Strategic Analyses for Estia Health Aged-Free-Samples for Students

Question: Conduct a strategic analyses for Estia Health Aged Care, an Australia's publicly listed company. Answer: Introduction Estia was established in 2005. Today the company is one of the biggest residential aged care providers in Australia. The company offers more than 67 facilities and the activities are conducted in more than 5,910 places. 7,000 employees are operating the activities across victoria, South Australia, Queensland. Estia motive is to offer its consumers with the good standards of aged care services in an innovative and supportive environment. The company has an experienced management team who are dedicated towards the work and has the capability to conduct the activities effectively. The operational efficiency of the company is to give proper results via its corporate center situated in Melbourne and also across Australia. The market share of the company is large and the financial strength of the company is strong as compared to other health aged care companies. In this report, the discussion will be made by taking into consideration pestle, Porter 5 five forces, strategic capabilities, VRIO and SWOT. In Australia, the problems that are faced are related to aging population and making policies and healthcare for the aged people. There are many policies measures that are taken into consideration by the government to aim at social support. There are also some policies that are successful and have been faced at the time of implementation. So there are many problems in the residential aged care (Marttunen et al., 2017). External analysis Pestle Political analysis It is seen that the public expenditure on health is low as compared to other countries and the residential aged care is more dominant in the private sector. The facilities of the government assist to attract foreign investors by considering the investor-friendly policies and tax incentives. The government hopes to offer innovative drugs and also to offer modern medical equipment. By giving emphasis on telemedicine in Australia the services can be availed easily and also information technology and communication can assist the customers (Attoe et al., 2017). The government is also giving focus on encouraging good partnerships that are both private and public. It also helps to promote medical tourism. The Australian government is giving emphasis on giving proper and affordable healthcare services so that the vulnerable sections of many areas can be developed (D'Andreamatteo et al., 2015). The major part is of government to give priority to the residential aged care in developing the agenda. There are also many hospital schemes that will help to create opportunities so that residential aged care can grow. Estia has to consider many policies at the time of implementing the plans. Economic environment The healthcare expenditure is availed from private patients just because of the high income. The rise in the income can increase the middle age group people (McCarthy et al., 2015). The government investment policies also help to give proper opportunities as the large investments require good scale to raise the infrastructure of the healthcare. It is also evaluated that majority of healthcare services are offered by the private sectors. The spending behavior of the public in Estia will rise as there are many chances of rising and low income (Al-Abri and Al-Balushi, 2014). Socio-cultural environment It is seen that there is a shift in diseases profiles. The diseases are shifted from infectious to lifestyle-related disease. In Estia the people who are aged are offered good quality services so that they can take care of their health. The people who are not able to take care of themselves come here so that they can take care of themselves in a proper manner (Kail and Cavanaugh, 2018). The population rate in Australia is high so there is a huge shift in the old age homes as people go there so that they can live happy and safe life. The rise in the literacy rate is improving the awareness in the health sector about the lifestyle diseases that can be very costly for the old age people (Barzman et al., 2015). Technological environment The healthcare system in Australia is under high pressure. There is a long list of old age people who need good treatment and also emphasizes on enhancing the living standards (Vergados, 2010). Estia offers cost competitive medical treatment so that the people can be satisfied and happy. If the company considers the latest technology then proper assistance can be given to the people who are the part of the aged care hub (Kelly, 2017). It is seen that the company should also give emphasis on speeding up the technology that disrupts the industry. The slow speed of the technology can take more time as well as the fast speed of technology can enhance the profits (Canuto et al., 2017). In estia the technological impact takes into consideration the overall technology impact on product offering and also on the rate of technological diffusion. The impact is also seen in the value chain structure in health and service sector and also the cost structure is affected (Moro Visconti, 2016). Legal environment In many countries, there is a legal framework so that intellectual property can be protected by the rights of a company. The organization should analyze everything before entering the markets so that competitive edge can be achieved. The legal factors that should be taken into consideration at the time of entering the market are employment law, data protection, health and safety law, discrimination law and consumer protection law (Nilsagrd et al., 2015). Environmental factor There are many different markets that have different standards which can impact on the overall profits of the market. Before entering the new market the company analyzes the environmental standards that are necessary to be conducted in those markets. The environmental factors that should be considered by the company are: weather, climate change, endangered species, recycling, and management of waste. It is important to consider proper regulations so that the activities can be conducted smoothly (Krause, 2015). Porter 5 force Model Estia can take into consideration porter