Management Consulting Template: “The Pearl Industry: Is there a market opportunity?”) • Template provided (fillable)

TABLE 5 – RECOMMENDATION DETAIL # 1

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TABLE 5 – RECOMMENDATION DETAIL # 2

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TABLE 5 – RECOMMENDATION DETAIL # 3

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TABLE 5 – RECOMMENDATION DETAIL # 4

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TABLE 5 – RECOMMENDATION DETAIL # 5

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APPENDICES / TABLES

REFERENCES

Option 1

Briefly Identify & Describe the Option

One of the strategies that Kindred Home Care wanted to explore was a franchising strategy. The purpose is to sell franchises through Canada. Even though this strategy takes time to implement, it is very profitable, and with a very low risk of failure. Franchising has different definitions, some of them describe a franchise as a distribution channel, a marketing channel, an organizational form, and a form to exploit the intellectual property. By creating franchises, Kindred Home Care will exploit its intellectual property by selling the franchise, which will eventually result in more money. (Spencer, 2013)

Benefits/ Advantages

Some of the great benefits of creating a franchise is that there would not be an initial investment from Kindred Home Care. In Canada and the United States, franchising models had more than

$1 million in gross margin. Also, it is a low-risk strategy since buyer must pay a non-refundable initial fee. Finally, Kindred Home Care does not have to be involved on day to day operations.

Critical Success Factors

The key success factors for a franchising strategy to work is to build a strong internal system. Also, part of building this strong internal system is to develop an internal software to keep track of the franchises. Also, a key factor to make sure this is a successful strategy, is to bring the right people as consultants. Kindred Home Care needs to make sure they get the right consultation, such as binging in Lore Mackenzie into the team. In the past, she has successfully developed over 90 franchises in Canada. It is extremely important to have someone that fully understands this strategy.

Threats/ Risks

The threats of developing a franchise vary. The main one is that it takes longer to fully develop the strategy and to start seeing a return on investment. Kindred Home Care has the objective to increase the revenue to $50 million in 2022. The implementation of this strategy will take more time that the one they estimated.

Also, even though franchising I very profitable, it is most profitable at an enterprise level and not at a corporate level.

Why is this your recommended Strategic Option?

Franchising is the strategy that I would recommend. Mainly because it means a lower risk from Kindred Home Care. This means the monetary inversion is low. And despite being a longer- term, it is highly profitable.

Option 2

Briefly Identify & Describe the Option

Kindred Home Care also has the option of choosing the acquisition route. This means the company is looking to expand within Canada by acquiring two companies. One from Halifax and the other one from New Brunswick.

Benefits/ Advantages

By acquiring two companies dedicated to health care Kindred Home Care will scale up their business. One of the high benefits is that the company understands the market and the customers. Also, these two companies are already generating revenue. They also do not have to spend money training employees or looking for customers, both companies are active and already count with both of them. Both are within Canada, which means the company already understands the legal part of it.

Critical Success Factors

Critical success factors for this strategy to work include having the right amount of money to acquire. It is also extremely important to translate the company’s mission, vision, and objectives to the acquired companies.

Threats/ Risks

Part of the risks include spending a large amount of money without the reassurance that business will continue, they can only anticipate it will go well, but is still a risk. Similarly, by acquiring the companies, they are absorbing several employees and customers, which usually men's great news, but if it is handled wrong it can backfire. Employees need to get used to new management and it can be a rough transition. Also, customers may need to adapt to new management, if this goes wrong, they might lose them.

Why is this your recommended Strategic Option?

This option is recommended in terms of reaching the objective of generating the $50 million faster. The main issue with this option is that Kindred Home Care does not count on enough money to invest in these acquisitions. Not applicable.

Option 3

Briefly Identify & Describe the Option

Exploring Kindred Home Care has the option to expand their market through the United States of America, instead of only staying in the Canadian market.

Benefits/ Advantages

There are several benefits and advantages of moving the market to a new country such as the United States. The first, around 10,000 people are turning 65 or more years old each day, which translates into a huge market. Another benefit is that the rural market in the US is bigger than in Canada. In general, the health care industry is bigger in the US.

Critical Success Factors

The principal factor to assure this strategy will be successful is to be sure someone in the team understands fully United States law regarding health care.

