Market

The percentage of Saudi population with vehicles is expected to be on the rise next year, but the recent surge in the industries momentum will increase revenue by 2% to total to more than $50 billion since 2010.

The Market for fuel and hospitality in the Saudi Arabia has also grown significantly in the past decade. They are expected to account for approximately 4% of industry revenue in 2011. Their share of revenue has also increased in recent years, as they accounted for around 2% of industry revenue in 2007.

Production and consumption of automobiles and their accessories has increased drastically in the Saudi. Production increased from 2.8 billion in 2003 to 3.4 billion in 2007, and consumption of fuel and fuel products has exceeded Saudi production, causing a spike in segment importation from the neighboring countries that are rich in oil. Likewise, light fuel prices have increased at a stronger rate than that of heavy fuels over the five year period to 2010, at around 6% per annum on average (Kleckner & Phelps, 2004).

On the other hand, Saudi Arabia is one of the countries in the Middle East who are known to be the herb of oil in the whole world and also a home of very rich and wealthy individuals in the society.

Market Segmentation

Road side services is focusing on the high –end market of premium car owners which is comprised of both males and youth between the ages of 25-65years and are mainly professionals with a medium to high income.

This segment of the population is the most profitable one to deal with due to a large disposable income that they command from the economy. Our market segment comprises of value-conscious clients and customers. They are therefore very sensitive and demands that they are treated with the utmost care and skill (McGrath, 2001).

Apart from the customer segmentation our market is also segmented geographically given the size and population of Saudi as well as customer groups available. Regions with those with lesser income are grouped and priced separately and differently as opposed to high income areas.

Target Market

Road side services company business will target mostly males between 25-35 active young adults, 36-65 professionals and executives and 65-on retired residents that live in the posh estates and areas and have very large income to dispose off.

The low income fun lovers who occupy the large customer base of Saudi Arabia is also widely targeted to always ensure some income for the business. This group of customers is a sure customer base (McGrath, 2001).

Market Share

The business is not already established and has a market share of below 5%. Market is expected to increase steadily by 6% yearly for the next three Years from which the share would even increase further.

Description of Products and Services

The Road Side Services is not like the ones that provided the services before. It is geared towards provision of a variety of services apart from just the fuel and fuel products as the others are doing. In areas with demand for automobile, RSS will provide a slot of motor vehicle in different shapes and designs according to the customer’s specifications and needs. Road Side Services also provides luxury by providing resting joints and restaurants where they give quality meals and drinks to their esteemed customers.

At the petrol stations they offer stands where the clients can afford themselves drinks as their vehicles are being refueled. They also offer tourism services which in handy with accommodation services at considerate fee. Our products are very much competitive and that’s why at the start our business already has a market share of above 6% and a projected rapid growth in market share for the next three years. What makes our products that competitive?

Competition’s Advantages of our products include:

  • Serving food incentives to our customers.
  • Having a variety of products, foods and drinks.
  • Having a variety of recreational activities for our clients to enjoy.
  • Having a live as opposed to acted music such as piano’s player, live bands and many other exemplary services.
  • Our products are also priced in a manner that they are affordable to all our customer categories.

Whatever has advantages must also experience technicalities and therefore our competitive disadvantages, points of weaknesses that if exploited by our worthy competitors then we are likely to be destabilized in business include (McGrath, 2001):-

Competition’s Disadvantages are as follows:

  • We are not specialized in a niche market i.e. our unique market.
  • We are also not customer specific, we don’t target a specific market segment; we target our clients in a mass.
  • Another disadvantage is that we are not alone in the market, there are other providers of the same services.

But all in all our maximization in our advantages is our strength and also our information system controls are so efficient so much our competitors have no access to our information.

Organization & Management

Ours is an organized and efficiently operating venture with a team of qualified personnel headed by an efficiently running management team as well. The business has a well defined structure that is headed by a managing director followed by the heads of various departments who also have personnel working under them. Therefore, information flow doesn’t conflict due to the hierarchy in place.

Operations

Our business is a limited company that exhibits its independent state form the owners who are the share holders. All the employees through the director are answerable to the owners in terms of trying to maximize their wealth as well as helping them meet their profit objectives. It has a certificate or registration from the registrar of companies and therefore is legally allowed to do business.

Fifteen employees including the owner who will take care of the Cigars Heaven business and short/long term of operations. The employee’s positions will be assigned as below:

  • One Managing director, who will be the direct contact with the suppliers of the goods and services required for the success of the business. He is the one responsible for all the daily activities and operations of the venture, in case of any shortcoming he will be asked of what went wrong.
  • One health professional to ensure the safety in the general environmental health of all the services offered raging through from the food and drinks as well as the hazardous surrounding. He also has two officers to support him or her in the implementation. All questions about the products or services offered are directed to this department.
  • Customer relations department is also developed, this department is responsible for creating the awareness of the goods and services so that the consumers and clients are made aware of the services and goods. He or she is also responsible for advertising and sales promotion. He may hire on contract his service men.
  • Ten waitresses in each branch of operation, they will be responsible of costumer services and attending to customers’ needs. They do this by offering customers the best service, relationship building and proving a brief about the products offered.

The employee right from the managers is of the rightful skills and qualification and is selected through the normal recruitment process having met the education requirements put in specified.

Marketing and Sales Strategy

Marketing segmentation has already been covered above and therefore our aim now is just to see how pricing is done as a strategy to attract customers and retain them as well as help in sales maximization (Engelson, 1995). Also to be looked at in this case are the sales promotional tools employed or to be employed to bust sales of the products and services.

