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SWOT analysis of Shouldice Hospital Limited Essay


Shouldice Hospital limited was started in 1940 by Dr. Earle Shouldice for treating Hernia. The method of surgery adopted by Shouldice Hospital was unique in a sense that it introduced the concept of flow shop in carrying out surgeries alongwith simplicity in surgery. Because of this uniqueness and simplicity, the demand for surgeries at Shouldice increased and Shouldice has reached a point where it has to increase its capacity to reduce the wait times being faced by the patients. Presently, the hospital performs, on an average, 30 to 36 operations per day. The challenge is to devise a way of increasing the hospital capacity while maintaining the same quality standards, the role of government in the operations of the hospital and unauthorised use of Shouldice brand name by potential competitors.


We have assumed that at all times ratio of patients coming from outside and local patients remain at 70:30 and surgeries has to be carried out maintaining the ratio.Analysis:Shouldice is already evaluating some options to increase the capacity of the hospital. Some of these are: 1. Increasing capacity of the hospital by increasing the number of beds and inculcating more staff.2. Operating on Saturdays and Sundays in order to increase the capacity by 20%.3. Expanding the capacity thereby entering in other specialist areas offering similar opportunities like eye surgery etc.4. Changing the scheduling of doctors.The way, the surgeries are carried out at Souldice, any patient needs to stay at hospital for at least 3 days. Appendix ‘B’ shows weekly maximum achievable throughput of 149 patients under the current operating cycle. Surgeon Capacity Analysis: In general, a typical first time surgery requires 45 minutes of surgeon time. Surgeon requi …

1. Executive Summary Shouldice hospital is a specialized hospital in the repair of external abdominal hernias in Canada. The hospital was established by Dr. Shouldice the founder of a new and superior surgical technique, now known as the Shouldice method, for repairing hernias which yields better medical results as well as a significantly shorter recovery time. The Shouldice Hospital is a successful organization and admired by most of the people who had relation with it or who have heard of it. Moreover, some of the hospitals and surgeons take benefit of the Shouldice method in their advertisement although they hardly perform it perfectly. This leads the hospital to become notorious. Shouldice is operating at its “best operating level” for a service company with limited flexibility in its plant, a specialized work force but are failing to meet all the demand for its chosen market niche. Adding additional capacity to meet the unmet market need may upset the existing work force and lower service quality. Failing to meet the market demand may invite competition that could eventually cause Shouldice to lose market share and end up with excess capacity.

2. Hospital Background: Dr. Edward Earle Shouldice graduated from the University of Toronto in 1916. By 1940, Dr. Shouldice was operating a private medical and surgical practice, lecturing at the University of Toronto, and pursuing research work in areas of advancing medical knowledge. During World War II, he was called to serve on the Medical Examining Board. Dr. Shouldice, a major in the army, found that many young men willing to serve their country had to be denied enlistment. These men needed surgical treatment to repair their hernias before they could be …

How does Shouldice offer a superior value proposition relative to its customers, remain successful, and balance low cost with high quality? Data Summary Benefits purchased by the consumer: Shouldice Value Proposition •Early ambulation following surgery oUse of local anesthetic oNature of procedure •Design of facility o130 acres o17,000 square feet o89 beds •Dr. Casim Degani, internationally recognized authority •Specialized procedure •Patients administered anesthetic in operating room •Upon completion of operation: patients are fully aware of what is going on •Counseling activities •Atmosphere •Experienced staff Shouldice way compared to other hospitals

•Recovery oPractically cut in half •Atmosphere oCarpeted floors oNo Bed Pans •Lower Costs •Administration of the anesthetic •Being aware of what is going on after surgery Target Group of Customers: Commonalities •Only external abdominal hernias •Recurring hernias repaired elsewhere •Roommates have similar jobs, backgrounds, or interests Service Delivery: Production Process •Thoughtfulness •Service Blueprint attached Five Dimensions of Service Quality •Reliability oSchedule oPricing oDelivery oProblem resolution •Responsiveness oAccessibility oWillingness to listen oImmediate attention •Assurance oTrust & Confidence oExperience oSkill oReputation •Empathy oSpecialization oLike family oSpecialized attention

