MSc Health and Social Care Management

Strategic Business and Service Planning

Business plan for an Old Age Care Home in UK

Submitted To: Marion Jackman
Submitted By: Santi Thomas
Date: 29th May 2015

Table of Contents

1. Introduction 3 1.1 Setting the Objective 3 2. Market Analysis 5 3. Market Strategy Plan 8 4. Operational Plan 12 5. Current and Future Financial Plan 13 6. Ownership and Commitment 14 7. Future Scenario 15 8. Conclusion 16 References 18 Self Assessment Form 21

1. Introduction

In developed nations like the UK and Japan, there is an exponentially growing need of care and nursing homes for the elderly. This is because UK and other developed nations have a high percentage of ageing and mature population. Their population rate is poor and the people above the age of 45 are more than 65% of the population. This has led to a drastic change in the overall health and social care requirements in the country (Euromonitor, 2015).
NHS is concerned and taking steps to fulfil this gap but it requires efforts both at public and private level to achieve this mammoth task of providing residential and nursing facilities to people above the age of 60 who are living on their pensions (Oswald et al, 2007). There are a large number of elderly people who by force or by choice live in old age care homes and hence the quality and quantity of these centres should increase manifold based on the growth in their composition in the population.
So, a business plan and strategies are being proposed for such old age care centre which should be developed in UK catering specifically to aged population not receiving any pension or very limited which is not sufficient to live a decent lifestyle. This care centre would have two unique features, firstly it would provide residence to elderly above 75 years of age as their physical and medical needs would be different and secondly it would also have medical facilities inside the premises at a small scale to handle any kind of emergency (Addis et al, 2009)
1.1 Setting the Objective

The purpose with which this old age home would be established would be unique and non-profit. Most old age centres run it as a profitable business where people with money can get all the facilities, live with likeminded and like aged people, indulge in some hobby based and earning based activities and spend their time wisely (Borg et al, 2006).
But this old age care home with the name of “2nd Innings Care and Nursing home” is an ideal place to feel like a home away from the real home. The sole motto is to provide as personal attention as possible to the elderly so that their retirement age and the very difficult last few years can be comfortably lead with love, affection, care, facilities and joy. The culture at the old care home is very people oriented which places the elderly at the locus of everything. Unlike other old age homes which work professionally and have very strict rules for stay, meets, outings, medical help, etc, 2nd Innings has developed and cultivated all the facilities around its residents (Slater et al, 2011).
In developing the service business in health and social care is it utmost important to visualize and write down the mission and vision statement. A vision statement is a very powerful one liner about the company and communicates to all internal and external stakeholders what the company wishes to achieve through its business. They are generally aspirational and futuristic stating the dream which the company wants to fulfil (Wheelen & Hunger, 2002).
On the other hand mission statement is the comprehensive explanation of the purpose of the company, its reason for existence, a declaration of the businesses, customers and overall focus areas and core philosophy. It will provide the means to achieve the ends which are declared in the vision. So mission is more realistic and the actual goal to be achieved (Pearce & Robinson, 2007).
For the old age home business, the vision statement that has been developed is based on the dream and wish of the founder who believes and cares for the elderly and the fact that age puts them in a helpless condition. Hence the vision statement is “A caring home looked after by the Almighty”. This vision statement clearly explains the trust that the founder places in the Almighty and believes that he will definitely take care of the aged to lead a comfortable life. It also points out that the people running the show have the blessings of the supreme power to take care of the people who cannot take care of themselves now.
Similarly the mission statement also commits itself to the same cause but through a more elaborative means to achieve it. The mission statement of the 2nd Innings is “To aspire to become an abode to the elderly with providing world class residential and medical facility by focussing on quality, service and caring attitude in order to gain strategic advantage in the market for the benefit of all stakeholders”.
Both the vision and the mission proclaim a connected approach to build a strong name in the old age care sector and be known for the quality of service and a home for the elderly more compassionate than their original home (Thompson & Strickland, 2003).