Threats/ Risks

It is understood there is a huge market opportunity in the United States of America, but there are also some risks followed by this. First, Kindred Home Care does not fully understand the legal part of the health care industry in the US. Secondly, even though the health care industry is higher, it requires more trained personnel, such as nurses and physicians. Kindred Home Care does not possess this type of personnel.

Why is this your recommended Strategic Option?

There is a great opportunity by expanding to the United States of America. Still is very risky to only choose this strategy to reach their goals. Not Applicable.

Option 4

Briefly Identify & Describe the Option

In the proposal, a mixed approach was mentioned. NEXT Consultancy believes that by combining some of the strategies mentioned above, Kindred Home Care will take greater advantage. This approach suggests going through the franchising route through Canada and expanding to the United States of America.

Benefits/ Advantages

In Canada and the United States, franchising models had more than $1 million in gross margin. Also, it is a low-risk strategy since buyer must pay a non-refundable initial fee. Finally, Kindred Home Care does not have to be involved on day to day operations. By opening franchises in the US, Kindred Health Care will have more customers, around 10,000 people are turning 65 or more years old each day. Another benefit is that the rural market in the US is bigger than in Canada.

Critical Success Factors

The key success factors for a franchising strategy to work is to build a strong internal system. Also, part of building this strong internal system is to develop an internal software to keep track of the franchises. Also, a key factor to make sure this is a successful strategy, is to bring the right people as consultants. Kindred Home Care needs to make sure they get the right consultation, such as binging in Lore Mackenzie into the team. In the past, she has successfully developed over 90 franchises in Canada. It is extremely important to have someone that fully understands this strategy.

Threats/ Risks

The threats of developing a franchise vary. The main one is that it takes longer to fully develop the strategy and to start seeing a return on investment. Kindred Home Care has the objective to increase the revenue to $50 million in 2022. The implementation of this strategy will take more time that the one they estimated.

Also, even though franchising I very profitable, it is most profitable at an enterprise level and not at a corporate level.

Why is this your recommended Strategic Option?

After careful consideration, a mixed approach will be the best option for Kindred Health Care. This approach combines the benefits of franchising and expanding the market to the United States. This means lower inversion from Kindred Home Care and high profit. Also, it involves expanding to the US without dealing with the legality or permissions, people acquiring the franchises will deal with these issues.

Stakeholders and their positions:

Strategic Option 1:

Strategic Option 2:

Strategic Option 3:

Strategic Option 4:

Stakeholder 1:

Will Bernard

Considering as second option.

Rejected after consideration.

Rejected after consideration.

On board.

Stakeholder 2:

Billy English

Considering as second option.

Rejected after consideration.

Rejected after consideration.

On board.

CRITICAL ISSUES

How is it manifested?

Why is it happening?

Cause(s)?

1) Why Important? 2)

Implications if not dealt with?

Finance F1

Investment in developing new internal systems and business model.

This is a new strategy, for it to be successful it needs to have a strong business model and internal system. Which translates into a monetary investment at the beginning.

This is a new model for Kindred Home Care, which is a requirement for new strategies.

By not building a strong internal system the whole strategy might fail.

This will affect how customers perceive the brand.

This will also translate into monetary losses.

F2

Hiring consultant Lori Mackenzie

To save time in planning and implementation, hiring an expert on franchises is required. Lori Mackenzie is the perfect candidate due to her wide experience.

Kindred Home Care has never developed any strategies related to franchising; it is important to have the expertise that Lori Mackenzie has.

If Lori Mackenzie is not part of the team, the strategy will take an extra 10 months to develop.

F3

Investment in the development of the Salesforce software.

A $100,000 investment for the development of software with Salesforce. Kindred Home Care is already using Salesforce to help them see day to day operations. This software will help them have some control over their franchises.

It is part of their business model and is something they are already implementing. It is part of the standardization process.

It is important for the standardization process.

Without it the strategy might fail.

CRITICAL ISSUES

How is it manifested?

Why is it happening?

Cause(s)?

Why Important?

Implications if not dealt with?

Human Resources HR1

Hire Lori Mackenzie as a consultant

In order to get an accurate franchising strategy and cut the time of deployment, Kindred Home Care requires the correct advisors.

Kindred Home Care has no experience with franchises.

They need advisor Lori Mackenzie to cut 10 months the development time.

If they do not deal with this, the strategy might be delayed by 10 months. Kindred Home Care has clear date expectations.

