Shouldice Hospital Limited

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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 pronounced physically fit for military training.
In 1940, hospital space and doctors were scarce, especially for this non-emergency surgery that normally took three weeks of hospitalization. Dr. Shouldice resolved to do what he could to alleviate the

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