Pricing Strategy

Pricing is just one of the four components of the marketing mix elements. The others are product, place and people. Pricing dictates the direction that is likely to be taken by the mix of the four i.e. the prices of products will dictate the kind s and quality of products to be produced by the manufacturers to fit in the needs and affordability of the consumers.

It’s the prices that are dictated by the costs that will determine the extent to which distribution will take place and then again it’s because of price that we will identify and categorize our customers (Engelson, 1995).

Pricing is a complex and sensitive decision making procedure that should be handled with greater care and skill since it is the component that if handled with care result into success and if mishandled can cause the business to fail. A good and workable plan therefore has to be put in place using the required and well placed down strategies (Engelson, 1995).

In strategy development several steps are always taken care of and that is the marketing mix elements apart from pricing itself, the behavior of demand and supply of the product to be priced, also the costs associated with the business to be undertaken must be keenly looked into and most importantly the pricing objectives must also be mentioned in scrutiny.

The pricing strategies

The strategies to be employed now include;- cost plus pricing where the costs are categorized in total and then a percentage margin is added on top of it to determine the profits. Profitability in this case can be predetermined or focused and achieved under normal market conditions.

The second type of pricing is the psychological pricing and this depends so much on the intelligence and the knowledge that the person pricing is able to employ in determining the prices. It’s the best for this kind of business since it augers well with fluctuations. Absorption pricing strategy may also be applied and here fixed costs are normally used to absorb the other costs so that a fair price can be arrived at for the consumer (Engelson, 1995).

Other strategies that could be employed include; penetration pricing, product line pricing and most of all economy pricing which is used mostly to fix prices at the times when the economy is not stable, that is at hard economic times when costs need to be extremely minimized so that prices are just low enough to accommodate the buyers.

Pricing Plan

Given that all the strategies cannot all be employed at the same time, there comes the need for a plan on when and where and to which groups of people to employ which form of pricing. A plan again is just to ensure that there is no conflict in price determination and that prices arrived at are the right ones most so to the targeted stakeholders. For example its in order that a plan is made so that a strategy like the economy pricing is made and used at times when the economy is turbulent and not any other strategy.

Pricing Objectives

The reasons as to why pricing is done are many and diverse if not just accommodative. Pricing may first of all be done so that the goods and services offered are just acceptable to the customers and also affordable to them depending on the class to which each and every customer belongs, the acceptability will only ensure that enough sales are always made (Kleckner & Phelps, 2004).

RSS major objectives in pricing are to ensure maximization in return on investments. It also has the objective of maximizing the shareholders wealth through the issuance of bigger amounts of dividend. The biggest objective is to ensure profitability through maximized sales. The noble objective is to also facilitate the achievement of both social and ethical objectives. Since cigar heavens aspiration is to be a price leader the other objective therefore is to apply the best strategy to obtain the best and competitive prices.

Product and sales Promotional Program

Advertising

  1. Print media
    • Include advertisement ads in trade publications targeting hospitality fans and vehicle owners, nightlife entertainment, lounges, etc like; Monthly entertainment magazine are also used as well as the dailies.
  2. Social media
    • Website is created featuring venue, location, directions of the business venture.
    • Create Face book, Skype and Twitter pages and invite people for friendship with your business.
    • Create promotion video of the venue and upload them in YouTube for viewers to watch, they can also be watched in face book.
  3. Online advertisements can also be used through the purchase of banner ads in local electronic newsletter linked to linked to RSS website.

Sales Promotions tools include

  1. Participation in community events and activities.
  2. Offer loyalty programs and incentives to frequent consumers
  3. Create referral program for members for directional and informative needs.

Public Relations

This can be done through:

  1. Distribution of press release to the media houses featuring the the newly designed products to be unleashed in the markets.
  2. Distribution of monthly press releases to maintain the highest achieved profits and sales and also maintain the top brands and designs in the market.

Direct Marketing

This method always proves to be the most effective measure because it involves dealing with the consumer or client on one on one basis, hence able to judge their reactions and whatever they need. This can be done through the purchase databases direct mailing postcards to targeted possible customers in the given geographical area.

Channels of distribution

Our products and services are mainly distributed to the consumer on a personal basis through our personnel. This is due to the sole reason that our products cannot afford moving through (Kleckner & Phelps, 2004) long chains for the sole reasons that they may as a result be very expensive to the consumers of the products hence discourage business. Transportation to our premises is majorly done by the manufacturers due to the sole fact that we purchase in bulk hence transportation is an incentive.

Financial Management plan (Nugus, 2008)

Balance sheet
Assets Year 1 Year 2 Year 3
current assets
cash 105000 335000 680000
Debtors 35000 40000 45000
long term assets 75000 60000 50000
depreciation 15000 35000 59000
Total assets 230000 470000 834000
Liabili. and capital
current liabilities
creditors 45000 50000 55000
Long.T liabilities 40000 20000 10000
total liabilities 85000 70000 65000
Paid in capital 200000 200000 200000
Total liabilities&cap. 285000 270000 265000
Net worth -55000 200000 569000
Income statement
Year 1 Year 2 Year 3
sales 450000 1100000 1600000
direct cost of sales 90000 320000 450000
other costs of sales 12000 42000 50000
Gross margin 348000 738000 1100000
Expenses
salaries 180600 330000 470000
Promotion 40000 50000 70000
Rent 45931.2 45931.2 45931.2
Utilities 3500 3900 4200
total expenses 270031.2 429831.2 590131.2
Net profit 77968.8 308168.8 509868.8
Cash flow Statement
Cash received Year 1 Year 2 Year 3
Cash sales 490700 1200000 1700000
Additional cash 43800 107000 152000
TOTAL RECEIPTS 534500 1307000 1852000
Expenditures
Cash spent 180600 334000 479000
Bills paid 220000 605000 845000
Additional cash spent 43800 107000 152000
LT liability paid 8000 16000 16000
LT asset purchase 2000 3000 3500
TOTAL EXP. (454400) (1065000) (1495500)
NET CASH FLOW 80100 242000 356500
CASH BALANCE 80100 322100 1817600

Appendices

The business of road side services appear to be doing well and then there is a very high possibility that with stable economic conditions the projected growth objectives for the next three years are likely to be achieved. This is as per the books of account prepared and presented above of which the balance sheet shows a negative net worth at the start which is absorbed in the second and third year subsequently (McKeever, 2010).