2. Market Analysis

A business and its strategy get determined based on the market analysis and after understanding the various factors of external internal environment. These constitute of the environmental appraisal which has to be external and internal (Hill & Jones, 2012). To analyse opportunities and threats and to gauge the success of the business venture, it is crucial to first conduct a PESTED analysis. * Political- UK has a very stable government with much focussed ideology to take care of each segment of the society of any age. Their social security system has very strong foundation which has the support of the power at centre. The political systems and policies are in favour of increasing birth rate and decreasing death rate. Hence this concept of establishing old age care and nursing homes is well considered under the areas to be considered for growth. With the growing ageing population this is on top of the political agenda to establish more care centres and link them to NHS in order to provide the elderly with timely and appropriate medical facility (KPMG, 2015). * Economical- the economy is among the most developed economies of the world, next to USA and Japan. The growth rate in GDP is around 1.7 to 2% which has been improving after the crisis in Europe in 2008-09. The economic indicators are strong and fundamentally built which have proven to be good for the economy and helped the country during crisis. The stock market is working positively with many UK companies going international and becoming very big global multinationals. The entre economic scenario is upbeat which is helping businesses in every sector to grow and flourish. * Socio-Cultural- the social values, cultural beliefs, traditions, customs have drastically evolved over time. The economy which earlier used to have a joint family concept has become completely nuclear with everyone fending for himself. The social ties have changed into more convenient ways of managing family members. Due to working parents, kids are staying in day care facilities and the elderly in the old age homes. Moreover government provides for the expenses borne by the elderly for their medical needs hence people are more comfortable at these places where they find link minded people and a full time carer or nurse which is not possible at home (PWC, 2015). * Technological- revolution in technology has helped many businesses like this to take its advantage to be sure of the service. These days all such places are covered under CCTV cameras where family members can view as how their parents are living their life in the care home. This makes them mentally satisfied that they are being taken care of very well. Also all technological machines for blood pressure, diabetes, ECG checking are these days managed at the premises of the care home which helps in taking immediate first aid action is something goes wrong. Gadgets and smart phones have made it very easy to remain in touch and contact with the family members and the care taking staff of the care home. * Ecological- these days there are very stringent norms for maintaining the atmosphere of old age care homes. Efforts are being made by the owners to keep it green, pollution free, close to nature, allow for organic farming and duck rearing, etc. these make these places very close to nature and hence the elderly can take the benefits of beauty and feel happy and relaxed. The rooms also are at the ground floor for them and are well lit with fresh air flow into them. * Demographics-the needs for such kind of health and social care service have risen tremendously with time because of the skewed changes in the demographics of the country. Due to increased life expectancy of the elderly owing to better medical facilities the requirement of old age care homes have increased. With both partners working, it is difficult to manage elderly at home as some emergency may crop up. Hence they get accommodation in such homes which are built keeping in mind the needs of the elderly. Their numbers are on arising because more than 65% of the population is above the age of 45 years of age. Hence this demographical trend indicates further need of such homes in the next 20 years to come (Euromonitor, 2015).
Now it is relevant to conduct the SWOT analysis of such business venture in order to know the feasibility and commercial viability. Strength * Reputed name in other business * Very high number of rooms with very comfortable and simple furniture * Provision of residence and medical facility * Full time care taker with each elderly | Weakness * New entrant in this segment * Major investment needed so arrangement of funds has to be done * Returns are slow to come * Land is on lease and not own | Opportunity * Growing population of elderly age category * Very few established names offering good service and quality * Government has this on the agenda to be increased in numbers * Pricing is a major influencer | Threat * Many established companies already doing very well in this business * Tough competition due to numbers * Government very strict with providing approvals * Government is planning to build their own |

