mario mouraz - business plan - oldcare gerontological services - eada 2010 - hmu1 final project

7/31/2019 Mario Mouraz - Business Plan - Oldcare Gerontological Services - Eada 2010 - Hmu1 Final Project

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BUSINESS PLANBUSINESS PLAN

OLDCARE GERONTOLOGICALOLDCARE GERONTOLOGICALSERVICESSERVICES

MRIO MOURAZ SANTOSMRIO MOURAZ SANTOS

INTERNATIONAL MASTER IN HOSPITALITY MANAGEMENT HMU1INTERNATIONAL MASTER IN HOSPITALITY MANAGEMENT HMU1


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EADA - JULY 2010EADA - JULY 2010

TABLE OF CONTENTSTABLE OF CONTENTS

Page

1. Objectives of the Business Plan 2

2. Executive Summary 3

3. Analysis of the idea and the business opportunity 5

4. Presentation of the company and development team 7

5. External Analysis 14

6. Internal Analysis 18

7. Research & Development & Innovation 27

8. Agreements, alliances and Outsourcing 30

9. Expansion Plan 31

10. Marketing Plan 34

11. Quality Management 50

12. Financial Plan 53

13. Conclusion 56

14. Bibliography 57

15. Acknowledgments 58

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11. OBJECTIVES OF THE BUSINESS PLAN. OBJECTIVES OF THE BUSINESS PLAN

This creation of this business plan is an attempt to put in practice the knowledge

I got during this year through the Master in Hospitality Management. For this

reason, I introduce different topics from diverse subjects as Quality, Expansion,

Human Resources, Finance, Strategic Management, Marketing, Operations, etc.

Besides that, and equally important, it was my intention to create a business

plan focus on the part of the Expansion and Marketing for an existing company

back in Portugal called OldCare, which I have been following even since it was a

project and then when they turn out into a real company.

One year later here it is that company trying to grow as a result of their past and

present success trying to find new ways of growing. Therefore, this business

plan is an attempt to give my contribution and to help OldCare in their further

grow and hopefully many years of success.

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2. EXECUTIVE SUMMARY2. EXECUTIVE SUMMARY

OldCare Gerontological Services is a company that provides gerontologicalservices for elder people with his headquarters in the city of Bragana, Portugal,

who operates in the northeast territory of Portugal.

OldCare is composed by a team of professionals specialized in aging, with

academic background in health technologies, where they studied and developed

an adequate and customized response to the needs of the elder population.

They provide all kinds of personalized gerontological services supported in

principles as promotion for the Health, Active Aging, Autonomy and Quality ofLife. They also sell geriatric furniture and equipments as technical aids for the

senior population. Furthermore, they give training and provide formation in

various topics in the area of health. Their work philosophy is based on keeping

the elder in their home environment.

OldCare came out from an academic project that was then presented in an

entrepreneurship programme, being one of the winners. Since then the project

started obtaining power and it became a reality in December 2008. Thecompany started operating in July 2009 and it completed already his successful

first year with revenues of more than 30.000.

In order to better assist the elders in their overall needs, they are all the time

developing strategic alliances with complementary companies. Besides, they are

linked to the academic environment so that they can take advantage of

scientific studies and research to develop new solutions that demonstrate

improvements in quality of life for this growing population in Portugal.

They believe that by differentiating their services, they can gain a competitive

advantage in such a competitive market and they have also been quite

successful in keeping their costs low, since their collaborators (all specialized in

aging and health) came from the universities at a low cost.

Right now, OldCare is looking for all types of partners (financial, consulting, etc)

to expand to the all North region of Portugal.

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This business plan was created to help this company in achieving that goal, by

formulating an expansion and marketing plan as I strongly believe OldCare can

grow further if some strategic changes and methodologies are implemented.

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3.3. ANALYSIS OF THE IDEA AND THE BUSINESS OPPORTUNITYANALYSIS OF THE IDEA AND THE BUSINESS OPPORTUNITY

It is a reality, that in about a decade, 30% of the Portuguese population will be

65 years older. We are assisting to an exponential increase in the number of old

and less active people as population in getting old and the average life

expectancy is increasing. One of the causes of this phenomenon is the health

conditions that are in general much better than some years ago. The big

problem comes because Portugal doesnt have proper socials structures and

there is a lack of professionals to care about this entire people that are getting

older.

People are becoming more aware of the importance of creatinghealth funds in

order to guarantee their quality of life after an entire life of work, after

retirement. Besides that, health consciousness is changing and there are each

time more people looking for quality services.

Related to these facts is the increasing awareness of the term Gerontology in

Portugal. Gerontology is the science that studies the process of aging in fourdifferent aspects: physiological, psychological, social and cultural. This concept

has been around in some European countries and United States for more than

30 years, but it just came to Portugal a couple of years ago.