There are high prospects of profitability as per the income statements; there is increase in income each year with almost a constant margin.

Reference list

Engelson, M. (1995). Pricing strategy: an interdisciplinary approach. New York : New York book publishers.

Kleckner, M., & Phelps, J. M. (2004). Wham! Bam! Publishing: The Strategic Marketing Plan For Authors. Oxford: Oxford publishers.

McGrath, M. E. (2001). Product strategy for high technology companies: accelerating your. McGraw-Hill: Library of Cogress Cataloguing-in-Publication Data.

McKeever, M. (2010). How to Write a Business Plan. Sydney: Princeton Press.

Nugus, S. (2008). Financial planning using Excel: forecasting planning and budgeting. Canada: CIMA.

Business Plan for a Healthy Take-Away in Brentford Area: Customer Profile. Researches in the Local Area

Introduction: The Brentford Area and the Challenge of the Takeaway Meals Idea

The idea of home-cooked meals is not new; it seems that the meal-producing companies have been claiming since the dawn of time that their production does not differ from home cooking.

However, it seems that in the Brentford area, running a business which involves providing healthy home-cooked takeaway food is rather promising. However, to be one hundred percent sure that the local residents will welcome the new takeaway service with open arms, a thorough research on the customer’s profile must be carried out; otherwise, the supply will not meet the demand.

Concerning the Customer’s Profile

Taking a closer look at the customer’s profile, one can see what exactly the takeaway service must be aimed at.

Local demographics and the takeaway facilities

It is crucial that, according to London borough of Hunslow. Bedford area action plan (2007), the takeaway services have not been fully established in Brentford yet, which gives reasons to think that the venture in question is going to be successful.

Customer research details: the population density

It is also essential to take the population density into account to figure out the best approach towards the locals. According to the information offered by Iselworth and Brentford area profile report (2004), the total population makes 41,659, which is quite a humble number.

In addition, as it is stated in London borough of Hunslow. Bedford area action plan, “The population density of Brentford’s wards is 27.7 people per hectare, based on average of densities across the three wards (London borough of Hunslow. Bedford area action plan, 2007, p. 23).

Therefore, it can be considered that the population density is small. Thus, it is clear that the service must offer something to attract every client. However, with small population like this, it can also be expected that most of the population will soon find out about the service.

The national statistics: some issues to consider

It is also quite peculiar that the people in the Brentford area are mostly white (74% according to (London borough of Hunslow. Bedford area action plan, 2007, p. 52). In addition, it is quite important that the male life expectancy in Brentford is the lowest in England and makes 72.9 years. Thus, the emphasis in the promotion campaign must be on middle-aged European men; it will be reasonable to stress that the takeaway meals offered by the service improve health and increase life expectancy.

About the customer’s demand and the opportunities

It is also extremely important that the health issues in the Brentford area leave much to be desired. According to the information offered by London borough of Hunslow. Bedford area action plan, one can see that the population is in desperate need for better food services: “Environmental improvements and enhancing opportunities to shop locally for healthy food will also contribute to a healthier lifestyle” (London borough of Hunslow. Bedford area action plan, 2007, p. 2).

Conclusion: There Is Still a Lot to Be Done

Therefore, it is obvious that whether the idea of a healthy takeaway service in the Brentford area proves successful depends mostly on the careful research of the expected clientele and a thorough consideration of the issues that may arise in the course of work. Once the service proves to the residents of the Brentford area that the provided meals are completely healthy and that these meals can be compared favorably with the other takeaway services in the given area, the company will have a huge influx of customers.

Reference List

Iselworth and Brentford area profile 2004, <>.

London borough of Hunslow. Bedford area action plan, 2007, <>.

Red Rocks Ambulatory Surgery Center’s Business Plan

The business plan of an outpatient surgical center known as Red Rocks Ambulatory Surgery Center, L.L.C., which is a for-profit business, is presented in this report. The aim of this business is to provide patients with a broad spectrum of diagnostic and therapeutic surgical services. The mission of the surgical center will help in achieving its short-term and long-term goals. From the vision of Red Rocks Surgery Center L.L.C., it is observed that it will provide surgical services with a goal of exceeding patient expectations in a setting designed to create a positive healing experience for its patients and their families. It is a cooperative joint venture with Your Best Health Surgical Services and Healthy Living Hospital. The center will provide surgical services including Surgical Accommodations, Staff Accommodations (Clinical), Staff Accommodations (Administrative), and Patient/Family Accommodations. The plan discusses market conditions and trends. Also, it provides details of licensing, training, and certification requirements. The SWOT Analysis helps in reviewing both internal and external environments. The business plan provides the financial analysis of the proposed business and its financial statements that indicate the financial feasibility of the proposed business. The financial analysis underlines necessary assumptions to support financial projections presented in the document. Also, it provides a brief description of the source of funds. The report ends with Ambulatory Surgery Preliminary Plan and Ambulatory Surgery Schematic Plan that will be implemented by the proposed business.