five forces analysis so that proper understanding can be made of the competitive forces so that profitability and proper strategies can be made. Porter five forces analysis gives major impact on the overall profitability of the company in the operations are conducted. The five forces are: Threat of new entrants The new entries in healthcare equipment and services create innovation and many other ways of conducting the activities as it gives pressure on low pricing strategy and offering new value propositions to the consumers. The company has the responsibility to manage all the issues and to create proper barriers so that competitive edge can be protected (McCarthy and Chaplin, 2016). The company can manage the threats of new entrants by taking into consideration innovative products so that new customers can be given chance and also old customer can be given reason to purchase the product and services of the company. By creating economies of scale so that the fixed cost proportion can be reduced by giving focus on per unit. (van Raaij, 2016). Also by creating capabilities and spending money on research and development the new entrants can easily enter into the dynamic industry where the payers are set and proper standards are maintained. The major significance is that it minimizes the overall profits for the new entrants and also discourages the new players in the company (Newman and Newman, 2017). Bargaining power of Suppliers The companies in the residential aged care can purchase the raw materials easily as the suppliers are many. The suppliers can minimize the overall margins. The suppliers who are powerful in this sector can consider their power of negotiation to gain high prices from the companies in the health industry. The impact is seen on the higher supplier bargaining power as it reduces the profits of the health industry. The power of the suppliers can be managed by creating a good supply chain with many suppliers. The experimentation with the designs of the product can also be sued so that the prices can be low of the raw materials. It is also important to develop dedicated suppliers whose overall profit depends on the firm. The major lesson of the company is to learn from Wal-Mart and Nike that how they create the manufacturers of the third party and have less bargaining power (Makai et al., 2014). Bargaining power of Buyers It is analyzed that buyers demand more. They purchase the best product available by giving fewer prices. This can put pressure on the overall profitability and also can reduce the customer base of the company as the bargaining power is high of the customers and they can also avail high discounts (Zalengera et al., 2014). The bargaining power of buyers can be handled if they build a large base of customers and also it will help to reduce the bargaining power of buyers and offer an opportunity to the company so that they can streamline the process of production. By considering innovative products the customers can easily offer discounts and offers on established products so that new products can limit the bargaining power of the buyer. New products will also minimize the defection of the old customer of estia to its competitors (Naccarella et al., 2018). Threats of substitute products or services When the new product and services satisfy the requirement of the customers the overall profitability of the company enhances. The threat of substitute is high if it gives a value proposition that is unique to the company and its customers. The estia can manage the threat of substitute by being service oriented rather than product oriented. By evaluating the core requirements of the customers rather than what actually customer wants to purchase. The switching cost of the customers can also help to manage the threat of substitutes. Rivalry among the existing competitors If the rivalry in the company is intense then it can reduce the prices and also reduce the overall profits of the company. The company conducts in a competitive residential aged care . The competition does not consider overall profits of the company. Estia can manage the rivalry competition by creating sustainable differentiation and also by building the scale that can compete properly. By collaboration with the competitors, the market size can be increased rather than giving a competition in the small market (Cadar et al., 2017). So, by evaluating all the competitive forces it is seen that to achieve the strategic picture of the company the profitability is considered and the main focus is given on the changing trends that can exploit the emerging opportunity. SWOT Analysis Strength of Estia As the company is one of the leading companies so there is much strength that assists to grab the large market share. The organization has a good performance in the new markets and it has entered into the new markets to achieve success. The expansion has given an opportunity to the company to enhance the new revenue stream and diversifies the economic cycle risk in the overall market where the activities are operated. The major strength of the company is that it has a strong cash flow that offers resources to the company so that new projects can be expanded (Ahmadi et al., 2016). There are reliable suppliers of raw material that helps to overcome any supply chain bottlenecks. The company also has the good dealer community that helps to create a good culture among the distributor and dealers so that they can promote the products and can also invest in training so that maximum benefit can be achieved. Estia has good success at going to market strategies for its products. The company is also giving emphasis on investing in training and development so that proper results can be considered. Weakness It is seen that the company require a huge investment to consider the latest technology so that the expansion can take place effectively. The company has to put more money so that the process can be integrated. In the current scenario, the investment in technologies is not at par by considering the vision of the company. Estia is not able to manage the challenges by new entrants in the segment and lost small market share. It is also evaluated that the financial planning is not done properly and effectively as the current