1) Increase by 4 working hours per day: from 5 pm to 9 pm

2) Provide service packages at the client company

3) Offer more high quality services: MRI, PET-CT

4) Adjust service price: Offer discount package, increase price for special service

5) Open more branches in other cities

6) Expand pharmaceutical store

7) Increase marketing budget by 150.000 USD per year

 

4. Time Frame

 

The alternative selected will be implemented in 1 year (2015) to get the target therefore some of alternatives will be rejected.

 

5. Preliminary Analysis of the Alternatives

 

Looking through and have general analysis of some alternatives we rejected Alternative No 5, 6, 3 and 4 and we decide to go deeply to analyze Alternative No 1, 2 and 7

• Alternative No 5: This alternative is not possible if we have only 1 year to implement the plan

• Alternative No 6: Currently the pharmaceutical store can meet the demand of patients at the clinics. So even if we expand the store in scale the demand may not increase much. Therefore in term of profit result it is not effective or can not meet 15% profit increase

• Alternative No 3: The investment is big. MRI machine is 1.18 mil USD, PET-CT: 500,000 USD and depreciation is in 3 years so in the first year the revenue may meet 15% increase  but we will still lose in the first year

• Alternative No 4: Adjusting the service price: This alternative is so risky because the main customers are people with average income and the small change in price can affect the revenue.  And if we reduce price it will be difficult to increase 15% of revenue

 

5.1 Alternative No 1: Increase by 4 working hours per day: from 5 pm to 9 pm

 

- Market and Competition:There are number of clients want to check up after working hours such as office people. While public hospitals only provide examination service within working hours (from Monday to Friday at 8 am to 4 pm). Some specializations and tests can be done in the afternoon or evening such as pediatric, obstetric, detal, respiratory, aesthetic, dermatology…

Now some of private hospitals and clinics already offered this service such as Hong Ngoc, Medlatec, Vietnamese and French hospital, Vinmec and some small specialized clinics, they also have certain number of customers. While many patients of Medelab have inquiry to be examined after working hours.

- Financial Plan: We make calculations and have result that

• Increase 18% revenue

• ROS = 21.6%

• ROI = 33.3%

 

- Pros and Cons:

• Pros: Attract more customers, brand image value, a way to advertise the clinics, take use of clinic’s assets especially the medical equipment which have short time depreciation and amortization, save fixed costs (office rental, G&A cost)

• Cons: If the service is not good, we cannot compete with other hospitals and clinics.

 

5.2 Alternative No 2: Provide service packages at the client company

 

- Market and Competition:In many industrial zone and universities, It will take time for the workers to go to the clinic for health check-ups, the clinic can send doctors and nurses to serve at the factories that can save costs for the clients.

This package is for lower price market, factories, universities… do not have big budget for workers’ yearly general check-up which only some examination specializations can be made at the client’s place.

- Financial Plan: As per our estimation and calculation, we can reach revenue of 651,000 USD and profit is 114,000 USD in the first year.

• Increase 15% revenue

• ROS = 17.5%.

• ROI = 25.3%

• In which we have to mobilize a flexible team including 5 doctors, 5 nurses, 1 pharmacist, 1 receptionist and hiring machine and equipment.

- Pros and Cons:

• Pros: Brand image, diversifying services provided, increase revenue and profit

• Cons: Can not offer special disease examination, only offer for big number of clients, difficult to hire good and experienced doctors, good machine and equipment. Long time to get account receivables. If the organization is not good, it will have bad effect to brand image.

 

5.3 Alternative No 7: Increase marketing budget by 150.000 USD per year

 

- Market and Competition: Customers are confusing about quality of health checkup by advertising information, some crisis have happened recently make people distrust advertising information.

Advertisement activities do not bring expected effectiveness. Current yearly budget is 300,000 USD and 30%of customers examined at the clinics are from this channel.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

- Financial Plan: Adjust expense structure, adding more budget for internet especially facebook  and telephone consultation

- Pros and Cons:

• Pros: Adjust the expense structure to increase the effect of marketing activities. Strengthen the brand image of Medelab.

• Cons: It takes long time to measure the results, the number of customer may not increase fast and significantly therefore it will be difficult to reach the goals of increasing revenue in 2015.

 

---> Select the alternative No 1 (Increase more working hours)