Also, by not bringing an expert into the process of planning and implementations a lot of mistakes can be made.

Human Resources HR2

Employment laws in the United States

Since Kindred Home Care is planning to franchise in Canada and the United States, the legal aspect of employment in the United States arises.

Kindred Home Care is a Canadian based company, they have never dealt with business in the United States.

Even though they do not have to deal directly with getting the employees, is their brand and their name at stake, if they do not put a set of rules and boundaries, this can affect how they are perceived in the market.

Human Resources HR3

Training policies

Kindred Home Care will not be on the daily operations of each franchise, they need to set up training policies to set up standards.

Also, training policies need to change in the United States, depending on the legality and the needs of the market.

Due to the nature of a franchise, Kindred Home Care will not be on daily operations.

The United States is a new market, Kindred Home Care needs to understand legality aspects and the needs of the market to set up their training policies.

It is important for Kindred Home Care to set up standards of what they considered acceptable for training. In the end, is their name and their reputation at stake.

The franchising model might fail if this is not set up correctly. Human resources are one of the most valuable assets in an enterprise.

CRITICAL ISSUES

How is it manifested?

Why is it happening?

Cause(s)?

Why Important?

Implications if not dealt with?

Info Tech IT1

Development of a New Software

For franchising, new software needs to be developed. Kindred Home Care has been working with Salesforce software. The objective is to create a strong internal system, to help them with the standardization process in the franchises, and finally to help them out have some control over their franchises.

It is part of their business model and is something they are already implementing. It is part of the standardization process.

It is important for the standardization process.

Without it the strategy might fail.

CRITICAL ISSUES

How is it manifested?

Why is it happening?

Cause(s)?

Why Important?

Implications if not dealt with?

Operations OP1

Set up the software to help with day to day operations.

Due to the nature of franchising, Kindred Home Care will not be involved on a day to day operations, which means no control over daily operations.

It is the nature of the franchise; operations will switch to the people owning the franchise.

Developing the software will help Kindred Home Care have some control over the operations.

This will help with the standardization process. Kindred Home Care cannot be involved on a day to day operations but can set up the software to have some control over it. This will avoid the failure of the strategy.

OP2

Set up a team that helps to oversee the operations for the new franchises.

Due to the nature of a franchise, Kindred Home Care cannot deal with day to day operations, but they can oversee how they are developing.

It is the nature of the franchise; the enterprise starts losing control on a day to day operations and decision making. But they can supervise them.

If a team is not set up to supervise, some franchises might not follow the rules already set up, this can affect the brand image of Kindred Home Care. This can also result in unsatisfaction of customers.

CRITICAL ISSUES

How is it manifested?

Why is it happening?

Cause(s)?

Why Important?

Implications if not dealt with?

Marketing M1

Mass media marketing (for customers)

By implementing this strategy through all Canada and United States, Kindred Home Care needs to come up with a mass media marketing plan. They need to be on billboards, TV, and magazines so people can start recognizing them.

Even though they are dominating the market in New Brunswick, they are not positioned in the rest of Canada and the United States. They need to start building a name for themselves, and that starts with mass media.

People might not recognize them, which means no customers.

There is a lot of competition in the United States, if they do not create a promotional strategy this will affect Kindred Home Care.

M2

Social media marketing (for customers)

By implementing this strategy through all Canada and United States, Kindred Home Care needs to come up with a social media marketing plan. They need to appear on Google Search, Facebook, Instagram and other apps.

Even though they are dominating the market in New Brunswick, they are not positioned in the rest of Canada and the United States. They need to target the people that are interested in these services. This strategy is complementary to the mass media marketing plan-

People might not recognize them, which means no customers.

There is a lot of competition in the United States, if they do not create a promotional strategy this will affect Kindred Home Care.

By not implementing this targeted strategy, people will forget about their services and the competition might get those potential clients.

M3

Marketing plan to reach out to possible buyers of the franchise

Kindred Home Care needs to come up with a plan on how they will reach out to possible buyers of the franchise.

This franchise strategy is new, they need to find potential buyers.

Without this they won't have potential buyers of the franchise. The business strategy will fail.

M5

Brand guidelines

Kindred Home Care needs to make sure they have the brand guidelines set up, so every single franchise follows it.

