Service plan Essay
500 service and treatment sites have been identified. A treatment site may be a specialty clinic such as that of an ophthalmologist, or it may be a part of a multi-specialty polyclinic as prevails in a hospital setting. Operation theaters, kitchens, ward, stores, and waiting areas generate vastly different wastes. Hence, a single institution, while an integral customer, has to be conceived of as a number of discrete sites which have to be cleared of pests and wastes, and prepared for fresh use in clean conditions.
Some sites have to be treated more than once a day, while other areas such as stores may be serviced only monthly. Waste collection and pest control are technically different in any case, though customers think of them as one when awarding hygiene contracts. The plan is to start with 150 service and treatment sites in the first year, and add a further 350 sites in the second year. No further increase has been built in to the financial planning. Experience shows that hospitals and doctors tend to switch contracts periodically, at least in part to experience service levels from new providers.
Some turnover of clients is inevitable, and while there will be concerted attempts to grow the business, the focus will be on getting additional work from existing clients rather than to divert resources to service new ones. This is also in line with the fact that the area is well served by health care facilities with little scope for major expansion in this regard. The competitive advantage of the new enterprise will relate to safety. A traditional problem area with hygiene services in health care has been the exposure of patients, visitors, and medical personnel as well, to chronic toxicity from chemical exposures.
Excel Hygiene specializes in using beneficial microbes which are entirely safe from the human physiology standpoint. Market Overview The market in the target area is estimated to be about $5 million and has stagnated at this level for the past 3 years. However, a sea change is expected in the foreseeable future. This is primarily because of new legislation and community pressures have been brought to bear on health care institutions to improve their waste management practices.
Many clinics and nursing homes have been accustomed to combining their medical wastes with general garbage collection containers, a practice which is dangerous from the infection control perspective. All of these institutions have been served notices to establish new and segregated treatment facilities within the next 12 months. It is forecast that the market segment for hygiene services in the target area will triple over the next three years. The new enterprise plans a 20% premium in the costs of collection, treatment, and waste disposal for health care customers over the charges they have paid to established operators.
This premium revolves around the carcinogenic sterilizing agents used by the industry until now. Excel Hygiene is strongly positioned on treatment safety, and uses beneficial bacteria for organic waste degradation. Similarly, the company has negotiated exclusive rights with an Italian firm with proprietary technology for infection control with modern chemicals, which have much better safety profiles. Excel Hygiene plans to provide superior services to back its intended price premium.
Surveys show that cheaper competitors used poorly trained operators and routinely miss clean-up deadlines, which disrupt routine use of busy hospital facilities. The new company has been very conservative in defining its operating area in order to meet its planned superiority in service levels. Competitive Summary The cheapest option in the market for hygiene services is to ask the Municipal authorities to handle waste and cleaning in hospitals. This player holds the monopoly for all health care bodies owned by the municipality. It also has the most and best sited land resources for incineration.
Excel Hygiene has negotiated a lease to use a part of this land holding for its own operations. The major weakness with the municipal service is that it is union-ridden, unreliable, and of low quality. It is therefore shunned by private hospitals and brand conscious clinics which cater to discerning clienteles. The largest and most profitable player is Johnson and Johnson, which is a global leader in a number of health care service lines of business. Their forte is in operation theater and instrument sterilization services. It offers other hygiene services through franchisees.
This player, apart from strong corporate goodwill and brand leadership, serves healthcare institutions with some essential products such as the sutures used in surgeries. It has the broadest product range. The principal Achilles heel of this giant is its dependence on highly toxic chemicals for sterilization. Many surgeons and nurses complain about this aspect of their services. Excel Hygiene has a strong entry in this area with its safer products. Ray Services is a niche player which has plans to consolidate its hold in the hygiene market. It is a family owned enterprise which has been in business for over 5 decades.
Its forte is rodent control, and it has a fair track record in controlling other pests, especially crawlers as well. While it has many health care entities as customers for decades, it is entirely new to bio-medical waste. It has acquired a generic chemical range for this purpose, but its application teams are not fully equipped to handle such toxic products. Excel Hygiene does not consider it to be a serious competitor for its plans. Goodnight Enterprises cannot be dismissed so lightly though. It is also a relatively new entrant in the health care service space, with its traditional strong hold in vector control.
This is a Fast Moving Consumer business, and while hospitals, clinics, and doctors use the Goodnight brand to keep flies away, the company is not well known as a total hygiene services entity. However, it can make up for this lacuna by leveraging its resources, international affiliations, and mass media expertise. The market has a fair sprinkling of small operators which serve nursing homes and clinics in their respective neighborhoods. These operators focus on termite control and have only incidental interest in other hygiene and waste disposal services.
They would not directly compete with Excel Hygiene, but the new enterprise is keen on collaborating with them for mutual benefit. Overall, competition in the defined business area is relatively limited, with plenty of space for differentiated new players. Excel Hygiene’s specialization with respect to safety, and a microbiological approach to waste management, has a particularly good conceptual fit with the emerging trend towards safety concerns. Reliability is another key gap in the present market structure. Hospital services must continue on holidays and on week ends.
Service loads peak quickly during disasters and catastrophes. Most hygiene and waste management service providers are not accustomed to the essential nature of health care services. The logistics of reaching hospitals more than once a day, keeping tabs on all their areas for cleaning and waste segregation, and moving materials to disposal sites efficiently, are complex and require expertise and highly trained teams. Excel Hygiene, apart from the safety of its product range, plans to focus on excellence in logistics. It plans to emerge as the foremost brand on reliability and quality counts.
University/College: University of Chicago
Type of paper: Thesis/Dissertation Chapter
Date: 17 May 2017
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