•Tangibles oBrochure oAtmosphere Employment at Shouldice: Compared to Other Hospitals •Nurses oRatio 1:15 oOther Hospital 1:4 oCounseling Activities occupy a good portion of their time oWaiting list for employment •Doctors o”Watch kids grow up” oOn call o15% higher income ofew elect to leave •Administration & Staff oNon union oLow turnover oNo Fire Policy oCross Train Growth Alternatives •Saturday surgeries •Expand # of beds •Toronto expansion •United States…

TEN P’S OF MARKETING MARKETING MIX: 1. The marketing mix approach to marketing is a model of crafting and implementing marketing strategies. 2. It stresses the “mixing” or blending of various factors in such a way that both organizational and consumer objectives are attained. 3. When blending marketer(s) must consider their target market. 4. Marketing Mix is a term used to describe the combination of tactics used by a business to achieve its objectives by marketing its products or services effectively to a particular target customer group. ITS IMPORTANCE: Businesses need to make sure they are marketing: – The right product to – The right person at – The right price in – The right place and at – The right time

For example: If you manufacture pens, and have decided to target school children, it would be more appropriate to market: – Coloured ballpoint pens (product) – At a low price (price) – Selling them through newsagents and stationers (place) – And promoting them through point of sale material (promotion) Than it would be to market: – Gold fountain pens (product) – At a high price, including insurance against loss (price) – Selling them through specialist outlets and jewellery stores (place) – And promoting them in glossy magazines and Sunday Supplements (promotion)

P’s OF MARKETING: PRODUCT: Marketers need to be sure that your products and services continue to meet your Customers needs. 1. Carry out simple research by asking your customers: – What they think of each product/service – How satisfied are they with the quality – How satisfied are they with any support services you may provide – How effective it is in meeting their needs – How they see their needs changing in the short and long term future 2. Carry out step 1 for each product or service you offer 3. Have a system for collecting and analyzing feedback from your customers so that ideas are fed into a new product development process that is ongoing. 4. Ask yourself what stage of the product life cycle your products or services have reached. The product life cycle is one way of looking at how the marketing mix links together. Products are said to go through stages – an introductory stage, a growth stage, a mature stage and a decline stage.

At each stage a slightly different mix is appropriate. 5. Analyze the profitability of each product/service you offer. For more information on calculating this, there is a 80/20 Rule i.e. 20% of products contributing to 80% of the revenue PLACE: Place is the means of distribution you select depending on the type of product or service you are marketing. Your choice will impact on your pricing and your promotion decisions. 1. Are the customers for your products and services consumers or businesses? If they are consumers marketer will have three main options: – Selling to wholesalers who will sell to retail outlets who will sell on to the consumer – Selling direct to retail outlets – Selling direct to the customer – If your customers are businesses you will probably sell to them direct through your own sales force.

2. If you sell through wholesalers and retailers, remember when you price your products that they will each want their own mark-up to cover their overheads. You will also need to promote your products and services to all members of the channel. Wholesalers and retailers will have to be persuaded to stock your product and end customers to buy them. 3. If you are selling to businesses you will have to cover the cost of a sales-force. This can be an expensive overhead and will again impact on your pricing. PRICE: 1. Price is quite commonly the sole determinant for choice of product. The price of products or services will be derived from fixed overheads, indirect overheads, direct cost, profit margin, risks and uncertainties. 2. Price is the amount of money charged for a product or service or the value exchanged for the benefits of the product or service. 3. For a new product, marketer must understand your positioning before you set a price.

4. Firstly what is the firms cost of production. This will show you what marketer needs to charge and not what you could or should charge. Make sure it is not too low, or the product will not be taken seriously. If it is too high, the potential customer will not take the risk. Understand the competitor’s charges for the similar product. Pricing Strategies There are five general pricing strategies: Product Line: Setting price steps between product line items Eg: car wash,normal 2$,with wax 5$ Optional Product: Pricing optional or accessory products Eg: car accessories

Captive Product: Pricing products that must be used with the main product Eg: car batteries By-Product: Pricing low value by product to get rid of them Eg: molasses out of sugar sold to alcohol industry Product Bundle: Pricing bundles of products sold together Eg: combo pack of 5 kurkure individual packs in one big pack New Product Pricing There are four new product pricing strategies: Economical marketing: 1. This is for consumers who have low purchasing power. 2. Here the product has both low quality and price. Market-Skimming: Initially set high prices to “skim” revenue layer by layer from the market.

