A corporate strategy for Tanay Community Hospital

• Main Author: Bernardo, Ma. Aurora C.
• Format: text
• Language: English
• Published: Animo Repository 1997
• Subjects: Business Administration, Management, and Operations
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/2090
• Institution: De La Salle University

Tanay Community Hospital has withered the storms of bankruptcy in 1974 and the tumultuous years of the 1980s when the country was suffering from an economic debacle. The corporate strategy employed was to decrease it services and limit it to those it can efficiently deliver. Thus from a secondary hospital during its establishment it was shrunk to a primary hospital. The strategy was to position itself as a primary hospital and evade direct competition from Tanay General Hospital, a then flourishing secondary hospital. The strategy apparently worked and TCH now enjoys a substantial market share of 35.78% in the Pililia, Baras, Tanay, Institutional Health Care Market and a 39% share in the market of Tanay. TCH shares by a poor financial picture of the hospital, not to mention the fast deteriorating physical facilities. The times however have changed and a new environment is emerging. An analysis of the eternal environment shows that an improving economy and an improvement in the peoples standard of living can lead to a shift in buyers behavior relative to the austere years. With the onset of providing medical insurance to as many Filipinos as possible would lead to better taste for health care services. Therefore, from its low pricing strategy, TCH must now look at its present strategies in the light of these changes. The objectives proposed were set to calibrate the hospital to the changing environment, these are : (1) to increase operating expense margin to revenues by 5% to 10% per annum in the next five years (2) to increase gross revenue by 25% per annum for the next five years (3) to maintain a growth in Earnings per share ratio of not less than 20% per annum for the next five years (4) to maintain a current ratio of 2:1 per annum (6) to capture 60% of the market share of Tanay in the next years and (7) to establish an organizational system that would accommodate the growing demands of the business while maintaining a lean staff. The strategies were based on the strength and weakness of the internal environment, opportunities and threats of the external environment. The Vision-Internal-External Framework of Lazier and Porras is used in formulating the strategies. This framework is specifically tailored for small-medium enterprises. The strategies proposed are : For its Cash Flow Strategies : 1) accelerate the collection of accounts receivable through early payment terms, discount incentives, and a generally more aggressive collection department (2) Arrange new debt and equity financing as an external source of capital for the company (3) Generate internal cost savings by improving operational efficiently (4) Smooth or at least prepare for cash flow fluctuations caused by seasonality. This could be done by developing new products or markets (5) subcontract the companys unused facilities For its Marketing Strategies: (6) Expand products and services through market and product development (7) Maintain low-pricing strategy with its consultation fees but look into filling up the discrepancy (of the price should be based on its cost) in pricing its other products or it could opt for an on-par pricing (8) it should strive to generate more product awareness among its potential clients (9) It should strive to find ways in reaching their clients through more innovative means like accommodating phone-in consultation and house/company calls and For its Organizational Design Strategies (10) Establish a formal and more objective performance evaluation system. (11) Maintain present system of incentives and benefits (12) Communicate the goal and vision of the hospital to the staff (13) Involve staff and top management (15) Encourage more participation in decision-making and decentralize functions of the Hospital Administrator and Chief-0f-Hospital to other staff (16) Give formal recognition to outstanding staff and to their teams (17) Encourage teamwork by rewarding team efforts aside from individual achievements (18) Set up a feedb The proposed competitive strategies are : (1) Customer awareness on products and services and latest developments, (2) Products that are specifically suited to the peculiar needs of the different types of clients, and (3) Accurate, presentable and speedy patients medical history and profile. These are feasible if TCH could source additional source of capital either through sale of stocks or loans. In which case the recommendation is to opt for loans in order to maintain present leadership set-up until the company would be in a better position to take on the change of leadership.