Funeral Services Business Strategy: Organizational Recommendations

Introduction: The Changing Funeral Services Landscape

This proposal concerns an often overlooked but fully essential set of services related to funeral arrangements and burial. As the economy changes, so too does this age-old business. As the field evolves, so too must its practitioners. For smaller organizations such as the one with which this proposal is affiliated, there is a pressing need to rethink business strategy and market approach in order to remain financially viable.

The funeral services industry has traditionally been founded on family-oriented enterprises. Funeral homes have typically been owned and operated by succeeding generations within one family, fostering a close relationship between such establishments and their communities. Due to the sensitive nature of the funeral service trade, its practices differ in many ways from those of other profit-driven businesses. Notably, price-based competition is rarely employed as a business model. Another unspoken rule of decorum governing the business is a general abstention from advertising, which most funeral service enterprises observe.

Industry Consolidation and the Rise of Corporate Funeral Services

Since the 1980s, the funeral service industry has taken on a new form. The traditional abstention from competition, combined with the perpetual community need for funeral services, created a circumstance in which many funeral homes were either operating beneath their potential or stretched thin by an oversaturation of business. This atmosphere prompted an industry-wide move toward the consolidation of ownership, with large funeral service corporations assuming a dominant role in attempting to coordinate the world's funeral service industry under common standards of cost-effectiveness.

Such is the environment that gave rise to the "John Doe" funeral services corporation. Its central leadership initiated a business strategy in the mid-1980s centered around acquisition and expansion rather than traditional local market orientation. Over the following decade, the corporation expanded its operations to include funeral homes and cemeteries across the world. This model demonstrates a clear path outside of the traditional single-location, family-owned operation and suggests strong capacity for operational consistency.

Corporate Expansion: Growth, Missteps, and Public Image Damage

John Doe's growth was rapid, and its success in meeting its original vision of constant expansion initially appeared assured. However, evidence suggests the company grew too fast to maintain a constructive path of development. A comparison with its closest competitor, Anonymous Funeral Services, reveals a fundamental error on the part of John Doe's leadership. The rapid increase in the company's holdings recognized only the potential for profitability from expansion. It did not tailor its acquisition strategy to integrate new holdings into a broader corporate culture, instead leaving them as disparate and decentralized strands of the company. This fell short of the industry-directed impetus to coordinate acquisitions in meeting standards of cost-effectiveness.

Another issue — one which shareholders expressed succinctly when they forced a change in leadership in the late 1990s — was the company's public image. Some insiders believe the corporation never recovered from a mid-1990s public relations crisis that created an impression of John Doe as conducting unfair business practices and using ethnic and racial identifiers to maintain a selective demographic. This was especially damaging to the corporation's standing in many local communities.