- CONVERTING MUTCHMOR LODGE TO DAY CARE:
The other option after renovating is to convert the old age home to day care as the organizationhas rented to YCWA before and increasedits revenue by $72000. But the risk is that YCWA will rent the further place or not depending upon the demand for daycare.
- PROMOTE BUSINESS:
The organization should take some marketing steps and target low income residents. Apart from that, UCHC should also focus on fund raising activities at their church to curb its losses and facilitate its operational expense.
- MANAGE STAFF EFFICIENTLY AND REDUCE COST:
The Wascana Wing is running on high expenses with 76% occupancy rate. Staff should be managed. Downsizing of staff is an option as the occupancy rate are low but the risk of downsizing is that, the organization can face legal challenge. If we eliminate the laundry expense it will cut expense by 22.6% but seniors will want these services and this action will reduce the organizations reputation in market.
I would recommend the organization to implement Action no. 1 which is to improve service quality and renovate old property. Renovation could be done efficiently using government subsidies and grants by government which will be a onetime cost. I found this option to be more beneficial for the organization which will turn the losses near to break-even point. The average service quality per resident is $808 monthly and average rent is roughly $2200 monthly. If the service quality is increased to $1100 monthly and occupancy rate is increased to 100 from 80 then total income through rent, after deducting increased quality expense will be $80815 yearly (see exhibit 1). This increase in income will cut the losses by $80815 and will further improve the chances of increased occupancy rate. Later on organization could further increase their rent to increase their profitability and after 2 years organization could reach close to break-even point.
This exhibit shows if we increase service cost to 1100 and residents increase to 100 from 80 then the income after reducing service cost will increase by $80815 annually.
|Yearly increase in service cost of 100 residents if increased by $291.85||yearly increase in revenue – service cost, if occupancy rate increase by 20 residents||Increase in income after reducing cost|
1. As one of the oldest company UCHC is it has good reputation.
2. UCHC is known for maintaining their quality.
3. It is located on prime location.
1. Organization can increase price without losing residents because of reputation.
2. Brand promotion could attract low income residents.
3. Service quality can increase residents and income.
4. A portion can be converted to Daycare Centre.
1. Low unit space.
2. Obsolete buildings
3. Room for improvement in dietary service quality
4. No corporate governance and marketing activities.
1. New entrant entered in market.
2. New competitors possess new buildings with large unit space.
This exhibit shows that the company has opportunity to enhance its quality by providing different categories of services such as dietary, tenants care and activities…………….
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