1. Statement of opportunityThe manager’s plan is to have orthopedics surgery practice that offers MRI services to the increasing population in the area and be able to be the larges service provider at a lower cost is an opportunity.
There is an increasing population which needs to be exploited and therefore the managers’ vision is good. The opportunity here is the increasing demand of MRI services due to increasing population. The increase in population and increase in levels of income due to entry of new companies to the area is creating an opportunity for the company to exploit. Another opportunity available is that the current services providers are offering MRI services at a higher rate which is not affordable to the local community, therefore a company offering MRI services especially portable at a lower price will have an advantage.The importance of the manager turning a challenge into an opportunityThe administrator taking advantage of the challenge into an opportunity is good because this will give the business competitive advantage as compared to the existing firm. The challenge will offer profit to the organization.
The organizational structure that will need to be changed is the human resources structure, departmental structure, and job structures. There will be product/service differentiation which also leads to organizational structure change. Currently the organization is structured to offer specific service, however when there is introduction of new services which requires the introduction of new human resources in senior position requiring there departments. The portable MRI services will increase the number of departments as well as staff members.
This cannot be absorbed into the existing structure therefore, requiring a new structure. There is need to introduce new staff who will be handling the departments. There will also be budget of new equipment as well as increasing the office space for the new equipment and employees. This will also need an extra parking space which will lead to structural changes of the organization structure. The finance department will need to be restructured to include funds for the new venture. In terms of the structure of directors will also need to be changed since the new capital will require to be injected if the current directors are not competent they will need to have a better working directors.
Organization structure divines how the organization handles there tasks and jobs and how groups associate within the organization. Therefore anything that deals with work specialization, departments, formalization of activities, and organization culture will need to be changed and be affected by the new introduced product.Environmental factorsIn such kind of business there are a number of environmental factors that affect the business operations. This environmental factors include; competition, competition, reimbursement, political, employment, economical, social, technological, customer royalty, strengths and weakness, opportunities and threats.CompetitionTo begin with competition is one of the macro-environment factors that affects business in any business set up. Competition in this area seems to be high although they are offering services at high rate. The companies currently offering and operating MRI services in this locality, they are also offering medical services at a higher rate.
To be inline with competition the firm needs to enter into the market over MRI services at a reduced cost. This will be acceptable by members of the locality. However when entering the market the company has to do with stiff competition from the existing service providers although they are not offering portable MRI service. The administrator should expect the current service providers to venture into portable MRI services creating new competition which needs to be considered and necessary steps to be taken to be able to handle such competition. The administrator should also expect competition to emerge from firms entering into the area and subsidies from the government to government hospitals to provide the services at a lower rate that is acceptable to the community. This may eat the profits of the firm. Most of this companies that will cause challenges have already achieved there visions of making profits, they will be offering challenges at break even point to the local community meaning that the profits of the company will come down. To beat this problem the manager should adopt cost leadership and product differentiation in service delivery.
He should also organize advertising activities such as seeking endorsement from celebrities at the same time they should offer incentives to the customers so that they will motivate them and retain them.ReimbursementReimbursement is one of the most challenging environmental factors in medical services. Portable facilities offering MRI services to customers, who are not satisfied will be challenging since it will not be easier to determine the level of satisfaction of the customer. People may come and demand reimbursement for there money when actually there is no need for reimbursement. People may demand reimbursement during times when there is financial problems causing a lot of unnecessarily problems to the financial system of the company, this may lead the facility to learn out of cash and be able to meet customers demands due to constant reimbursement. A proper system of reimbursement should be put in place so that there is need to know exactly who actually has a genuine claim for reimbursement.
EmploymentWhen the company will start offering MRI services, employment will be a challenging factor to the firm, as employment will need to have extra cash that will enable in paying salaries and wages to the new staff. Getting the best human resource is another challenging factor.PoliticalA company that will be operating in this environment should update themselves with issues relating to the rules and regulations governing the MRI services.
They should also be able to know the rules and regulations governing employment and competition among the players in the industry.EconomicalThere is an increase in the cash flow within the local population since most companies have moved in and therefore the company expects to have a stable cash flow that will sustain her activities.Social The company should be able to deal with threats emerging from customers moving to oppose the idea of a portable MRI services. There is change in lifestyles and life patterns among the residents which mean people have changed their culture and will wish to have a service that takes care of their needs.TechnologyThe company by offering a portable MRI services will be staying up to date with technological factors which are important in service delivery to the population of the world today. It is vital for any company operating in this industry to be up to date with technological changes.StrengthsIt will be the best company to launch a portable MRI service in the area thus increasing the customer’s confidence.
The company will have high operational margins as compared to other companies operating in the market. There is also the uniqueness of the product that is being offered by the company. The company is situated in a good location that offers good services.WeaknessesThere are too many companies operating in the industry offering the same services. The company also will be faced with the problem of trying to sell unknown products in the market. There is also lack of manpower at the moment since they will be required to increase man power.
Opportunities There is large increasing market due to the moving in of companies from other areas to the local population. There is also a demand for health services in the area which is also increasing in the area.ThreatsThe threat here is the increase in the competition from other industry players.4.The human resources required to handle strategic goals is that one of senior positions in the services. The new portable MRI equipment will need to be maintained, and this will need new staff members to be able to handle them. Therefore the management through the administrator should plan to increase staff members not only the senior positions but the junior positions.
He should also swap places in the existing staff members; this will increase the success of the firm. The aim of human resource planning is to select, motivate and retain the best human resources to avoid high turn over.5.There are various financial plans that will be used for this project. These financial plans include:-Line budgetLine budget for personnel servicesCostsRadiologist wages500,000Technical staff wages240,000Additional office spaceTotal740,000Functional budgetCostsRadiologist wages500,000Technical staff wages240,000Additional office space (20 x 5000)100,000Maintenance cost30,000Operating costs50,000Total920,000The projected number of MRI services is 10,000. Therefore, the cost per MRI service is :920,000/10,000 = $ 92 per MRI SERVICETherefore, the cost per MRI will be US $92.
A program budgetCostsRadiologist wages500,000Technical staff wages240,000Additional office space (20 x 5000)100,000Maintenance cost30,000Operating costs50,000Total920,000If the clinic is projecting to have 3,000 visits, the MRI services will be charged at 920,000/3000$307 per MRI service.Note. This cost does not take into account the cost associated with the equipment purchased. However the cost will be higher than this if depreciation is taken care of.
ReferencesArmstrong G. & Kotler P. (2007). Consumer Markets: Influences on consumer behavior, Principles of Marketing.