A new trend that gerontological industry has to take into consideration is that

nowadays, elder people and their families are looking more and more for

someone who can take care of the elders in their homes, someone who can be

responsible for the elders in a personal level by doing their food, washing theirclothes, taking care of their personal hygiene, skin and hair care, helping them

dress, maintaining the house or doing small structural arrangements, etc. Pulling

out those elders from their homes and throwing them to Elderly Residences is a

reality that soon will be over because those residences are completely full and

queued. Besides, it is also important for Portuguese society to keep relations

inside the family and avoid the break between the elder and his family.

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4. PRESENTATION OF THE COMPANY AND DEVELOPMENT TEAM. PRESENTATION OF THE COMPANY AND DEVELOPMENT TEAM

OldCare Gerontological Services is a company that provides gerontological

services for the elder population, located in the center of Bragana and

operating in the Northeast territory of Portugal.

It is composed by a team of professionals, all specializing in aging, with

academic background in health technologies, where they studied and developed

an adequate and customized response to the needs of senior citizens.

What do they do?

They provide all kinds of personalized Gerontological Services supported in

principle as promotion for the Health, Active Aging, Autonomy and Quality of

Life. They offer a personal page for each client on their website, with information

updated on a daily basis for the family who are distant can be aware of day-to-

day of their loved one.

They also offer a set of complementary services as sale of technical aids

equipments and geriatric furniture for the senior population, consulting services

related to health care structures for the elderly population and training plans.

Location and Facilities

Their work philosophy is based on keeping the elder in their home environment.

For that reason they have an extensive logistical assistance to the household

extended to the Northeast region of Portugal. Their headquarters are located in

the city center of Bragana.

They have in their headquarters multipurpose room where they can either give

training, provide group sessions of psychic and physical intervention, geriatric

physiotherapy and rehabilitation or even leisure activities and entertainment.

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History of the company

The OldCare came out in 2007 as a result of an academic project. It was then

developed within the 5th Poliempreende Program to encourage

entrepreneurship in Bragana Polytechnic Institute (IPB).

The project was then presented to the competition and was one of the winners.

Since then, together with the Center for Entrepreneurship of IPB, it developed

structurally to become a reality in the District of Bragana.

OldCare is a pioneer in the use and development of the name gerontological

services.

They base themselves in the Study of the Aging to provide a customized

response tailored to the needs of senior population.

They develop strategic alliances in order to better assist the elders in their

overall needs and they are linked to the academic environment so that they can

take advantage of scientific studies and research to develop new solutions that

demonstrate improvements in quality of life for this growing population in

Portugal.

Mission

OldCare's mission is to promote the value of the senior person.

Avoid breaking the bonds of affection with the family and socio-cultural

environment by providing home services of reference, with quality and

personalization that meets the needs of this population;

Provide information to approach the familiars more distant;

Create partnerships with the society, so that service delivery is the most

customized and complete as possible, so that the person may also feel

involved and integrated socially;

Their shared values are Integrity, Quality, Excellent Customer Service,

Research and Innovation, Self-Esteem, Active Aging, Autonomy, Quality of

life and Social responsibility.

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Vision

Being the market leader for the region of Trs-os-Montes

Provide a service of quality;

Promote customer loyalty;

Working under a multidisciplinary perspective, Biological, Psychological

and Social person, where the health and welfare, are allied to the

autonomy and development in society;

Propose and develop innovative solutions for a Healthy and Active Agingin the family environment;

Create a cohesive team work and high motivation;

Promoting the expansion of services to the Northern of Portugal and to

close Spanish cities.

Objectives

Provide a service of excellence;

Achieving the full satisfaction of their customers;

Involve their employees in their philosophy and mission;

Create and develop new solutions that improve the quality of the services

provided;

Be innovative in the Gerontology context;

Use data collected in scientific studies that have proven their importance

in the improvement of our services.

Corporate Strategy

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Their strategy is characterized by the intention to keep expanding to other cities

within the north region of Portugal, maintaining the same philosophy and

identity with the first base of the company.

The opening of new bases with the same services and capacity will give themthe opportunity to keep focusing on their mission concerning the part of giving a

very personalized service to their customers.

Target market

Their target market is people sixty five years older with support needs on a

personal level but not in total dependence.

OldCare Philosophy

The philosophy of OldCare is to provide customers with an excellent service in

an extensive logistics operation, ensuring that the service provided by the

Company complies with the following objectives:

Be fast, flexible and open on the first visit to the customer;

To offer a service tailored to the needs of each client available 24 hours a

day;

Create intervention and care plans through scientific principles;

Ensure competitive prices;

Simplifying the logistics of the service, widening the area of action inorder to minimize operating costs;

Provide a working team with scientific, academic and technical knowledge

in health and aging.

OldCare believes that their greatest asset is its staff, being these ones essentials

to ensure the commitments with customers. For that reason, OldCare gives

particular importance not only to the recruitment and selection processes but as

well the procedures for training their employees.

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The ability, behaviour, engagement and performance of their employees are

crucial to the quality of service and the achievement of their Personal

Appreciation Plan, which is focus on improving competitiveness by improving

working methods, knowledge of the client and of their needs.