New people will have the franchise, people that have never interacted with the brand. With a brand guideline, Kindred Home Care will make sure there are no discrepancies regarding the brand image.

Franchises might not use the brand image properly, which can damage the brand image and how people perceive the brand itself.

1. What Needs to Be Addressed

Implications if not Addressed

Opportunities if Addressed

Whole strategy might fail.

Can affect how customers perceive the brand. This will translate into monetary losses.

The franchise process will get standardize.

Kindred Home Care has the opportunity to create a system that they can oversee, even if they are not in day to day operations.

This is also a prevention measure; it is more inexpensive to have prevention costs than emergency costs.

2. What Needs to Be Addressed

Marketing: Mass media marketing plan + Social Media marketing plan

Implications if not Addressed

Opportunities if Addressed

People might not recognize them, which means no customers.

There is a lot of competition in the United States, if they do not create a promotional strategy this will affect Kindred Home Care.

By not implementing this targeted strategy, people will forget about their services and the competition might get those potential clients.

Create brand awareness in Canada and the United States.

More conversions from potential clients. Increase in sales.

3. What Needs to Be Addressed

Marketing: Marketing plan to reach out to possible buyers of the franchise

Implications if not Addressed

Opportunities if Addressed

Without a marketing strategy that will focus only on potential clients that are looking to purchase the franchise there will be no business. The strategy will fail, and monetary losses will arise.

More franchises in both Canada and the United States.

More money for Kindred Home Care.

4. What Needs to Be Addressed Marketing: Set up brand guidelines

Implications if not Addressed

Opportunities if Addressed

Franchises might not use the brand image properly, which can damage the brand image and how people perceive the brand itself.

Increase in discontent from customers. Monetary losses.

The image of the brand will be used correctly. Standardization.

More sales.

More consistency with all the franchises.

5. What Needs to Be Addressed

Human Resources: Hire Lori Mackenzie as a consultant

Implications if not Addressed

Opportunities if Addressed

The strategy might get delayed by 10 months.

By not bringing an expert into the process of planning and implementations a lot of mistakes can be made.

A smoother transition from the strategy.

Saving money in error making by making inversion in prevention costs.

WNTBA Statement #1

Alternative #1

Buy data base of possible buyers.

Pros

Databases are less expensive than marketing plan and most of them usually include people that might be interested in buying the services.

Cons

Not all the people in the database will be interested.

Still need to spend a lot of money training the sales department.

Recommendation & Rationale

Generating a marketing plan might be more expensive at the beginning, but it is more profitable as a long- term strategy.

WNTBA Statement #2

Alternative #1

Use current software

Pros

They are already familiar with the current software.

No need to spend money.

Cons

Won't is as useful as the new one.

Will has issues with the standardization process.

The organization of information may fail.

Kindred Home Care won’t have access as easy to the information of

other franchises.

Alternative #2

Stick to spread sheets

Pros

No need to spend money.

Cons

Very obsolete.

A lot of mistakes can be made.

Kindred Home Care won’t have access as easy to the information of

other franchises.

Recommendation & Rationale

The inversion of the new software is $100,000 but it will save money in the long term period by avoiding issues regarding storage of information. The recommendation is to get the software.

WNTBA Statement #3

Alternative #1

Not hiring anyone and take the process by themselves.

Pros

No need for inversion.

Cons

The strategy might be delayed by 10 months.

Expect a lot of mistakes during planning and implementation process.

Recommendation & Rationale

Hiring Lori Mackenzie is one of the best inversion Kindred Home Care can do. This will avoid a lot of mistakes in both the planning and implementation process since she is an expert in franchising. Also, hiring her will save Kindred Home Care money.

WNTBA Statement #4

Alternative #1

Not setting up brand guidelines.

Pros

No need for inversion.

Cons

Franchises might not use the brand image properly, which can damage the brand image and how people perceive the brand itself.

Increase in discontent from customers.

Monetary losses.

Recommendation & Rationale

Spend money in setting up brand guidelines. The brand itself is one of the most important assets Kindred Home Care has. One of the most important recommendations is to take care of the brand, you can do that by setting up brand guidelines. Especially since other people will be using it.

WNTBA Statement #5

Alternative #1

Use only organic strategies to reach out to customers. Such as managing social media and writing blogs.

Pros

No need to spend money since everything will be organic.

Cons

People might not see this strategy,

It can translate into monetary losses.

No new customers.

