Manstra Case Study Would They Sell or Keep the Business?

Problem

Would they sell or keep the business?

Why do they need to sell? – they are not earning anymore – why are they not earning anymore – old facilities – they didn’t want to add costs – no money – they were not transparent – no record keeping

Strengths

• They are situated in the most marketable real estate in the country
• Brand Name – they have been in the place since 1960s

• Premier hospital in the country’s most populous and popular city

• Region’s notable medical institutions, pioneer of its kind – Pharmacy

Weakness

• Old facilities and equipment
• No transparency in the executive position especially for accounting
• Dilapidated rooms and hallways

Opportunities

• They could take advantage of the growing population

Threats

• New hospitals
• Drugstores

Porter’s 5 Forces

• Threat of new entrants

• High since the capital for hospitals are big

• Bargaining power of buyers

• High since they opt to choose for the better hospital and cheaper one

• Bargaining power of suppliers

• Intensity of Rivalry

• High because of the emergence of other hospitals

• Threat of Substitute Products

• High, other hospitals????

Areas of Consideration

1. The need to upgrade the facilities as more and more doctors are shying away from performing operations in a hospital that has very old facilities/equipment
2. Funds were diverted from the hospital to a private account (that of the former medical director)
3. No proper recording of hospital and pharmacy transaction – no proper accounting or bookkeeping was made to monitor day to day operations and pharmacy sales
4. The hospital’s lack of improvements over the years
5. Old and dilapidated rooms and hallways are gloomy
6. George has to immediately solve these problems before going to the next phase which is? ----
7. Land valuation is now 40x its original book value

ACA