Based on the information provided at the DHC Case, like the local work population trend and workers survey, the DHC project cannot become self supporting at the term of three years; the losses forecasted after the third year are $ 105,828. Refer to analysis on pages 3 and 4. To revert these forecasted results an Offensive Strategy Market Plan must be outlined, and the principal proposed actions to develop are: • Creating awareness and improving image in the community to increase and retain the number of customers; thru invest in weekly ads, and agreements with local employers. • Expanding visiting hours from 7:00 AM to 6:00 PM to hold and increase the number of Employment / insurance physical examinations. • Adding gynecological services.
The result of complete DHC analysis after develop the Offensive Strategy Market Plan gives a positive income result of $ 13,310 after the third year of operations. Refer to analysis details on pages 5, 6 and 7.
• Location: DHC is located close to its customers.
• DHC is financially well supported by its owner PCH which is one of the biggest hospitals of the country.
• Offers limited services and working hours.
• Does not have enough operation capacity at lunch time.
• It is not well known in the community due to lack of promotion. • The customers may not be as satisfied, as they should be.
• Offers additional services and expand working hours to increase customer base. • Increase referrals from PCH and by word-to-mouth.
• Market it services to generate awareness in the business community and the public in general.
• Possible competitor.
a) Business: For worker compensation exam/treatment, Employment/Insurance physical exam. b) General public: For personal illness/exam and emergency.
c) Women of 13 ages and up: they are potential customers to take the option of gynecology’s services.
1. To expand the hospital’s referral base.
2. To increase referrals of private insurance patients.
3. To establish a liaison with the business community by addressing employers’ specific health needs. 4. To become self-supporting three years after opening.
Perpetual Care Worksheet
1.- Trading Area (ex. 1 and ex. 6) – PI/E patients
a. Review Ex. 1. Deduce (visually) the degree of customer source overlap between DHC (# 1) and projected competitor (# 2) 31 blocks
b. Analytical perspective (all linear figures below are measured in “blocks”)
25 X (25)
2.- Pricing issues
Type of visit
Average price per visit $ 67.90
i) 8% across the board price
ii) PI/E’s increase 20%, other types unchanged
Type of visit
Average price per visit $ 96.12
What conclusions do you draw about product line pricing, proportion of visit “types” and average price? Prices seem to be fairly reasonable. The proportion of visits for employment/insurance physical examination is low considering that the clinic is located in a high density area. The average price is a little bit higher than the possible competition but it is still reasonable.
3.- Use the historical average price computed in 2(a). Review Ex.2 a.
Estimated annual expenditure = $510,048
Maximum annual number of patient visits (4/hr) = $ 8,320 (i.e. capacity) c.
Average price = $67.90
No. of patients to recoup estimated annual expenditure = 7,514 e.
Required “load factor” to breakeven = 90.3%
How feasible this percentage?
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