Recommendation & Rationale

Spend money in reaching out to potential customers. This is where the money will come from. A combination of mass media and social media marketing strategy will ensure the brand gets enough customers and brand awareness.

Recommendations & ST = 0 to 3 months, MT = 3 to 9 months

Supporting Detail LT = 9 to 15 months, Immediate – 0 to 15 days

Timing

Priority

(See Note to the Marker)

Rec #1

Marketing: Marketing plan to reach out to possible buyers of the franchise

9 to 15 months

High

Rec #1 - Critical Success Factors & Risks to be Managed

Having a great marketing team that helps in deploying this strategy. The main risk is that it is not well developed it can result in monetary losses and can affect the brand image.

Rec #2

IT: Developing new internal systems, business models, and software with Salesforce.

9 to 15 months

High

Rec #2 - Critical Success Factors & Risks to be Managed

Have the right team that will develop the software and the internal system. Make the software friendly user for all people that will be using it. The risk is that this software might be costly, and people might not understand how to use it.

Recommendations & ST = 0 to 3 months, MT = 3 to 9 months Supporting Detail LT = 9 to 15 months, Immediate – 0 to 10 days

Timing

Priority

Rec #3

Human Resources: Hire Lori Mackenzie as a consultant

3 to 9 months

High

Rec #3 - Critical Success Factors & Risks to be Managed

Getting Lori Mackenzie on board is the main critical success factor. Giving here the correct motivators.

Rec #4

Marketing: Set up brand guidelines

3 to 9 months

High

Rec #4 - Critical Success Factors & Risks to be Managed

Having a great marketing team that helps in deploying this strategy. If not executed well can damage the brand image.

Recommendations & ST = 0 to 3 months, MT = 3 to 9 months Supporting Detail LT = 9 to 15 months, Immediate – 0 to 10 days

Timing

Priority

Rec #5

Marketing: Mass media marketing plan + Social Media marketing plan

3 to 9 months

High

Rec #5 - Critical Success Factors & Risks to be Managed

Having a great marketing team that helps in deploying this strategy. The main risk is that it is not well developed it can result in monetary losses and can affect the brand image.

Table 1.6 The Five Forces of Competition in the Industry

Rivalry among Competing Sellers

 In the United States the competition is pretty fragmented. Which means there are several competitors. Also, the health care industry is one of the most competitive and successful in this country.



 In Canada is a highly competitive market, the difference is most home care services in Canada focus on urban areas and Kindred Home Care focuses in rural areas.

Potential Entry of New Competitors

 Due to the high number of people getting old in Canada and in the United States there are new competitors.

Competitive Pressures from Substitute Products

 Some substitute services include hospital care, including nursing and physiotherapy services.

Competitive Pressures from Supplier Bargaining Power and Supplier-Seller Collaboration

 There is pressure to get enough workers that can address Kindred Home Care needs.

Competitive Pressures from Seller- Buyer Collaboration and Bargaining

 The market is pressuring to have more facilities such as Kindred Home Care, due to the number of elderly people. Each year the percentage goes up.

Table 1.9 The Business Environment

Opportunities

Threats

Political

Health Care industry is more profitable in the United States.

Outside New Brunswick there are more opportunities to earn more money.

They already know the policies in Canada.

There are new policies Kindred Home Care will need to learn and address, especially from the United States.

The government might support local businesses.

They won’t get the same support from the government that they’re getting in New Brunswick.

Economic

Home Care and Health industry are very profitable in both Canada and the United States.

Recession on the economy, people may not perceive home care services as a primary service.

Societal/Cultural

Nowadays everyone lives in a very busy world with extremely busy schedules, people are looking for someone that can take care of the

People might stop perceiving Kindred Home Care as a personalized home care provider and is one of the most important elements for health care services.

elders.

In the United States each day 10,000 people are turning 60 or more years old. Society needs these services.

Canada and The United States have a very similar culture and needs.

Canadian and American cultures are used to Home Care services for the elderly.

People in the United States of America might prefer services from American businesses instead of Canadian.

Technological

New technologies can help keep track of every single customer.

New technologies can help keep track of every single franchise.

Everyone can access critical information since it is stored in the cloud.

New patents and software that might not be available for Kindred Home Care.

Not enough money to invest in new technologies.

All records are in a database, if the software fails they won't have access to clients' records.