Services

Domiciliary Service Someone who takes care of the elder personal

hygiene, helps in dress, in the displacements, in skin care, hair, among

others. Meal preparation or choice from a menu. Treatment of clothing.

Sanitation and light housekeeping, and still providing small structural

arrangements.

Attendance - Hospital and pos-hospital stays, medical appointments,

displacements and more diverse.

Old-Sitting Having someone for a specific situation to monitoring.

Psychic and Physical Intervention - Stimulate the mind through

cognitive training, developing and using sets of exercises suitable for

each case. Stimulating the body through physical training and mobility.

These are two essential ingredients for a healthy active aging, and for an

exponential increase in the autonomy of the person.

Leisure Activities, Entertainment and Free-times - Occupy elders

free times constructively and objectively implies a detailed assessment of

the person. That requires a positive interaction in the discovery of tastes

and expressed or implied skills. Develop a life project whose aim is a

better integration into the community, and increased self-esteem and

self-realization.

Nursing A partnership with the Nursing Clinic Brigantina allow them to

provide nursing services as palliative care, among others specialties. Thus

they want to ensure always the best quality of their services, working with

experienced professionals who already have a broad background in the

market.

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Geriatric Physiotherapy and Rehabilitation - They provide

physiotherapy services in the customer's home, when under the

circumstances this is the most comfortable way to improve their welfare,

their recovery and their quality of life. The geriatric rehabilitation is a

crucial element in the recovery from falls, strokes, loss of mobility and

muscular dexterity, facts that can and should be countered with the

purpose of recovering the maximum possible the autonomy of the elder.

Telemedicine Service - Tele-assistance with choice of location via GPS.

All information is transmitted to a 24-hour-Call-Center connected to a

database where the patient medical history is recorded. Other medical

devices can be provided as well.

Elimination of Architectural Barriers Supplying options for both

private houses and public areas to remove architectural barriers, to

assure that people with mobility limitations can move freely and safety.

Sale and Rental of Geriatric Furniture - Adapted furniture, with the

possibility of repurchase the equipment after two years of use.

Bio-Healthy Geriatric Parks - Sale of equipment that promotes the

physical activity of low-effort, for indoors and outdoors.

Consultancy Service - Consultancy and advice for planning and

projection of structures related with responses aimed at serving the

senior community.

Training and Formation Certified technical training for the sector

related to aging for either formal or informal caregivers, employees,

directors of institutions or family members of the elders.

Presentation of the entrepreneur and development team

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The owner and CEO of the OldCare Gerontological Services is Master in Health

Services Management from the University of Trs-os-Montes and Alto Douro

(UTAD) and graduated in Gerontology at the School of Health Sciences,

Polytechnic Institute of Bragana (IPB).

The team is composed by a group of professionals specialized in aging, with

academic backgrounds in the area of Health Technologies, where they study and

develop everyday an appropriate and customized response to the needs of the

elder population.

Organizational Chart

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TECHNICALTECHNICALDIRECTIONDIRECTION

PHYSIOTERAPISTPHYSIOTERAPISTGERONTOLOGISTGERONTOLOGIST

SSAUXILIARSAUXILIARS

NURSING CLINICNURSING CLINIC


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55. EXTERNAL ANALYSIS. EXTERNAL ANALYSIS

The PESTEL Analysis is the first measurement tool used to analyze the macrofactors from the external environment that can influence a business. For that

reason it is important to do a detailed analysis by type of factors, including

political, economical, social, technological and more recent environmental and

legal.

Thus I found the following factors for Portugal:

Political factors:

Political stability in the country;

Lowest crime rate in Europe;

Tax system (increase of tax payment in 2010);

Less administrative bureaucracy.

Economical factors:

Economic recession less income of families and consequently morehaggling;

Less access to bank credit;

Increasing number of competitors in the market;

High level of unemployment (11%); Dirio de Notcias

Less support from entrepreneurship organizations;

Distrust of investors.

Social factors:

Portugal is a peaceful retirement destination;

High quality of life;

Big social tradition of wine producing;

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Very High Human Development Index (wealth, education, average lifeexpectancy);

Literacy - 94,9% of population; Wikipedia

Average life expectancy - 78.1 years; Demographic aging - 17.4% population were 65+ years old in 2009;

Life styles changes;

Increase of health consciousness;

Lack of a proper social support structures for elderly people;

Population growth stands at 0.305%;

84.5% of total population are Catholics;

Portugal have about 10,3 million habitants;

Bragana 148,808 habitants 1.4% of total population;

25% of the population is covered by health systems;

3,3 million habitants with internet access;

Most famous social magazines in Portugal Caras, Lux, VIP e Flash;

Family is the foundation of the social structure;

Portugueses are traditional and conservative;

Relationship-based culture;

Low tolerance for change and risk - difficult to implement innovationswithout previous track record or history;

% of elderly population in urban areas (44%) intermediate (23%) and ruralareas (33%).