The SWOT analysis would help the company take a determining decision regarding its business in the health and the social sector. This sector is on a rise due to the growing need for such old age care homes.
Stakeholders Analysis- any business in order to be successful has to deeply understand the needs and expectations of all stakeholders involved. Stakeholder is that individual or body who is keenly interested in the running and growth of any business. These people have something at stake in the company in terms of money, investment, business, source of income, source of product or service or any other which may have meaning for them. These stakeholders always seek some gratification for their interest in the organization (Johnson et al, 2008). Hence it is crucial to understand and analyse what these stakeholders expect and then plan the business. * Investors- every investor seeks maximum return on his investment whatever may be the business whether social or otherwise. For old age homes also the investor who may be the founder, the banks and other private people seek to make money out of their money. Hence the pricing and maintenance has to be of the highest order which brings in the right occupants and regular income for the old age care home. * Customers- the needs and expectations of the customers are of utmost importance. For this business the customers are either the old age people or the members of their family who will pay the bills for residing and medical facilities. It becomes crucial to keep their concerns in mind and provide very good service to the elderly who are staying there so that they never miss their homes (Kotler & Keller, 2008). * Employees- they are the most important stakeholders as their efforts are required all the time because the residents are old age people. The employees consists of the care takers, nurses, chefs, security, manager, doctors if any, and other supporting staff who are continuously dedicated towards serving the customers in the best possible manner. Hence efforts are to be made to keep them motivated and happy so that they can give high productivity to their jobs. * Suppliers-these people are involved with providing various infrastructural support and inputs for the running of the old age home. They are important to maintain continuous supply of good quality raw material for kitchen, rooms, relax and common rooms, medical facilities, other infrastructural inputs like white goods. Their interest has to be safeguarded by making timely payments and choosing the right supplier. * Competitors- they are the other old age care and nursing homes operational in the country. They have to be continuously monitored and analysed to change the strategy in the market. Their analysis is crucial to understand their strengths and weaknesses so that proper business can be done and executed. Their activities directly and indirectly would affect the working of our own old age home (Keller, 2012). * Regulatory Body- the ministerial body which governs and regulates the working of old age care homes in order to maintain the standards as per the requirements of the elderly. These require certain very strict norms for hygiene, facilities like wheelchair and nurses on duty, medical practitioners making regular visits, managing their pension accounts through which payment is made. Proper understanding of the law and rules governing management of old age care homes is essential in order to not raise any issues with the regulator.
Hence a detailed and proper stakeholder’s analysis should be conducted before venturing out in this very critical and sensitive business where heart should rule the head. 3. Market Strategy Plan

This business like any other needs a detailed and comprehensive marketing strategy to be developed in order to position and build it up in the market already cluttered with old age care homes. For this it is required that “2nd Innings” build a superior brand image through focussing on service and quality for people who reside there. The marketing strategy can be based on the following premises.
Ansoff model- this model discusses the most appropriate strategy that a company should adopt with the right combination of product and market which converts into a product market matrix (Thompson & Strickland, 2003).

Source: Created by the author
The various combinations are made from Products which can be New and current. Similarly markets can be categorized into present and new. The current business proposition is in the category of Product development as it is new concept of having medical facilities and all machines inside the old age home care. It is also under the category of Market Development as it will solely cater to elderly above the age of 75 years because they are completely dependent on caretakers. This combination of devising a new offering or the new product in the current market and new market for the current product would work well for the company.
These two combinations can help the company position itself in the new category for the new kind of market segment and trying to create a niche for them. As the cost of medical facilities have reached to the levels of £50,000 p.a. to £ 100,000 p.a. in critical cases, it has become important to provide them at reasonable cost to the people in that age category (OECD 2015).
Porter’s Value Chain Analysis- Another way to develop the strategy for the company is by analysing itself on the Porter’s Value Chain Analysis. This model would help the company identify and evaluate the various processes and activities within the organization into primary and secondary activities so that they can be clubbed together to make meaning and hence strategy can be formulated (Wheeler & Hunger, 2002).

Source: BusinessSetFree.com (2013)
The main or primary activities of the old age home would be the inbound logistics like inputs, raw material for kitchen, furniture and white goods to the rooms and the other areas, medical tools and equipment, etc. Their operations would include the day to day working of running the kitchen, upkeep of the home, taking care of the needs of the elderly, regular medical tests, etc. The outbound logistics would involve various third parties who are working with the old age home like laundry cleaners, maintenance company, medical practitioners visiting for conducting tests, hospitals tie-up in case of dire emergency, etc. The Marketing and Sales is the department taking care of promoting the old age home brand name and doing its marketing to fill the various rooms. The Services part is the service quality of the old age home while taking care of the elderly during their stay there. This also involves conducting various meetings, taking them for outings, managing their medical records, maintaining their specific diet charts based upon their health.
The other secondary or support activities are needed to be developed to provide help and guidance to the primary activities of the old age care home. These include HR activities of recruiting, selecting, training, compensating and developing the staff to properly take care of the elderly. The other activity is Technology development which is concerned with managing the overall IT infrastructure in the care home like telephones, internet, technological gadgets, medical equipment, etc. The third supporting activity is procurement of all the raw inputs which are needed to run the care home operationally and efficiently. Hence managing its sourcing, finding suppliers, finalizing quotations, delivery, payments etc are taken care by the procurement department.
The marketing strategy would be incomplete without developing the Marketing Mix or the 4 P’s for the old age care home service. This is primarily a service and not a product hence the mix would be of 7 P’s which would comprise of three additional P’s namely Physical Evidence, People, Process (Blythe, 2009). * Product- the product is the service itself which is the availability of rooms for the elderly so that they can spend their retirement years in a relaxed and caring environment. * Place- this relates to the actual building of the care home where people can come and stay. This basically means the place or the distribution network which in this case would be the building itself, its website, its partnering bodies like hospitals, etc who would provide them residence facilities (Aaker, 2008). * Price- this is the cost that one has to incur for taking the facility of the care home. It includes the rent per month and other medical facilities inside the premises. This would range between £ 1500- £ 2200 per month depending upon the room chosen and the stay plan taken. * Promotion- the various methods to communicate and promote the care home to the right target audience would be clubbed under promotion. A mix of various methods like advertising, personal selling at hospitals, conducting public relations events to create awareness, sales promotion for couples and friends to stay together to avail discount, direct marketing and approaching people directly and designing digital platform marketing are few things that company should take up for promoting their brand (Armstrong et al, 2012) * Physical Evidence- as the business is about providing a place to stay so the infrastructural requirements have to be of highest level in terms of quality of furniture, brands of white goods, cleanliness, hygiene, rooms, medical rooms and equipment. So the company should focus on building good quality of physical infrastructure in order to provide good service. * Process- this includes the overall process of delivering the service of residence and medical to the occupants. As it happens in a systematic and step by step manner, each process and activity has to be delivered right every time without any errors. * People- the entire service of an old age home are dependent upon the service provided by its employees or people working with them. Hence the care home needs to train and motivate people to be very courteous and polite to the residents, proactive and considerate in knowing their needs and be very pro-customers. 4. Operational Plan