ratio and liquid assets gives the idea that the cash can be used more properly and also the company is focusing on raising the capital so that positive impact can be achieved in the long term (Kapoor et al., 2016). Opportunities The company has following opportunities that can be availed. There are more customers from the online platform. The company is investing in an online platform so that more and more customers can be attracted. The competency of the company can achieve success in similar products. It is important for the company to open new markets so that proper adoption of latest technology can take place and the free trade agreement can be made effectively. Latest technology offers differentiated pricing strategy that can help to maintain loyal customers with good service for long term. The new taxation policy can also give direct impact on the activities of the business as it opens a new opportunity for the company (Ajmera, 2017). Threats For the long term, the threat to the company can be new technologies that are taking place in the market. Liability laws in many countries are different and it can bring change in the overall policies of the company. Estia also faces a problem of different laws and continuous fluctuations in relation to the standards of the products. The profitability can be enhanced in the industry if the pressure is downwards and also the focus should be on sales so that overall activities can be conducted smoothly. Currency fluctuation is also the major threat to the company. Strategic capabilities Strategic capability is the ability through which the company conducts the activities so that the strategies related to competition can enhance the value over the time. So, estia is the company in which proper care is taken of old age people so that they can live their life in a happy manner. In this section the resources and competencies will be discussed of Estia Company: Resources based view The resources that are used by the company are beneficial for the people who are aged. Estia requires threshold resources so that they can compete in a market. The company gives necessary needs to the customers so that they can compete in the market. Resources and technology are important for the company to sustain in the market. It is analyzed that if it is managed properly then it can be easy to achieve competitive advantage. It also assists to enhance the overall profits and revenue of Estia (Sweeney et al., 2015). A resource-based view is a strategy through which overview is done by considering the strategies of competitive advantage. Estia resources should have many characteristics so that competitive advantage can be achieved. The characteristics are: Estia gives value to its customers in the global market. Like for example, the organization should offer products and services at a low price so that everyone can avail easily. Resources should be unique so that competitive advantage can be achieved to estia if comparison is made with other competitors. The competitive advantage must be imitable. Like for example: the products and services should be offered to the customers in a proper manner and it should not be copied from the competitors. Also, the resources should not be replaced and exchanged with other resources of the competitors. The resources should be utilized to initiate the same strategy and approach that is necessary to achieve success in the market. Competencies Estia can achieve competitive advantage by giving proper services to the customers so that the satisfaction level can be enhanced. It is seen that if products and services are not offered at less price as compare to the competitors then it can be not easy to survive in the competitive environment. Estia also focuses on giving good products and services to the customers. VRIO MODEL This framework is important as it considers the capabilities and potential that is favorable to sustain the competitive advantage. It also gives a positive impact on the overall activities of the organization. It also diversifies the products and services in the competitive market. Valuable In this step, it is evaluated that a resource adds value to the product and service of the company. The resources that are offered by the company are valuable as they help the old age people to be happy. It is valuable as the value of the customers is enhanced. Estia gives emphasis on offering products and services at low cost if the comparison is made with other competitors. It is seen if the resources so not meet this condition then it can give disadvantage related to competition. It is essential to analyze the value of the resources so that internal and external conditions can be less valuable. The resources that are provided to the customers are for long term. Rare Resources that can be attained by the companies are known as rare. In this, it is important that the products should be valuable to the customers so that they can easily compete in the market. This situation arises when the companies have the same type of resources that lead to tough competition in the market. The companies use same resources so that effective strategies can be implemented and superior performance can be achieved. Costly to imitate If the resources of the company are not imitated then it can be costly for the organization to imitate the product. Imitation can take place in two ways. The first way is by considering the duplication of the resource and secondly by giving comparable products and services in the market. Estia has valuable resources and by this, the competitive advantage can be achieved effectively. Organized to capture value It is seen that the resources not only give an advantage to the company but if it is not recognized then it can give negative impact on the value of the customers. The company should take proper management systems and policies so that potential can be realized and the resources and capabilities can be evaluated. Conclusion So it is concluded that resources play an essential role to enhance the market share of the company. In this report SWOT analysis, pestle analysis, Porter 5 forces and competitive advantage are considered to evaluate the market condition of estia. 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