General Company Description

Red Rocks Ambulatory Surgery Center, L.L.C. (Red Rocks ASC) is a for-profit outpatient surgical center providing patients with a broad spectrum of diagnostic and therapeutic surgical services. Our state-of-the-art facility has been designed and equipped with the most up-to-date medical and surgical technology. The soothing surroundings and dedicated staff are focused on creating a calm and relaxing environment for patients and their families during their surgical procedure and recovery.

Mission Statement

Red Rocks ASC will be the surgical facility of choice for physicians and patients who prefer to undergo elective outpatient surgery in a caring atmosphere with the highest quality of surgical expertise, efficiency and cost effectiveness.

Red Rocks ASC is committed to its values:

  • Quality: Our dedication to quality includes continuous performance improvement that ensures positive outcomes and utilizes innovative methods to assure that we exceed our patients’ expectations.
  • Professionalism: Our entire organization understands that respect and courtesy are vital components of our everyday culture along with integrity and ethics in all that we do.
  • Patient satisfaction: Our teams will strive to exceed our patients’ expectations and needs and our success will be measured by their satisfaction.

Vision

Our vision is to provide the greatest surgical expertise in a caring and comfortable atmosphere. Red Rocks ASC will encompass state-of-the-art surgical technology in a cost effective manner. We will provide surgical services with a goal of exceeding patient satisfaction in a setting designed to create a positive healing experience for our patients and their families.

Red Rocks ASC is a limited liability corporation formed in cooperation between Healthy Living Hospital and Your Best Health Surgical Services. By joining together in a unique partnership to create Red Rocks ASC, our physician and administrative leaders are able to draw on years of expertise in providing healthcare services to patients in our community. Our experienced and knowledgeable staff members and physicians are not just employees but are active and engaged members of the community.

Products and Services

Red Rocks ASC is a cooperative joint venture formed in collaboration between Healthy Living Hospital and Your Best Health Surgical Services. Together, this well-established community hospital and the well-respected healthcare professionals have joined forces to create an ambulatory surgical center (ASC) dedicated to providing patients with the latest advances in surgical care in a state-of-the-art facility. Rec Rocks ASC is committed to providing care focused on comfort and convenience of both the patient and their family.

Surgical Services

As an ambulatory facility, Red Rocks ASC provides general surgical services performed on site in a dedicated surgical facility. This is an outpatient based center with no capacity for overnight stays. All patient care services will be completed and the patient discharged within 10 hours of total care and recovery time at the facility. Primary revenue sources will be generated from surgical services and other medical procedures performed on site. The bulk of payments will be received from reimbursement from insurance companies and patient generated revenue from co-pays, deductibles, and self-pay patients.

Red Rocks ASC is capable of performing a broad array of diagnostic and therapeutic interventions including minimally invasive, percutaneous or laparoscopic and open surgical procedures. Orthopedic, podiatric, pain management and ophthalmology procedures are anticipated to be the greatest percentage of procedures performed. Plastic surgery, otolaryngology and general surgery procedures will round out the main types of procedures performed. The facility will not provide gastroenterology endoscopy services, as a dedicated endoscopy facility is located in the general vicinity of the hospital campus.

Overview of Facilities

Surgical Accommodations:

  • Three Primary Operating Suites, including a dedicated orthopedic procedures room equipped with state of the art clean room filtration technology
  • Minor Procedure/Treatment Rooms
  • Eight bed pre-procedure holding bay
  • Eight bed post-anesthesia recovery bay
  • Two physician consultation rooms for multiple functions

Staff Accommodations (Clinical):

  • Male/Female changing area with dedicated locker space in each for 25 staff members including shower and toilet facilities
  • Employee break room with full kitchen facilities
  • Operating Room Director dedicated office space

Staff Accommodations (Administrative):

  • Four patient registration cubicles
  • Employee break room with full kitchen facilities, restrooms
  • Dedicated office space for scheduling, prior-authorization, coding and billing, health information management, administrative management staff

Patient/Family Accommodations:

  • General waiting area with maximum capacity of 25 people
  • Surgical waiting area capable of holding up to 15 people

Market Analysis

The main marketing mix for this center includes people who are in need of elective surgery. The primary surgical patient needs will include orthopedic, ophthalmologic cataract procedures, gynecological, urological, plastic surgery, and other general surgery procedures that do not require an overnight patient stay (Ambulatory Surgery Centers in the US…, 2016). This may also include patients recovering from minor accidental injury, such as broken bones, whose condition may require non-emergent elective outpatient surgical procedures as part of their treatment and recovery plan (IBIS World, 2016). The center will be able to handle the surgical needs of many patients with its twenty surgeons and other employees that have been put into place for nursing, sterilization and rehabilitation. In addition, low-acuity patients may be referred to the ambulatory surgical center by the hospital, allowing for the facility patient load to remain focused on high-acuity patients whose care requires overnight or multiple day inpatient stays. This increases the volume of surgical procedures for the ambulatory surgical center and helps to accommodate the needs of the hospital, surgeon, and patient for both inpatient and ambulatory surgical services.

Trends

The outpatient surgery center is a perspective-driven example of modern medicine. Plenty of operations that have previously required extensive hospital treatment are now completed in outpatient conditions during one or within several days. The popularity of ambulatory surgery centers is enormous (Boodman, 2014). They have been rising in popularity since the 1970’s (IBIS World, 2016), although there are many concerns about the legitimacy and safety of such centers following the death of Joan Rivers, who was undergoing treatment at a similar type of center in Manhattan (Boodman, 2014). These safety concerns may be assuaged by proper certification for the center, as well as highly qualified staff overseen by the hospital’s large surgery staff of twenty surgeons. The supervising staff can assist in preventing the violations of accreditation that led to Joan Rivers’ death (Boodman, 2014).