The most crucial task is the execution and implementation of the strategy at operational level at the old age home. Strategy is the planned course of action which a company formulates to provide direction to the people working within the company. It lays down the blueprint or the framework which the company should follow to achieve the desired organizational objectives (Slater et al, 2011). The old care home is being started to convert it into a chain of homes which can be opened across UK in the next 5-8 years and help the elderly find a comfortable yet affordable residence in the late years.
The overall vision and mission can be put on paper only when there are proper operational and tactical plans in place. For this it would be required to break down the bigger strategy into smaller plans which would be functional, team based or even individual. This would help them understand their daily and tactical tasks and can execute properly (Lee & Carter, 2012).
In the operational task the company would focus on achieving productivity, improving processes, enhancing pace of work and developing people. These 4 P’s of operational performance would lead the company to its destination to become a known name in the old care home business.
For improving operational performance the organization can adopt the Balanced Scorecard Approach. This internal analysis model helps to analyse the company and its performance on four important pillars for growth namely, Financial, Customer, Internal Business and Learning & Innovation. These parameters would draw a chart for the company to follow to reach to the vision they have dreamt of (Hill & Jones, 2012).

Under this model, the old age care home would execute, implement and build their operational performance on these aspects. Under the customer perspective they want to build a reputable and known company who wants to serve the market for long. In the financial perspective the investment has to generate returns so that all the stakeholders can gain from this. In the internal business perspective how the company would develop their processes and internal working framework to deliver good performance. But most importantly the company has to implement and achieve results on the learning and growth perspective which details the ability of the company to grow and innovate to become better than what it is.
Based on the analysis of the company on these parameters the organization would be able to implement their future strategy and what course to choose which would lead them to the desired goals and objectives. 5. Current and Future Financial Plan

The most important aspect for any organization is the financial management where they need to manage the sources, utilization and returns they are able to get on their investments. Each stakeholder within and outside the organization expects a decent level of return on investment which he has committed to the organization. For this the organization has to develop financial objectives with respect to revenue generation, profitability, expenses, inflow and outflow of funds, capital budgeting, working capital and other financial parameters (OECD, 2015).
The organization has to scout for various sources of funds to make the initial investment and also the ongoing expenditure. The various sources which the company can seek investment are banks which lend money for such social and health businesses. As the company is planning to open many properties in UK with similar positioning they would need major funding to other investors like venture capitalists and angel investors also. As it is a unique and well planned business, the company would be able to secure funding through a critical financial analysis presented to them.
The company can also seek the attention of FDI who are keen to invest in hospitality and social care business due to the growth prospects which are present in this sector. But the founders would also have to dedicate some equity money from their own self in order to build the initial confidence among the investors and stakeholders (Lewis, 2001).
Another aspect of managing financial perspective is the usage and utilization of the funds in the most appropriate manner in the operational performance and running of the care home. This involves categorization of the various expenditures under headings and subheadings in order to justify the purpose and the outcome of the financial strategy.
The usage of funds would be categorised into expenditure on marketing, infrastructure development and management, raw material procurement, medical expenses, administrative expenses, governmental and other approvals expenses. This categorization would help the company to manage and curtail expenses depending upon the priority expenses and criticality of the purpose (Curtis, 2012). 6. Ownership and Commitment