Works when:

1. Quality and image support the higher price 2. Enough buyers want the product at that price 3. Cost of producing a small volume cannot be high 4. Competitors should not be able to enter the market easily Premium market: 1. This market is normally for consumers who have high purchasing power 2. Here the products are are of very high quality with a high price tag. Market Penetration: Set a low initial price in order to penetrate the market quickly and deeply to win a large market share. Works when: 1. Market is highly price sensitive 2. Production and distribution costs fall as sales volume increases 3. Low price must help keep out the competition 4. Price Adjustment The following are price adjustments based on changing situations: 1. Discount & Allowance: reduced prices to reward customer responses such as paying early or promoting the product 2. Discriminatory: adjusting prices to allow for differences in customers, products, and locations 3. Psychological: adjusting prices for psychological effects. Ex: $299 vs. $300 4. Value: adjusting prices to offer the right combination of quality and service at a fair price

5. Promotional: temporarily reducing prices to increase short-run sales 6. Geographical: adjusting prices to account for geographic location of customer. 7. International: adjusting prices in international markets PROMOTION: 1. Promotion is any means of informing, persuading or reminding clients about the marketing mix of product, place and price. Promotion tends to create awareness among potential clients and improve their attitudes towards the product or firm. 2. Promotion is the specific mix of advertising, personal selling, sales promotion, and public relations a company uses to pursue its advertising and marketing objectives. Objectives The objectives that are met by promoting are to move the target market through the following phases: Unawareness -> Awareness -> Beliefs/Knowledge -> Attitude -> Purchase Intention -> Purchase It is believed that consumers cannot skip over a phase, but they need to move through them.

Promotion is used to move the target market from one phase to another to finally purchase. The Offer The offer needs to be identified before you begin any promoting. What are you offering the target customer? What do you want the target market to do? One mistake that can be made is to create a promotional advertisement and not tell the customer what to do. You should prompt the customer and tell them to “call this number to place an order” or “download this software from our web site”. Measuring Response 1. Testing different offers, advertisements, direct mail letters, lists, and promotion techniques can tell you what method is most effective. 2. Testing is expensive. 3. Tracking results takes time, but the information a marketer gathers could help him reduce wasteful, ineffective spending in the future. World Wide Web 1. Cheapest way of promoting the product. 2. It is a great tool because it allows the target customers to educate themselves about your product by reading about it, seeing a demo, and download a copy (and therefore serve as your distribution channel).

3. Web is very crowded and so the product is difficult to be noticed. Marketer has to register with the entire search engines, such as Yahoo and Alta Vista. Direct Mail 1. An average response rate for direct mail is about 1%. 2. This depends on the offer, the mailing list, the target audience, the creative (how the direct mail piece looks), and the timing of the mailing. Classified Advertisements 1. Although it may nice to be able to take out a full color, full page advertisement in an industry magazine, it is very expensive and will not reach your target market of the innovators and early adopters. 2. The key for classified advertisements is frequency. 3. Running an ad once will create awareness, but not necessarily action. Press Releases 1. A press release is an announcement of a new product release. This is a great way to get free publicity. 2. There can be a 3-4 month lead time before your press release is published. 3. Marketer has to include in his press release the product name, the price, a company contact name, the company name, address, phone number, fax number, and e-mail address

Product Reviews 1. Magazines have product review editors that review it in an article or column. 2. This can provide great exposure. 3. However, it can also be risky 4. Marketer chooses a magazine his target market is reading. Example – Promotion Your Music Shows, Direct Mail, Web Page, Posters, Event Listings, Reviews, Radio, Word of Mouth, Press Releases. PACKAGING: 1. The main thing to remember about your packaging is that it communicates to the person buying it right up until they make the decision to plunk down their money and take it home. 2. Product can’t just look nice, it has to scream its message out in order to get noticed. 3. Packaging should be noticeable within three seconds in a store-shelf situation. 4. People just might buy products again because they like their convenience. 5. According to Kotler (2000), packaging comprises the activities of designing and producing the container for product. The container is called the package, and might include up to three levels of material. 6. Well-designed packages can create convenience as well as provide added value.