Technological factors:

Lack of specialized professionals in the gerontological industry;

First gerontologists in the market came out 3 years ago;

Increasing awareness of green technologies;

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Environmental factors:

New regulations;

Legal factors:

Less bureaucracy in administrative processes - easier to createcompanies or to sign agreements;

Social Security supervises private institutions OldCare for example.

PORTERS 5 FORCES MODEL

In order to further analyze the competition in the market, it was used the

Porters Five Forces Model analysis.

Suppliers

OldCare has close relations with their suppliers and in general they can get

cheaper prices. Unfortunately, they still depend too much on suppliers to maketheir business profit as the biggest proportion of revenue comes from the sale of

geriatric equipment and technical aids.

Due to this stated reason, I can conclude that the bargaining power of suppliers

is high. However, expecting other partnerships and other suppliers contracts in

the near future, it may lead to a decrease of OldCare dependence on their prices

and their power.

Customers

The bargaining power of our customers is by far the most important factor for

the success of OldCares business. As customers have a diversity of places to

choose from, I can conclude that they have high bargaining power. Thus, it is

extremely important for OldCare to differentiate itself from the rest by offering

flexible services. That means OldCare never says NO to a client and customers

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will always try to negotiate the prices and conditions, even more in times of

crisis, as they are more price sensitive. The service always depends on what the

clients want. By time, we expect the customer bargaining power to decrease.

Substitutes

Within possible substitutes companies in the area I have considered all the

others Home Support Service Companies or Domiciliary Services and IPSSs.

There are many options here for the customer and the threat of substitute

products is consequently high. Even being a different concept, IPSSs are

increasing their number and express a big power. The power from substitute

services is definitively huge, at least until OldCares can make obvious theirdifferences to the market and in the mind of customers.

New players

Threat of new entrants is always high. First of all, OldCare is relatively new in the

market and has not obtained yet big recognition, which means that they still

arent making use of the differentiation to really obtain competitive advantageover their competitors.

Furthermore the capital investment to create a similar concept is relatively low,

depending of course on many factors as size, services or products, location,

team, etc. It is a quite easy industry to enter.

To conclude, I assume that since as this is the type of business with a constant

grow and with a huge potential to grow, a lot of players will continue getting in,

however new players are aware of the high competence that already exists.

The exit barrier for OldCare would be around 500 every month until 3 years, in

order to pay for the lost funds of the Government and to get rid from the

vehicles the company possess, plus the compensation salaries to their

employees.

Rivalry

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Although there is already a huge competitiveness among Gerontological

services providers due to the high number and the wide range available,

OldCare have a unique concept consequently there are no direct competitors.

66..INTERNAL ANALYSISINTERNAL ANALYSIS

COMPETITIVE ADVANTAGE MODEL OF PORTER

According to the Competitive Advantage Model of Porter, a competitive strategy

takes offensive action to create a defendable position in an industry in order to

cope successfully with competitive forces and generate a superior Return on

Investment.

OldCare consider as their main competitive advantage - differentiation.

Achieving of differentiation means that a company seeks to be unique in its

industry along some dimensions, that are widely appreciated by buyers. A

differentiator cannot ignore its cost position. In all areas, that do not affect itsdifferentiation, it should try to decrease cost; in the differentiation area, the

costs should at least be lower than the price premium it receives from the

buyers.

Areas of differentiation can be: service, distribution, sales, marketing, product,

know-how, performance, image, etc. For this moment OldCare concept is

unique in Bragana and Northeast region of Portugal and they differentiate

themselves by the service they offer and their know-how.

But because not every difference is significant, it must be established to meet

the following criteria:

Importance: offers added value to the client;

Highlight: is outstandingly offered;

Superiority: is superior to other ways of getting the same benefit;

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Exclusivity: cannot be easily copied by competitors;

Accessibility: The buyer must be able to pay for it;

Profitability: it must be profitable for the company.

Today theres a medium high competition level among such providers of

Gerontological services in Bragana and Northeast region of Portugal. OldCare

must make use of their main competitive advantage by offering such kind of

service that could be recognized as unique in its thematic.

SWOT ANALYSIS

Strengths:

Flexibility;

Diverse revenue streams;

Personal experience and know-how;

Increasing demand and sustainable answer;

Research&Development of new solutions;

Relation with suppliers and local authorities;

Partnerships with MOLAFLEX and HARTMANN;

Portfolio of products for sale;

Connection to the academic world;

Motivation and entrepreneur spirit of the team;

Low operational costs;

Weaknesses:

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No standard procedures;

Brand awareness;

Stuck capital in the sales of equipment;

High turnover of collaborators.

Opportunities:

Quality certification;

New alliances and partnerships;

Creation of new services;

Get new collaborators with complementary competencies;

Better communication and promotion;

Expansion for new markets;

Enlarge the profits margin.

Threats:

Increasing number of competitors;

Simple logistics and distributions plans.

BCG MATRIX (BOSTON CONSULTING GROUP)

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Fig. 1 - Market Growth-Market Share MatrixThe BCG matrix relates to marketing. It is a simple tool for analyzing companys

business portfolio in their product life cycle. This model allowed me to prioritizewhich products/services within the company product mix get more financial

support and attention.