The paramount mission of the center for the outpatient surgery is the extension of health care opportunities for patients providing surgical treatment in a quick, efficient, and comfortable environment. The reduction of the time and cost of the treatment occurs due to the use of high-tech equipment and minimally invasive techniques (Al-Amin & Housman, 2012). Therefore, the center for the outpatient surgery is an effective clinical and organizational direction of development for modern medicine and public health. The patient flow should be optimized by minimizing the patient wait time and delays.

Licensing

It goes without saying that any medical activity is a subject to compulsory licensing. To obtain a license, the potential outpatient surgery center should have an appropriate space, a list of necessary medical equipment, and staff members who have obtained valid certificates and licensures (Mercier & Philip, 2009). The consideration of the licensing application takes place within a two-month period. The license applies only to a specific address. The difficulty lies in the fact that each health care service requires a separate license. A specially created registry can: 1) maintain the necessary documentation, 2) registration, 3) temporary disability materials, 4) regulate the flow of patients, 5) receive calls, 6) manage the implementation of hospitalization, and 7) solve transportation issues.

Employees

Employees that are needed per operating room will include one registered nurse (RN), one scrub technician, four pre-operative RNs, four post-operative RNs, two registration clerks, one custodian, two sterilization clerks, and a receptionist with knowledge of medical billing and coding. All employees must have proper training and licenses in their fields (Accreditation Organizations, 2016). The center itself must maintain standards set by the American Association of Accreditation for Ambulatory Surgery Facilities (AAAASF), Healthcare Facilities Accreditation Program (HFAP), and Accreditation Association for Ambulatory Health Care (AAAHC) (Accreditation Organizations, 2016). The AAAASF measures and monitors medical competence. The AAAHC uses peer-based measurements to accredit facilities. HFAP surveys hospitals for quality of care and medical competence (Accreditation Organizations, 2016).

The outpatient center must provide care, and have certified and licensed employees able to provide the quality of care needed for these organizations to approve the center for accreditation so that it can be a trusted as a safe source of healthcare. Aspects of meeting physician needs on both the surgery center’s performance, and that of the main operational room in the hospital, should also be thoroughly considered. In order to avoid any misunderstanding, it is essential to provide investigations and elaborate a uniform standard of health care provision.

Training and Certification

Advances in technology, globalization, and constant organizational transformation are forcing medical centers and their employees to learn and acquire new skills, and developing new business models to work with new technologies. In order not to lose their competitive edge, medical centers have to constantly increase the pace of acquisition of necessary knowledge and skills. Such a need presents the center’s management with a dilemma: On the one hand, employees need more training hours, but in the framework of constant change, the number of hours devoted to training is strictly limited. In this connection, the surgical learning is the best solution to the problem. Using this approach, the maximum efficiency will be achieved through the training of specialists empowering the development and implementation of short and narrowed-focused lessons that are required for surgeons and employees.

The basic idea of surgical training in this business plan is based on the fact that employees do not need comprehensive training, concerning the new technology or program (Maruthappu, Duclos, Lipsitz, Orgill, and Carty, 2015). They will however, need to learn more specific aspects related to the current operation.

The reduced content should be transformed into short courses that are fast to develop and easy to use. Short training programs are more easily integrated into the working schedule of the staff. The attendance of training courses will be increased by the fact that the programs are short and more engaging As a result, the progressive ambulatory surgical center will benefit from optimally trained and certified staff.

Construction

In the planning of a new ambulatory surgical center, construction factors are another important consideration. Constructing a new space will include the cost of construction. In addition, it will also include the need for zoning and bringing the building up-to-code, according to city requirements. The design of the building must include handicap accessibility, since many patients may require the need for wheelchairs before or after surgery. Parking should be ample and easy to access for patients (Boodman, 2014). The design of the outpatient surgery center should follow the overall design of the hospital to provide continuity. All the rooms should be equipped with special chairs and other utilities necessary for the pre- and post-operation periods. The number of operating rooms should be approximately seven, to provide timely surgeries. At the same time, the center should include physician space; such as changing rooms and workspace for paperwork. Staff space, such as changing rooms, should also be included. It is also important to point out that the creation of a break room for relaxation and rest will reduce the stress level of employees. Its design should be performed in a shade of green, as such color contributes to pacification and comfort.

The billing system should be organized appropriately to guarantee the calculating costs of medical service queries to the insurance companies and their processing. Revenue cycle management activities including prior authorizations, calculation of copayment, cost-share and deductibles and third party payer claim processing will be performed on a dedicated practice management system.

Equipment

The equipment of the center for outpatient surgery will allow for providing virtually the entire spectrum of surgical operations from the day surgery category. In particular, the following equipment is necessary to provide the appropriate treatment:

  • Endoscopic equipment for endo-surgery;
  • Holmium laser that was previously inaccessible under the conditions of ambulatory operations to treat diseases of the bladder wall using it as a laser scalpel;
  • Ultrasound devices in both the operating and observation rooms;
  • Medical facilities including apparatus for RFA and EVLT, heart monitor and / or a pulse oximeter, blood pressure monitors, ventilation apparatus, defibrillator, operating table, medical couch;
  • Consumables: disposable kits for the operating field, intravenous catheters, gloves, etc.;
  • Sterilization equipment;
  • Medicines according to the profile of the medical center;
  • Anesthesia equipment, equipment tracking, monitors, and others will ensure the high-quality of operations using all the possible kinds of general and local anesthesia. For example, equipment installed for the anesthesiologist and expert classes will include anesthesia-breathing apparatus of Draeger.

