(sarah)

HRM5002D
PERFORMANCE IMPROVEMENT IN MANAGEMENT IN HEALTH & SCOIAL CARE
Table of Contents
Task 1: Strategic Planning models    3
Introduction to Strategic planning models    3
SWOT Analysis    3
Porter’s Five Forces model    4
Recommendations    5
Task 2    6
a)    6
)    8
Task 3    9
References    14
Task 1: Strategic Planning models
Introduction to Strategic planning models
Strategic Planning is the process of creating a blueprint and documenting the same along with establishment of a direction for the organisation. According to Butler (2016), the strategic plan provides ample scope for the recording the mission, vision, values and long-term goals and objectives of an organisation. BME Luxury care Home is a registered business in England and the directors’ are planning to invest in privately owned and managed nursing home. Adopting a strategy may be the first step but execution of the same is of utmost importance for any organisation. Detailed discussion of variety of strategic models is the need of the hour and selection of the best model is equally important.
Strategic planning is one of the foremost requirement for growth of business. Forming an effective strategy enables an organisation in moving in the right direction. Different strategies need different requirement and the same strategy may not be suitable for every organisation. The strategy depends on the demands of the situation and the managers should focus on selection of the best strategic planning method, as it would lead to effective strategic planning. As noted by Birch (2017), various strategy-planning models include balanced scorecard, strategy map, SWOT analysis, PESTLE Model, Gap planning, Porter’s Five Forces and Blue Ocean strategy. Among the mentioned strategic planning models, the model that can be used for care sector in England is Porter’s Five Forces and SWOT analysis.
SWOT Analysis
SWOT analysis refers to identifying the strengths, weaknesses, opportunities and threats of an organisation and then drafting a plan for converting the weaknesses into strengths and threats into opportunities ((Tunca and Zhu, 2018)). In the case of BCE Care homes, the SWOT analysis seems to be a good option as both the internal and external environment can be analysed through the same. Strengths and Weaknesses are internal to the organisation and threats and opportunities are external to the organisation.
The strengths of BCE Care Home include a strong top line, ample experience of the management, availability of healthy working capital and increasing retained earnings over the years. The top line of the company seems to be good as the company operates a luxury care home, which is of great demand in the recent times. According to Bouma et al. (2017), public prefer luxury in everything and getting treatment in a luxury manner is prefe
ed now a days. The cu
ent assets of the organisation is around 35% higher than the cu
ent liabilities, which indicates that the firm is able to manage its short term funding requirements with ease. The value of net property and equipment also seems to be very good, which indicates that the company can utilise certain equipment if the new nursing home is opened. The management of the organisation is highly experienced in managing the business and the same experience can be effectively used in starting the new nursing home, if required.
The weaknesses of the BCE Care home include a very high debt equity ratio and lower net profit margin. The debt equity ratio indicates the extent to which the company is leveraged. Lower the debt equity ratio, better it is for the organisation. However, in case of BCE, the debt equity ratio seems to be more than 4.5 times, which is an alarming signal for the organisation. Most of the funds being used in the business belong to external lenders. Long-term bo
owings account for almost 68% of the total assets of the organisation, which is not a good number. The net profits margin of the organisation is merely 1.77%, which is very low in comparison to other organisations providing the same service. Luxury services provide ample margin for the owners and therefore, is always an attraction for corporate investors.
Opportunities of BCE Luxury care Home include increasing demand for medical services in United Kingdom in the event of COVID-19 pandemic. The support of the government for setting up nursing home is an added opportunity for the organisation. The government has been actively supporting individual interest in setting up nursing homes in the recent times. Variety of equipment and other facilities are provided by the government agencies to provide quality care services in the nursing home.
Threats of BCE Luxury Care home include increasing pressure from financial institution, increasing competition, availability of established players in the market. The mentioned threats can lead to issue in the management. The organisation seems to be overleveraged, due to which there are high chances of interference of external lenders as insolvency situation may lead to loss of their interest.
Porter’s Five Forces model
Porters Five Forces Model is a strategic planning model for analysing the competition in the market (Erasmus et al., 2016). In the hospitality industry, the competition has increased in the recent times. The five forces that determine the level of competition in the market are threat of new entrants, threat of substitutes, threat of new entrants, bargaining power of suppliers and bargaining power of buyers. In case of care home medical industry in UK, there has been an increased in the number of hospitals in the recent times because of government support.
There is very high competition in the medical industry in UK as there are large number of players. In addition to that, few of the nursing homes have state of the art facility, which may lead to decrease in clientele of the organisation. In addition to that, higher the competition, more are the option with the customers. As the customers are highly aware of the market competition, they tend to demand extraordinary services.
According to Uhl and Gollenia (2016), due to existence of a large number of suppliers in the market, the organisation will have a higher bargaining power, which will enable the organisation in procuring medical items at a low cost. However, there are certain medicines, which are not available everywhere and the organisation may have to pay premium for that. There are large number of nursing homes and hospital across different localities of United Kingdom. Therefore, the organisation will have to face huge competition in the market. However, luxury care service is a niche offering and there are not many players offering such high quality services in the market.
Due to the support of the government, many organisation have started new nursing homes and hospitals in the recent times, thereby leading to increasing competition. Due to active support by the government and attractive returns in the industry, it is very easy for anyone having ample capital to start a nursing home. Although there may be licensing complication, but the same can be managed. Fitness is an option for dealing with medical issues however; few medical urgencies cannot be ignored. There exists no perfect substitute for medical hospitals and nursing homes. Patients can opt for Ayurveda and other natural treatments, which seems to have become very popular now days. The company is highly leveraged and therefore, any expansion strategy will lead to an increase in debt
Recommendation
From the above discussion of both the models of Strategic planning, it can be observed that SWOT analysis is a better option. In case of SWOT analysis, both the external and the internal environment of the organisation is analysed. As noted by Pa
is et al. (2016), due focus on identifying internal strengths and weaknesses enables an organisation to understand its potential in an effective manner. In addition to that, the competitors and other factors can be easily analysed in the weakness and threats part of SWOT analysis. On the other hand, Porters Five Forces analysis focuses more on dealing with the competition. Therefore, the organisation should opt for SWOT analysis model of business growth. This will provide the management a real scenario of the stability and scope of the organisation for future. From the financial statements, it can be observe that the debt equity ratio is very high and organisation should focus on reducing the same.
According to Butler (2016), the Porters Five Force method may not provide the information regarding where the organisation stands....