The BCG model is based on classification of products into four categories, based

on combinations of market growth and market share, relative to the largest

competitor.

Each product has its product life cycle and each stage in product's life-cycle

represents a different profile of risk and return. In general, a company shouldmaintain a balanced portfolio of products. Having a balanced product portfolio

includes both high-growth products as well as low-growth products.

In OldCares case the set of services are all in the Question Marks phase, i.e.,

with high growth but low market share. Thats ok as the company is quite young

and the services are not yet well establish in the customers mind. OldCares

services have to be further discover by potential clients. The marketing strategy

settled on this marketing plan is to make market adopting OldCares services. Iwant this marketing plan to be able to increase the market share and

consequently increasing returns.

If the services dont increase their market share quickly they may turn into to

Dogs phase. Therefore, the best way to handle question marks services is to

either invest heavily in them to gain market share, to sell them, or to make a

partnership with a company that has their services on the Stars phase or a

Cash-Cow. A company in the Cash-Cow phase seems to be a good option to

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make a partnership with as they usually have a solid position in the market,

generating lots of cash-flows but they have a lack of innovation which can

translate in their failure and eventually became a Dog. For that reason OldCare

can take advantage of their innovative services and creative team by allying

their services with a Cash-Cow company by complementing each other, one

providing fresh knowledge and innovative solutions, the other providing

promotion channels, infrastructures and eventually capital.

GREINER GROWTH MODEL

Fig. 2 Different organization development phases

Greiner's Growth Model is used to analyze organization development.

It describes phases that organizations go through as they grow. Each growth

phase is made up of a period of relatively stable growth, followed by a "crisis"

when a major organizational change is needed if the company wants to continue

growing.

OldCare is in the creativity phase as they still are reacting to the feedback of

the market to settle their services. It is characteristic from this phase that a

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company constantly needs to add new employees. Management is focus on

make & sell, the organization structure is informal, entrepreneur actions take

place, no reports or written standards are produced, there is not a cost center

and communication inside the organization is frequent and straight.

This model is useful to predict and eventually prepare a company for what is

going to happen in the future if continue to grow is the choice. Because of this

reason I predict OldCares first and next crisis will be the leadership crisis. The

word "crisis" is nothing less than a "turning point. OldCare may prepare itself to

convert in a functional organization, where an accounting system is needed,

new IT systems, new people, manufacturing procedures, and the most

important, centralized direction where professional management is needed. The

founders may change their style and take on this role, but often someone new

will be brought in.

VALUE CHAIN ANALYSIS

The production of a good or service consists of a chain of activities, each one

with a different cost structure determined by different cost drivers. This added

value line of production can be called Value Chain.

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The value chain analysis not only helped me to think how does each activity

benefits the customer as it allowed me to settled OldCares main and secondary

services and activities and to define in which activity OldCare can pursue

competitive advantage. That allowed me to conclude that the biggest

competitive advantage of OldCare is differentiation. The activities considered to

give major differentiation to OldCare are Innovation & Development of new

services, which create new approaches and new solutions for a healthy and

autonomous aging of the population and the services of domiciliary service and

rehabilitation, which are only provided by specialists in health technologies with

training in aging.

It is very important in the current competitive business environment to identify

separate activities of the value chain. Identifying the appropriate activities is a

matter of judgment. It requires understanding the chain of processes involved in

the transformation of inputs into outputs and its delivery to the customer.

After this phase we should be prepared to define the contribution of each

activity to the total cost of a service by identifying the cost drivers and then

looking for cost-cutting opportunities.

Primary activities:

The group of services Domiciliary Service, Geriatric Rehabilitation,

Sales of geriatric Equipment and Physiotherapy represents the services

that produce more revenues for OldCare, even though domiciliary service

is the core business of the company.

Innovation and Development as differentiation is OldCare main

competitive advantage, they need to devote resources, which includes

time, people and money, to think and create new solutions to solve the

problems related to the aging.

Marketing and Sales - will be the promotion, advertising, distribution and

communication of OldCares image and brand.

Post-Service - developing and supporting customer service.

Support activities:

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Global Management and Human Resources- The daily basis management

of the company, the activities associated with recruiting, development

and training of employees, retention and compensation of employees and

managers, learning process, training supporting customer service and

excellence, maintaining OldCares philosophy.

For suppliers or inbound logistic I am referring to purchasing from

suppliers: geriatric equipment, technical aids and either food & beverage

for the domiciliary service. It also includes finding the best suppliers in

terms of quality and price or retaining the existing ones and finding the

best communication channels for OldCares promotion.

Firm Infrastructure includes planning management, legal, finance,accounting, public affairs, quality management, improving or renovating

infrastructure.

Formation or Training, Old-Sitting, Telemedicine, Consultancy are all the

other services provided by OldCare that are not core-services, i.e., where

the company invests more resources as time, money and people to

produce the service.

By Relations with Public Institutions I mean contacting with Town Halls,

3Age universities, organizations or even other Institutions whose activity

is related with the elderly to find potential partnerships, strategic

alliances or other type of agreements that could bring benefits to the

company.

