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Cast study: apply your understanding – You are L. Carter, a…
Cast study: apply your understanding
– You are L. Carter, a strategic management account working for HF&H - a large accountancy practise. One of HF&H’s clients is GGG. A partner in HF&H has left the following note on your desk:
– Note
Hi L,
I’m going to be meeting several key managers from GGG shortly and I need you to prepare some briefing notes for me. I’ve left you a briefing document giving you some background information about the company.
Once you’ve familiarised yourself with the briefing document, please prepare some notes, which need to include the following:
– Analyse the opportunities available to GGG, using Ansoff’s strategic directional growth vector matrix.
– Evaluate the opportunities available to GGG in each of the four areas of the Ansoff strategic directional growth vector matrix using Johnson, Scholes and Whittington’s Suitability, Acceptability and Feasibility framework.
– Recommend, with your justifications, which strategic directions, as set out in Ansoff’s strategic directional growth vector matrix, would be most appropriate for GGG to follow.
I’m meeting the clients in 45 minutes, so please have the notes ready by then.
Thanks P.
– Briefing Document
GGG is a privately owned unlisted company which runs 20 residential care homes for the elderly. A residential care home for the elderly is a building where a number of older people live and receive care (that is, their physical needs are provided for), normally on a fulltime basis. The elderly residents may pay the care home fees themselves or they may be paid by their relatives or by the local government authority.
The elderly residents of GGG’s care homes are all capable of making decisions for themselves. All of GGG’s care homes are located in and around two cities both located in the south of country X. GGG employs around 400 staff in the care homes, some of whom work part-time, and a small team of highly experienced administrators. GGG’s care homes all have modern facilities and their staff are highly trained and dedicated.
GGG has always been a profitable business, even though its care homes normally have a small amount of spare capacity. GGG has approximately 25 per cent market share in the south of country X. The remainder of the market is shared by a small number of local government funded and operated care homes and some other small private businesses.
Due to the rising costs of operating care homes as a result of increased regulation and the general economic environment, a number of small privately owned care homes in the region have recently closed. The owners of some other privately owned care homes are considering closing or selling them. GGG is also aware that this trend is occurring nationally across country X.
A national shift in the demographics of the population in the last 30 years has resulted in a significant rise in the proportion of elderly members of society. Added to this, the increased social movement of families has resulted in an increasing demand for care home places for the elderly.
GGG undertakes limited advertising, relying more on word-of-mouth recommendations and referrals from local hospitals and doctors to obtain its customers.
The prices charged to care home residents by the local government authority run care homes are lower than those charged by GGG, due to central government subsidies. However, the Managing Director of GGG is confident that the services and facilities provided by GGG are superior to those offered by the local government funded care homes.
Although GGG currently offers only fulltime care for its elderly residents, there is a growing need for the market to offer ‘relief care’ packages. This is where elderly people, who do not normally live in residential care homes, could use any of the 20 care homes’ facilities for short periods of time (normally 1 week), in order to enable their normal carers (usually family members) to take holidays or rest periods.
A number of GGG’s elderly residents are often referred to local hospitals by their doctors for treatments and therapies. Many of GGG’s staff are fully qualified nurses and these treatments and therapies could be undertaken by the staff of GGG in each of its care homes. These hospital visits for treatments and therapies can be disruptive and upsetting for residents who often prefer to remain in GGG’s care homes and be cared for by staff with whom they are familiar. However, if GGG were to offer these additional facilities within its care homes it will need investment in training and new facilities.
Your task: Prepare the notes as requested in the note from P.