Daycare chambers will be equipped with functional beds, Ventilator Puritan Bennett 560, and oxygen concentrators. The installed equipment will allow monitoring the condition of the patient transmitted from the operating room, and to react promptly to any deviation from the norm.

Expenses

The main costs for the implementation of the business plan will relate to equipment and facilities as well as the medicine purchase. When planning costs, the fact that the center will be inactive during the licensing period should also be taken into account. Staff costs related to wages includes the monthly labor costs of personnel and tax rates. Capital expenditures include the following expenses:

  • Building of premises for the outpatient surgery center, design, and repair facilities;
  • Licensing;
  • Equipment, furniture, air-conditioning, and ventilation system.

Fixed costs related to the work of the center will comprise:

  • Production costs include cost of materials for the surgery complex, repair costs, clothing for staff;
  • Administrative and office expenses such utilities, current expenses for office supplies and materials for office equipment, security alarm);
  • The total labor costs;
  • Constant marketing costs.

In addition, electricity, thermal energy, and other resources should be considered while planning costs.

Operational Plan

Red Rocks ASC was founded by Healthy Living Hospital, in conjunction with Your Best Health Surgical Services. It is operated and managed by Red Rocks L.L.C. Board of Directors, with the help of many others, as seen in the organization chart.

Operational Plan

Surgeons hold leases with Red Rocks Ambulatory Surgery Center, L.L.C., which require a renewal process every three years. Red Rocks ASC operates with the guidance of facility policies, which are to be followed strictly by all employees. Facility policies are reviewed by the policy committee every five years or sooner if needed.

All potential employees of Red Rocks ASC must undergo a face-to-face interview process, pass a pre-employment drug screen, be current on all necessary immunizations as outlined in the employee packet, including influenza, and hold an active license (if necessary) in the state of Arizona. Once hired, employees are required to complete a mentorship program through Red Rocks ASC. The mentorship program begins with a minimum of three days of training, with additional days required per specialty field. Training will include an overview of the company, expectations, policy overview, disciplinary action steps, a tour of the facility, and two to six weeks of specialty training with a mentor, depending on the area of interest. Employees must be able to pass a skills interview by the end of the mentorship period, or continue with additional training until competency is met. Employees must be able to pass a random drug screen and stay current on necessary immunizations.

In the event of unforeseen circumstances, such as a reduction in patients or employees, Red Rocks ASC will consult with the Board of Directors to make the best decision in order to continue providing patient care. In the event of a decrease in patient load, Red Rocks ASC will make every effort to continue to employ every employee, with the possibility of an employee transfer to Healthy Living Hospital, with every intention to return to Red Rocks ASC when the patient load increases. Red Rocks ASC will make every effort to prevent employee loss due to a decrease in patient load, by actively advertising services and striving to maintain and improve patient satisfaction. In the event that Red Rocks ASC experiences a decrease in employees, advertising efforts will increase in order to maintain employee and patient satisfaction and quality of care. Employee transfers from Healthy Living Hospital will be honored as temporary or permanent employees of Red Rocks ASC.

Red Rocks ASC will strive to maintain high patient satisfaction, with the goal of always improving. Patient satisfaction surveys will be offered during discharge and mailed home to those who wish to complete the surveys at a later date. Results of the survey will be kept in a database to track patient satisfaction and to help develop plans of improvement.

SWOT Analysis

SWOT Analysis Template

Situation being analysed: Red Rock’s Ambulatory Surgery Center

Strengths
Close proximity and affiliation with the hospitalSkilled surgeons and staffOutpatient services with hospital affiliation

Freeing up of hospital beds due to the transferring of routine procedures to the ASC

Quicker discharge rates of patients

Fewer postoperative complications

Less patients in operating rooms, more in recovery

Decreased patient wait times

Continuity of care

Financial savings

Reduction in hospital-acquired illness

Weaknesses
Hospital affiliationCompetition by outside forcesConstruction costs and legality issues related to construction of the ASC

Newer facility will take time to develop a presence related to its own entity

Opportunities
ASC affiliated with hospital, yet will have opportunity to work as an entity of its ownUnique patient selectionClinical diagnostic studies due to newer technology

Consultative reception

Diagnostic use of equipment

Comprehensive treatment

Organized patient follow-up

Opportunity for staff to gain more training

Threats
Competition from other ASCs and hospitalsFinancial RisksManagerial Risks

Natural Disasters

Strengths

A significant strength would be the close association and location near to the hospital. Many patients will express misgivings about going to ambulatory surgery centers because they are not ‘real hospitals’, such as the fears expressed by Wendy Salo (Boodman, 2014). Being attached to a hospital with such a reputable staff of surgeons can help ease the concern of some patients. It can also provide more outpatient services with a hospital affiliation (IBIS World, 2016). One of the most important advantages is the unloading of hospital beds by transferring part of routine surgical interventions in terms of health centers, which operates in the hospital structure. At the same time, the organization of early discharge of patients from the hospital with subsequent follow-up care in the clinic would benefit both the center and patients (Merrill & Laur, 2010). All patients will be placed in the superior chambers equipped with modern facilities and are under round-the-clock supervision of qualified medical staff so that they will feel comfortable and calm. Moreover, the postoperative complications in the surgical day hospitals are on average less than 1% (Carey, Burgess, & Young, 2011). The quality of operations in the outpatient surgery center is defined by experienced surgeons and nurses. Comparing volumes within the main operating rooms with those of outpatient environment, one might note the increased capacity of the latter. What is more, one might note such advantages as follows:

  • Reduced wait times for patients. Outpatient surgery centers have shorter wait times and fewer budgetary constraints (IBIS World, 2016);
  • The release of specialized surgical hospital beds for the treatment of clinically complex patients;
  • The same surgeon holds the complete continuity of the examination and treatment of patients; preoperative preparation, surgery, postoperative treatment until the patient’s hospital discharge;
  • Patients stay at home in habitual environment (Grisel & Arjmand, 2009);
  • Active lifestyle contributes to the rapid recovery;
  • Reducing the probability of in-hospital infections and thromboembolic complications in patients;
  • Significant financial savings (Ambulatory Surgery Center Association, n.d.).