VALUE CURVE MODEL

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Fig. 3 Value Proposition identification - Comparison with main competitors in the District of Bragana,Portugal (July 2010)

In an increasingly competitive environment, managers face the challenge of

finding ways to differentiate their services. As markets progress over time, theysplit into multiple segments and it can be difficult to determine which factors are

of most importance to customers.

The Value Curve Model uses a diagram to compare services on a range of

factors by rating them on a scale from low to high. These can be features,

benefits or ways in which a product is distributed or consumed. The combination

of these various factors defines the service. In the end of an analysis to the

Value Curve Model we must be able to find out which is the value proposition ofthe company.

Thus, I discovered that the value proposition of OldCares global services is

Quality, Flexibility, Customization and innovation. Right after, what is necessary

to do, is to put ourselves the questions: Will customers want this? Can we afford

this?; and then identify possible gaps in our value proposition and then make

changes in our service that considerably change our value preposition to

continually better adapt to what customers need and want.

Due to the fact that OldCare is a quite young company, the brand awareness

that have in the market is still unsatisfactory. It is expected changes in this level

as OldCare is going to expand to new markets and as a result, more publicity

and promotion will be made and consequently the brand awareness is expected

to increase. Other factor that OldCare needs to review is the capacity or number

of clients they can work with. For now, the number is small when compared with

other possibilities of domiciliary service or other substitute services. Once again,this point is expected to increase during the expansion, but in general the

number of clients they can handle is slightly inferior to competitors and this

situation could be rethought or it may cause future problems.

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77. R&D&I. R&D&I

As it was explained before differentiation is the main competitive advantage of

OldCare. For that reason they consider that by investing time and resources in

Research & Development they can find innovative solutions related with healthy

aging, which can bring added value to the existing services by complementing

them.

A brand new solution being developed by OldCare is the OldCare TeleSupport

Service.

The purpose of this innovative solution is to provide an excellent service to elder

citizens by making the domiciliary service more simple and accessible to the

needs of each family, through competitive prices. Basically, through a phone call

to the head offices in Bragana, or directly to the health technicians of each

operational area, they will take to the clients home a qualified professional to

carry out an assessment visit to evaluate and design the best plan of care and

assistance that complements the geriatric necessities of the customer.

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88. AGREEMENTS, ALLIANCES AND OUTSOURCING. AGREEMENTS, ALLIANCES AND OUTSOURCING

OldCare has some partnerships and strategic alliances with other companiesthat in on the whole make the value proposition of OldCare more interesting.

They have a strategic alliance with a Nursing Clinic who provides between

others palliative services to the clients of OldCare. They are a team of

professionals with competencies in this field that OldCare opted to Outsource as

it is not their main competencies.

Besides that, OldCare establish some partnerships of commissions with certain

companies, in which OldCare either receives commission for the sell, cheaper

prices or OldCare can use their logos to promote both companies together. As

they are all companies with relative brand awareness it makes OldCare name

more visible to the market in general. The referred companies and its average %

of profit to OldCare is described in the following image:

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Fig. 4 Agreements and Partnerships of OldCare.

99. EXPANSION PLAN. EXPANSION PLAN

OldCare aims to create a shaft support in the entire area in the North territory of

Portugal which would include main cities as Guarda, Porto, Aveiro, Vila Real and

Braga plus the current one which is Bragana.

Each of these five cities would be someone responsible, that for the case could

correspond to the existing professionals of OldCare, which would produce the

work of technical director of one operational center and be the commercial of

OldCare in that same area.

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Those people would have the task of representing OldCare brand, promoting and

communicating the company to potential target customers, such as nursing

homes, pharmacies, Parish Councils, Municipal Councils and Community in

general, and be responsible for the creation of a Client Database on its

operational area, and its surrounding areas.

Each new operational center director would be as well responsible for doing

research on statistics, on existing companies and social responses for the

elderly, finding contacts and new agreements, in order to have a better image of

the needs of the population in each area, and then procedure to the settlement

of the most appropriate services to deliver on that area.

In collaboration with local authorities, it may be possible to organize free health

screening and formations for the community so as to promote the company, its

services and specially the domiciliary service.

Current Intervention Area

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Fig. 5 - Current Intervention rea district of Bragana

Right now the intervention area where OldCare is operating includes Bragana,Miranda do Douro, Mogadouro, Torre de Moncorvo, Mirandela, Vinhais, Macedo

de Cavaleiros and Vila Flor.

Expansion Plan Proposal

Fig. 6 - Plan of Expansion Operational areas of Vila Real, Porto, Aveiro and

Guarda.