For every business, expansion and growth are key factors which they want to build over time. Similarly this company also wishes to establish and grow its business in this health and social sector and gradually expand it to other countries as well. The future growth of the organization is highly dependent on the current state and planned future strategy. As the company is focussing on a niche segment with very niche service it would continue to target the UK market in this manner itself (Leichsenring, 2004).
To attain this future strategy and growth the company needs to continuously build on its quality and service in order to convert it into its competitive advantage for the long run. Competitive advantage refers to those tasks or areas or functions which can provide some kind of differentiation and edge over the competitors. The company would like to build on the uniqueness of the residence and in house medical facility and nurture it over time by strengthening it further to make it their competitive advantage to fight the competition. Although the future is always uncertain but the company would develop its 7 Ps in such a manner which would always provide a cushion and support to further build them up. The most important factor for success in such kind of sectors and businesses is the quality of service delivered against what was promised.
This competitive advantage which they seek to build over time would get converted into strategic and sustainable advantage for them is managed properly. For this both top management and other verticals and levels have to be completely focussed towards the objectives and dreams in sight and still to be developed (Johnson et al, 2008). This possibly can be achieved through effective collaborations and strategic alliances with suppliers, vendors, employees, customers, third party companies, etc. In order to get customers above the age of 75 years they have to have strategic collaboration with hospitals who would recommend such cases to them. They must also develop strong ties with suppliers of various infrastructure goods which help in the running of the old age care home. It also needs direct agents in the market who would work as their representatives and maintain a continuous flow of residents. But the most important alliance would be with customers who would provide referrals and would bring their close ones to the age home (Kharicha et al, 2007).
These all strategies would ultimately help the company move in the right direction of their vision and build a strong brand name in the service business. 7. Future Scenario

Like any other business in any commercial sector, even this business in health and social care has its own set of risks, critical success factors and key performance indicators. Risks are the possible challenges which may exist in terms of finance, marketing, administration, regulation, customers or channel partners for the organization. Many times these risks can be judged beforehand but mostly they arise from nowhere. Like some regulation and rule for running an old age home may be changed by the regulator. This may completely impact in either negative or positive manner on the company. Similarly other external and internal factors in the overall business environment can affect the working and future of the organization (Pearce & Robinson, 2007).
For every industry few critical factors are important and should be identified in order to move in that direction for fulfilling those. In a service business like heath and social service, quality of service and behaviour of the employees can be considered as the critical success factors which are crucial to be built in order to be successful in that sector. There are many options of old care homes available to the elderly but the fact that they will build their loyalty towards “2nd Innings” will depend on these two crucial aspects. Along with this every organization also needs to plan and specifically lay down their key performance indicators to whom they will compare their actual performance.
Key Performance indicators or KPI’s can be described as the metrics on which the performance of the business would be judges after sufficient and decided time has passed. These can be on the basis of revenue figures, occupancy ratio of the rooms, profits after taxes, cost reduction, employee and customer satisfaction levels, etc. the organization needs to plan and list down these parameters or metrics in the planning and strategy phase so that the company would have an aim and would be able to work towards it. This together with an understanding of the critical success factors would help the company establish itself in the highly competitive market of social care (Hooley et al, 2012. 8. Conclusion

To summarize, it should be analysed deeply that the success of each company depends upon its strategy and business plan. The provide direction, vision, impetus, push and motivation to achieve organizational objectives. In the same spirit, this business idea would not be something unique but the way it would be built and managed would be different from the others. The environmental analysis would help them to deal with uncertainties which may arise in the market. The company would be able to gain strength through their strategic planning and marketing strategy which would be in sync with the target audience.
The company would also focus on developing a niche position in the health sector by building a reputed name for it which would help gain competitive and strategic advantage. But during the course of strategy and operational implementation many challenges would have to be dealt with in order to maintain the integrity of the new venture. All this can be achieved with strategic partnerships and focus on marketing and service quality. If the vision is clear and specific then this new venture would be able to gain good market share and a reputed name for itself in this industry.

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