Weaknesses

A significant weakness is the ambulatory surgery center’s affiliation with a hospital. While this can be viewed as strength, it doubles as a weakness. Both the ambulatory surgical center and the surgical services department of the hospital have goals based on volume and revenue. In addition, competition from other local ambulatory surgical centers could potentially reduce the volume of procedures, thereby reducing revenue (Courtemanche & Plotzke, 2010). Another weakness is the need for the center to be constructed. Construction costs, zoning, and time are all involved in the construction process, which can be a weakness for the center. Lastly, this new ASC will take time to develop a presence and reputation within the community in order to gain both respect and acknowledgment as its own entity rather than being known as the hospital’s surgical center.

Opportunities

The content of operations of the ambulatory surgery center is determined by the variety of forms of its activity:

  • The outpatient center is part of the overall hospital, but it will be its own separate entity (Pickles, 2015). This means that the center will have its own financial statements. It also requires a deep understanding of the regional health care delivery system in order to provide legally and ethically sound care (Pickles, 2015).
  • Selection of patients with surgical diseases among the population including the workers and employees of industrial enterprises, institutions, and other organizations;
  • Implementation of permanent relationships with the clinics and dispensaries;
  • Clinical diagnostic study of supervised patients using modern methods and equipment;
  • Consultative reception of patients of surgical clinics and dispensaries for the selection of patients requiring surgical treatment; definition of the indications for surgery, preoperative examination, the scope of the operation, and capabilities;
  • Diagnostic use of invasive techniques, performance of operations according to the approved list, the observation of patients operated on in the next few hours after surgery in the recovery room of the hospital, day surgery follow-up treatment at home;
  • Comprehensive treatment of patients with surgical diseases including drug and infusion treatment, the use of extended wear bandages, physiotherapy, plasmapheresis, medication blockade, and the necessary range of rehabilitation measures (Starr, 2012);
  • Organization of follow-up care for operated patients for a timely implementation of the necessary therapeutic and preventive measures to prevent disability and reduce its period. Research and comprehensive assessment of the short- and long-term results of the surgical treatment and the development of evidence-based recommendations.
  • Further training of surgeons and nursing, training of graduates of medical institutions.

Threats

The main threats include competition with other hospitals and other centers. This can especially be an issue with the large amount of distrust people feel for outpatient surgery centers (Boodman, 2014). Competing with other organizations can entail providing the best care possible. It can also involve providing a more comfortable and compassionate environment that will be memorable to patients in their difficult and often scary times of receiving surgery.

Initial capital requirements are one of the biggest threats facing ASCs (IBIS World, 2016). Being part of a hospital can help this center establish the capital needed to get started. Still, it will be a major financial endeavor. One of the other project risks is associated with possible changes in the financial situation in the country, due to the influence of internal or external factors. One more threat category may include a possible increase in costs and timing on the establishment of the center’s services or a possible reduction or increase in prices for services.

The probable management risks are related primarily to the inability of managers or a team to implement the project objectives and to achieve goals set in the business plan. The reduction of this type of risk is largely determined by the effective selection of personnel. To reduce this type of risk, it is possible to use the potential of employment agency as well as the use of the resource business consultants, who have extensive experience in implementing projects.

Other risks include all kinds of risks of natural disasters, other force majeure related to property damage and clients’ lawsuits in connection with human error. The above risks are easily minimized through insurance mechanisms. Based on the foregoing, all of the project risks can be regarded as moderate that is quite acceptable for the successful implementation of this business plan. Finally, taking into account all the above issues, it seems possible to implement the business plan within half a year.

Financial Analysis

Underlying Assumptions

The Collaborative Learning Community (CLC) Red Team has based this financial analysis on the following:

  • Red Rocks Ambulatory Surgery Center, L.L.C. is expected to yield an annual revenue growth rate between 7%-8% per year. With the recent changes to Medicare reimbursement, this rate may be slightly lower than expected, although, the center does expect yearly revenue growth (Koenig, Doherty, Dreyfus, & Xanthopoulos, 2009, p. 22).
  • Due to the collaboration of Healthy Living Hospital and Your Best Health Surgical Services, this entity will have the financial backing to proceed with the addition of the outpatient surgical center that will be constructed in a new space attached to the hospital.

Sensitivity Analysis

The CLC Red Team understands that due to Medicare reimbursement rates that there may exist a slowing of the expected yearly revenue growth, but it is not deterred by this because it recognizes that the need for surgical procedures will not decline due to changes in the economy. In addition, there are those individuals who are covered by private insurance who will need Red Rocks ASC’s services: therefore, the CLC cannot find a reason as to why this organization will not enjoy financial growth.

Source of Funds

Source of Funds

General Assumptions

General Assumptions

Sales

Profit and Loss Statements

Profit and Loss Statements

Balance Sheet

Balance Sheet

Balance Sheet

Cash Flow Analysis

Cash Flow Analysis

Cash Flow Analysis

Breakeven Analysis

Breakeven Analysis

Breakeven Analysis

Appendices

Ambulatory Surgery Preliminary Plan

Ambulatory Surgery Preliminary Plan

Peripheral Core

Pre-op Holding

Storage

The preliminary plan clarifies the ambulatory surgery unit space requirements by showing the location of all the fixed walls and open areas and identifies entrances, exits, and exact traffic patterns.