The expansion plan suggests four new Operational Areas which includes all the

bigger cities from the North territory of Portugal which in turn represents the

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biggest focus of elder population and for that reason should be the place to

invest. The expansion plan would have the following dimension:

OC2 Vila Pouca de Aguiar, Chaves, Amarante, Marco de Canaveses andLamego;

OC3-Porto, Matosinhos, Maia, Santo Tirso, Guimares, Braga, Barcelos,Esposende, Vila do Conde, Viana do Castelo e Pvoa de Varzim;

OC4- Moimenta da Beira, Viseu, Mangualde, Celorico, Trancoso and Guarda;

OC5- Aveiro, lhavo, gueda, Albergaria-a-velha, Estarreja, Oliveira de Azemis,Ovar and Santa Maria da Feira.

Development Team Proposal

OC1 BRAGANA (Mrcio Vara Health Services Manager andGerontologist);

BRAGANA (Joo Matos Expert in Clinical Analysis and PublicHealth);

OC2 VILA REAL (Diogo Tristo Gerontologist);

OC3 PVOA DE VARZIM (Patrcia Correia Nurse);

OC4 GUARDA (Ludovina Marques Gerontologist).

OC5 AVEIRO (Someone exterior to the company that would have to be

hired) I believe it wouldnt be difficult to find someone to became

responsible for the OC5 as Aveiro is another city in Portugal where

Gerontologists are being trained, as well as Bragana.

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Implementation Typologies for the Operational Centres (OCs)

WHAT OBJECTIVES WHO HOW

DOMICILIARY

SERVICE

Communicate andprovide thedomiciliary service inOCs without creationof a fix office, just visitand evaluation in theclients home;

Finding collaborators.

65+years

Free healthscreenings for thecommunity;

Communication inlocal media;

Appointing evaluationdomiciliary visitsaccording to the

headquartersavailability.

TECHNICALAIDS

&

GERIATRICEQUIP.

Create a clientdatabase;

Find at least twopotencial clients everymonth.

ElderlyResidences,IPPSs orprivatesonsumers.

Face contact;

Catalogs;

Web tools.

TRAINING

Create a client

database;

Sell at least one formonth;

Elderly care

institutions,families,

community

Presentation of

training plans;

Local media, socialmedia.

BIO-HEALTHYGERIATRICPARKS

Sell one park in eachtwo months;

Partnershipspublic-private

betweenmunicipalities

and IPSSs

Face contact and bycatalog;

NURSINGSERVICES

(Exclusive inOC3)

Communicate thenursing service for thedomiciliary servicethrough their own 24hphone line;

Community

Health Screenings;

Agreements;

CommunicationChannels;

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Success keys for expansion:

Careful recruitment of employees with compatible values in order to

create a excellent operational team; Good management work in innovating job tasks and organizational

structure;

Motivate employees by letting them cooperate in company decisions;

Stimulate the sense of common objectives;

Create a fair and pleasant work environment;

Promote effective communication inside the company;

Constant development of the professionals through internal formationsand training;

Clarify working processes, duties and responsibilities;

Know when to delegate;

Create motivating objectives;

Offer competitive salaries or compensate with other benefits;

Create incentive packages to employees;

Be updated on new practices, new solutions, new competitors and newpotential clients.

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Service, Sale and Rental of Geriatric Furniture, Bio-Healthy Geriatric Parks,

Consultancy Service, Training and Formation.

It is possible for the customer to request an evaluation visit from an OldCare

Gerontogist where both will design the best plan of care and assistance thatcomplements the necessities of the customer.

The image customers have of OldCare is of an innovative company, trustful and

with very accessible prices.

OldCare positions itself as a flexible provider of quality and customized

gerontological services. They always try to say yes to everyone but never say

no to nobody.

9.3.2. - Pricing policy: price formation, sales conditions

The price charged for the domiciliary service is slightly below the average of the

district of Bragana.

Although there is a price list of the services, the prices of follow-up plans and

their consequent actions are almost all the times negotiated between the client

and the company as the nature of treatments and services provides are very

personalized and depends on the distance to the head offices.

The price of sale of geriatric equipment is fixed but the rental conditions can be

negotiated according to the time of use(less or more than 1 year) and type of

equipments.

9.3.3. Promotion and communication policy: market coverage,

promotion channels, image put across, total financial volume

The awareness of company is done by word-of-mouth and the promotion of the

name OldCare is being done in some regional newspapers. They distribute

flyers in institutions of the area such as hospitals, associations, medical centres,

etc.

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They have their own internet website and they are still present in the social

media tool facebook.

Besides that, the name OldCare can be suggested due to the fact of some SAs

made with companies of the area.

The company expects to launch soon a promotional campaign in a free

publishing journal that is present in the north region of Portugal, namely the in

the districts of Bragana, Vila Real, Guarda e Braga.

They are preparing a bimonthly newsletter that is going to be sent by email to

the database of the company which should be updated all the time with the

clients folder of each collaborator.

They are also thinking in creating health screenings for the population together

with local authorities with the objective of promoting themselves in a

personalized way next to their target clients and at the same time by promoting

the social responsibility of the company.

Although OldCare has been investing from 5% to 10% of their sales to invest in

publicity, it is my opinion that so far the effort being made to promote OldCares

brand and services outside is very limited and thats why theres not that manymarket coverage and consequently the image put across could have been even

more powerful.