For example: Old Spice aftershave lotion is in a bottle (primary package) that is in a cardboard box (secondary package) that is in a corrugated box (shipping package) containing six-dozen boxes of Old Spice. Factors which have led to packaging growing application as a marketing tool: 1. Self-service: An increasing number of products are sold on a self-service basis. The package must perform many of the sales tasks: attract attention, describe the product’s features, create consumer confidence, and make a favorable overall impression; 2. Consumer affluence: Increasing consumer affluence means consumers are willing to pay a little more for the convenience, appearance, dependability, and prestige of better packages; 3. Company and brand image: Packages lead to immediate recognition of the company or brand. 4. Innovation opportunity: Innovative packaging can bring great benefits to consumers and profits to producers.

10 Packaging Tips That Will Make Consumers Buy the Product: 1. Understand the customer. 2. Find out what package attributes appeal to the customer you are targeting. 3. Understand how the package will be used. 4. Know your customers current buying trends. 5. Keep abreast of new packaging technologies. 6. Watch where people shop. 7. Keep pace with “hot button” packaging issues. This includes legislation too. People do really care about the environment and the amount of excess packaging. 8. Security in packaging is becoming increasingly important. 9. Competition of various packaging materials is increasing so keep current on your chain of supply globalization. 10. Include the design and selection of your packaging materials to curtail external influence of power players

PUBLIC RELATIONS: According to Kotler (1984; 1986), when organisations attempt to enter markets abroad, they need to master the art of satisfying parties other than the target clients alone. These other parties include governments, trade unions and other interested groups who act as gatekeepers to their own market. Upon recognising the political nature of this new marketing environment, Kotler introduced two further Ps, public relations and political power, which in marketing terms are known as “megamarketing”. Kotler (1984) also advocated the importance of power to win the influential support of industrial officials, legislators and governments so as to enter and operate in the targeted market. To attain this objective, Kotler (1984) added that marketers should possess good negotiating skills with the relevant authorities. PEOPLE: The people employed in your organisation will determine the quality of service your customers receive. This is truer for services, but also impacts on businesses making tangible products. Happy, skilled and motivated staff make happy customers.

They are more likely to think about the customer and deliver good customer service if they are well trained and are recruited for their positive attitude to customers. You can achieve competitive advantage over your competitors through offering a high level of pre-sales and after-sales support and advice. Again, this can impact on the price you set, as customers are likely to be prepared to pay more for the service they receive but there may be a higher cost for you to take into account. Identify those staff who come into contact with customers, either face-to face or by phone. 1. Carry out a task analysis of what they do in terms of customer contact. 2. Involve your staff in setting standards for customer service. For more information on customer service, look at the 10-minute Customer Service Programme.

3. Prioritise training needs for these staff and provide appropriate training PROCESS: • Marketing primarily concerned with customer interface • Element of extended marketing mix or 7Ps • Best viewed as something that the customer participates in at different points in time. • Eg: going on a cruise, the customer is greeted with a smiling porter who takes his/her luggage, the ship has various forms of entertainment and luxury facilities, after the cruise, the luggage is brought back to the customer.

PERSONALISATION: • A goal of marketing is to build relationship • Company should identify individual customers and gather information about them. • Any form of customisation that occurs because of specific recognition of a given customer. • Can be integrated with any other function, as a result, others are overlapping and moderating in its effects.

PERFORMANCE WITH PACE: This is the bottom line! Unless it is delivered, marketers are wasting their time. This P addresses performance for the customer in terms of experience (personal/ online) and satisfaction; and performance for business in terms of service delivered and revenue and profit results. • Performance measurement systems (such as the Balanced Business Scorecard or the European Foundation for Quality Management model) are increasingly used to drive a business forward. • A good performance system can help you pinpoint problems and improve your business results • Improvement measures should be linked to goals, from organizational to individual • It is more important to collect the right information rather than that which is easiest to collect, i.e. it is better to be roughly right than precisely wrong! • Above all, the general approach is the same – clarifying objectives, developing indicators, initiating the system, data collection and analysis, initiating change

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