Strategic Management Report: Antediluvian Retirement Home

Executive Summary

This report concerns some of the issues and conflicts facing the Antediluvian Retirement Home, a high-end facility specializing in care for elderly residents. It examines the most pervasive issues afflicting the organization and discusses three possible options that may rectify the bulk of these conflicts. The report then makes a bold recommendation for how the retirement home should best proceed and why. Key Performance Indicators (KPIs) are also discussed, as these changes must succeed in order to ensure the longevity of the home.

Issues Identification

The case study of the Antediluvian Retirement Home plainly states that it has three strategies in place that guide the overall running, day-to-day operations, and general philosophy of the organization: its high-end branding, its attempts to forge sustainability, and its efforts to minimize costs whenever possible in order to increase profitability.

One of the major issues is directly connected to the food delivery system. A tremendous amount of waste is currently occurring because the retirement home offers two options at mealtimes: residents can choose between two prospective entrées. There is rarely an even divide between the meals available and the number of meals ordered, so the kitchen ends up running low on a particular option and must prepare last-minute dishes of that variety. Equally, this results in an excess of food that goes unused — a direct waste of resources. As the case study explains, there is also an increased cost in purchasing fresh fruits and vegetables due to an unfavorable exchange rate, which is causing excess spending of close to half a million dollars per year.

Another issue that permeates the retirement home involves efficiency and safety. This is clearly demonstrated by the problems connected to the storage and retrieval of walkers. The way they are currently stored is cumbersome and inefficient, and also represents a major trip hazard for staff. An additional issue is the home's failure to capitalize on untapped resources. It would be in the best interest of the home to offer more in-house services — such as housekeeping, light reading assistance, and resident visiting — for which patients could be charged, thereby increasing profitability. Finally, the retirement home could reduce costs by assigning dual responsibilities to more staff members. For example, IT technicians who assist residents with computers and internet issues could, where possible, also have a legal or accounting background.

One of the major selling points of this retirement home is that it boasts many impressive outdoor spaces: a rooftop garden, a koi pond garden, and the general exterior grounds. The overall maintenance of these green spaces is handled by three different firms, which leads to excess costs. It also presumably demands considerable time and effort from the administration and accounting departments to manage the separate bills, invoices, and paperwork associated with each contractor.

Environmental and Root Cause Analysis

Many of the issues the retirement home is currently experiencing stem from its identity as an upscale facility. This creates expectations regarding available aesthetics, standards of care, and quality of living — and means the home carries a very steep overhead. A constant number of residents must be maintained to ensure costs are covered and profitability is achieved. As the case study explains, the high-end aesthetic governs much of the organization's decision-making: "This is apparent in features like the green roof, koi garden, library, music room, outside garden, and the trees and hedges. This strategy is in place to attract a certain type of high-end clientele and enable the facility to set prices accordingly. All aesthetics, services and processes must reflect this strategy throughout the organization."

If this is the branding the retirement home has selected, it needs to better capitalize on this aesthetic, as the residents it caters to live in a world rich with alternatives. More distinguishing details — however small — are needed to set this home apart from its competitors. There needs to be a more heightened awareness of which facilities the home directly competes with, and how many clients ultimately transfer to those competitors. The high-end market exists everywhere, and this retirement home must make a more concerted effort to establish itself as a top luxury provider rather than making only a half-attempt at it. The home could fine-tune its strategy to not merely target the high-end market, but to target the luxury market and elevate the bar of professionalism within the elderly care industry. There should be a greater attempt to psychologically develop a luxury experience for all residents — including the adult children who are paying the bills — so that they are moved to purchase additional services, products, and donate extras to the facility, regardless of cost. The "high-end" environment the retirement home has created is not yet doing enough to generate profitability. It keeps costs high and fees high, but the home has far greater potential to charge premium amounts and truly tap into a luxury residential experience.

An additional root cause of many of these issues is the need for greater efficiency and waste minimization. Some measures are already in place — for example, clean ice water that clients do not finish is saved to water the plants. This is a step in the right direction, but such practices need to be expanded significantly in order to achieve a higher level of success and profitability.