Ambulatory Surgery Schematic Plan

The schematic plan shows all of the specific movable modular casework, modularfurniture systems, and materials handling components appropriate for a typical ambulatory surgery unit.

Ambulatory Surgery Schematic Plan

References

Accreditation Organizations. (2016). Ambulatory Surgery Center Association. Web.

Al-Amin, M., & Housman, M. (2012). Ambulatory surgery center and general hospital competition. Health Care Management Review, 37(3), 223-234.

Ambulatory Surgery Center Association. (n.d.). ASCs: A positive trend in health care. Web.

Boodman, S.A (2014). Popularity of ambulatory surgery centers leads to questions about safety. Kaiser Health News. Web.

Carey, K., Burgess, J. F., & Young, G. J. (2011). Hospital competition and financial performance: The effects of ambulatory surgery centers. Health Economics, 20(5), 571-581.

Courtemanche, C., & Plotzke, M. (2010). Does competition from ambulatory surgical centers affect hospital surgical output? Journal of Health Economics, 29(5), 765-773.

Grisel, J., & Arjmand, E. (2009). Comparing quality at an ambulatory surgery center and a hospital-based facility: Preliminary findings. Otolaryngology – Head and Neck Surgery, 141(6), 701-709.

IBIS World. (2016). Ambulatory surgery centers in the US: Market research report. Web.

Koenig, L., Doherty, J., Dreyfus, J., & Xanthopoulos, J. (2009). An analysis of recent growth of ambulatory surgical centers. ASC Coalition. Web.

Maruthappu, M., Duclos, A., Lipsitz, S. R., Orgill, D., & Carty, M. J. (2015). Surgical learning curves and operative efficiency: A cross-specialty observational study. BMJ Open, 5(1), 1-7.

Mercier, D., & Philip, M. (2009). Is Your Ambulatory Surgery Center Licensed, Accredited or Certified? ASA Monitor, 72(8), 10-14.

Merrill, D. G., & Laur, J. J. (2010). Management by outcomes: Efficiency and operational success in the ambulatory surgery center. Anesthesiology Clinics, 28(2), 329-351.

Pickles, V. (2015). Strategic planning for your surgery center. Ophthalmology Management. Web.

Starr, C. (2012). Ambulatory surgical centers: Good for you and your patients. Medscape. Web.

SWOT analysis. Businessballs.com. Web.

Business Plan Management Strategies

The Clinical Health Group director has the mandate to ensure that the company makes a step forward to profit. In any case, the loss is noted. Various factors have influenced the loss, and because he is a new director, an operation carried out reveals that the loss is cognitive and notable. Therefore, in this particular case, the director’s reputation and job security will be of much help to help him sustain and maintain the position. There are financial strategies that are to reduce the losses incurred in the foodservice budget. Among the economic plan, the commitment of the stakeholders in the company will be essential to enhance the integration of those strategies so that the losses can be reduced strategically.

One strategy would be avoiding taking impulsive actions. When the director acts quickly with no thoughts about future consequences would be unsafe for the company. Such actions are termed suicidal thoughts, which can harm others, the firm, and even oneself. It is advised that intensive thinking should be enhanced to ensure good health in budgeting and companies’ financial status (ASC 326 financial instruments—Credit losses, 2020).

The second strategy is by considering professional support with the aid of emotional support. Professional help will be accosted with experience from other directors in a similar field and how they cope with losses. Assessing the situation will be a strategy to enhance that the director knows well the problem causing losses and how to change and overcome the loss challenge. Another approach will be keeping book records so that the director can analyze and evaluate the possibilities of failures and how the losses are incurring. With the documents, it is easier to close those gaps well.

It ensures that they cut back on non-essential expenses for some time to enhance recovery from such loss. This will reduce financial losses in activities that are not beneficial at the time. Increasing other sources of income will promote closing ports of losses and cover up the problem (Vijaya Kumar, C., 2018). After ensuring that the company is recovering, it is advisable to make sure measures are strictly put in place to ensure similar losses are not experienced in the future. The company should also take a loan in preparations to mend that challenge and ensure they cover up the problem to make a profit.

The loss incurred in Clinical Health Group has been because of poor utilization of resources. The company is intensively investing in places that are not making profit well (ASC 326 financial instruments—Credit losses, 2020). This causes drainage in the capital set to enhance the smooth progress of the firm. While budgeting, they were planning to make the company budget for non-essential places that will drain resources aimed for profit-making channels. However, there is no way to eliminate losses permanently. It is crucial to minimize losses because of the many channels available to cut losses challenges (Vijaya Kumar, C., 2018).

The director will therefore invest in better stock management and offer security around their products. The challenges when dealing with the organization are enjoying the four financial principles: consistency, revenue recognition, objectivity, and matching.

In conclusion, companies may suffer losses due to poor management and investing in areas not making profits well. To enhance this challenge is controlled the organization will be required to stand firm and ensure that they check intensively on areas that contribute to such losses. With that, the overall financial health will be outstanding.

References

ASC 326 financial instruments—Credit losses. (2020). Wiley GAAP, 239-249. Web.

Financial functions. (2018). Principles of Financial Modelling, 243-255. Web.

Vijaya Kumar, C. (2018). Public Financial Accounting and Auditing: Principles and Practices. Public Budgeting in India. India Studies in Business and Economics. Springer, New Delhi. Web.