Case 3: Global Source Healthcare: Allocating sales resources 1) Has Global Source's sales strategy been effective? Would you recommend any changes to the sales strategy? If you consider the sales strategy rationally, you can hardly conclude that the sales strategy was effective enough considering the problems Global Source are currently experiencing. As the healthcare industry is rapidly changing, most of the trends not favoring Global Source, they are not well prepared in their strategy of sales. Global Source is a comprehensive healthcare staffing company that provides domestic as well as international staffing services. They positioned themselves in the market as the one-stop-shop for every hospital’s outsourcing needs. The main idea of Global Source was to target international markets and developing a steady stream of international healthcare personnel to supply domestic hospitals. However, due to a cash flow shortage, Global Source was forced to enter the domestic market as well.
A major problem Global Source is dealing with is the high dependency of three major accounts that includes roughly eighty percent of the revenues. Furthermore, they do not have any clear focus which potential customers to target. They deal with small and large hospitals, while they need a complete different attraction strategy, for example the possibility to become in contact with the responsible decision maker, the amount of personnel needed etc. Therefore, I believe that Global Source first needs to make clear what their focus should be and to determine which customers to target during their sales process (characteristics of the customers and which type of staffing). Therefore, it is valuable to evaluate domestic travel staffing and international recruitment both by comparing both pros and cons. Although CEO Siddiqi argues that the only solution to solve the shortage of cash flow is entering both markets simultaneously, I consider a clear focus as more important for a healthy future perspective.
Domestic travel staffing is a way to earn some quick money, although the competition is fierce while the margins are under pressure. However, there is still a net average profit of 4000 dollars for every 13-week assignment. In comparison with international recruitment where the competition is less intensive while the entry barriers are higher, the earnings are lower with an average of 9624 dollars for approximately 2.5-year contract (calculated by using the average fee 17.500 dollar multiplied by the average margin 55%, assuming the employment contract is the average of 2-3 year). Ceteris Paribus, this means that the domestic travel revenues are significantly higher, (4000 dollar multiplied by 10 as thirteen weeks is a quarter of a year) resulting in almost the fourth fold of the revenues of international recruitment. However, the travel staffing market becomes saturated; Global Source is not distinctive on any facet in this market while they only obtained some contract by giving discounts (which means that the fourth thousand dollar calculations might be overestimated). Considering international recruitment, Global Source has a competitive advantage over other competitors due to their strategic alliances with local companies around the globe. Although there are some ethical issues in some countries were they are active recruiting, they have a valuable opportunity in India, a country with an abundant supply of qualified nurses, due to a strategic alliance with a local company. An alliance that competitors did not have yet. Based on these arguments, I would suggest that Global Source should purely focus on extending their international recruitment activities, their former focus. By improving the sales processes, it should be sufficient to create a comfortable market position. If this is not the case, the company will not be able to survive in this competing industry. Focusing on domestic travel activities is only a short-term solution where...
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