9.4. EXTERNAL ANALYSIS

9.4.1 Market Analysis

9.4.1.1. Size and development

The size of the potential market is very big and optimistic. According to the fact

that OldCare offers a wide range of services, there is a possibility of attracting

different customers and not just one narrow type of client.

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In addition to that it is possible to create and develop new strategic alliances

with other companies which can provide us complementary services and bring

even more different customers.

9.4.1.2. Seasonality

This type of business isnt influenced by a high degree of seasonality. The nature

of the business is resulting in relatively fix structure of sales and costs through

all the year.

9.4.1.3. Decision making process

The customers are making their decision to choose OldCares services

depending on the flexibility of the services and their prices.

9.4.1.4. Trends

In the next decade about 30% of the Portuguese population will be 65+ years.

As the people are getting older and fewer children are born we are assisting to a

demographic aging of the population. Consequently the average life expectancy

(ALE) is increasing.

People are becoming more aware of the importance of creating retirement and

health funds in order to guarantee their quality of life after an entire life of work,

after retirement. Health consciousness is changing.

Definitively Portugal needs to adapt their social structures to respond to this

increasing number of elders. Right now there are a lot of elders waiting for

getting in elderly residences where in general the conditions are miserable, and

theres a lack of trained people and specialists to take care of this segment of

the population.

A new trend that gerontological industry has to take into consideration is the

fact that old people and their families nowadays are looking more and more for

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someone who can take care of the elders in their homes, someone who can be

responsible for the elders in a personal level by doing their food, washing their

clothes, taking care of their personal hygiene, skin and hair care, helping them

dress, maintaining the house or doing small structural arrangements, etc.

Pulling out elder people from their homes and throw them to Elderly Residences

is a reality that soon will be over because those residences are completely full

and queued. Besides, it is also important for Portuguese society to keep

relations inside the family and avoid the break between the elder and his family.

From OldCares point of view, this new trend can become a competitive

advantage since they offer a customized Domiciliary Service and a set of other

complementary services provided by a team of professionals all specialized inhealth and/or with training in gerontology.

9.4.1.5. Segmentation and target market

The process of segmenting the market has been done based on the market

characteristics, on the objectives and values of OldCare and also on the trends

in the marketplace.

Accordingly, OldCare segmented their market by:

Geography

Age

Disposable income

Life cycle

Type of client

After deciding the variables that they are going to use so as to segment their

market, they decided to focus on the markets that best match the value

proposition of OldCare. They are going to target different groups according to

the service provided. As a result, OldCare ended up with the following:

Habitants of Bragana, surroundings and Northeast region of Portugal.

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People of medium disposable income?

People 60+ years old.

People with support needs on a personal level but not in total

dependence.

People on retirement.

Loyal and moderate customers.

Local institutions (elderly residences, local governments, third-age

universities, etc)

9.4.2. Analysis of the competition

As a result of the past couple years of increasing competition in gerontological

industry the only way to differentiate a company and to occupy their own place

in the market is to think in innovations in order to obtain a competitive

advantage. Finding out a specific niche has become a necessity that would

guaranty the success.

9.4.2.1 Competitive structure. Main competitors and their

characteristics.

According to my research the competitors that OldCare faces in the market in

Bragana and Northeast region of Portugal are the following:

HOME INSTEADHOME INSTEAD

Operating since 1994, the Home Instead Senior Care network has been devoted

to providing the highest-quality senior home care. Home Instead is currently

working under 800 franchise offices throughout the world in countries as United

States, Canada, Ireland, United Kingdom, Portugal, Switzerland, Japan, Taiwan,

Australia, New Zealand, Germany, South Korea, Finland and Austria. They have

hundreds of partners to whom they send their clients when they need any aging-

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related medical needs that goes beyond their home care capabilities.The Home

Instead Senior Care network's mission is a passion to be the world's trusted

source of companionship and home care for seniors.

Despite Home Instead recognition worldwide is unquestionable their franchise inBragana has not been seen as a good senior care services provider.

QUALITY SADQUALITY SAD

Same concept of OldCare of In-home support service. It was opened half a year

ago in Bragana as a result of a similar project to OldCares. It begun operating

under the direction of an Gerontologist and it has been growing slow. Dont havethe same brand power and alliances as OldCare and as a result it has been a

market follower. Quality SAD has been more worried in copying OldCare services

than in investing in their own innovations.

VARIOUS (GROUP OF SEVERAL IPSSS)VARIOUS (GROUP OF SEVERAL IPSSS)

A group of particular and non-profit institutions that have an extensive presencein Bragana and Northeast region of Portugal. Their target market is broader as

they provide services in diverse fields, such as health, education and solving

problems of the population. Their services include support for children and

youth, family and community and protection of the elders in their aging and

disease. They are regulated by the social security. Although their activity is quite

different from OldCares, as there are a big awareness of their services in the

market and due to their broader presence and cheap prices, they steal a lot of

potential clients from OldCare. It is a reality that people still look for cheap

prices instead of quality.

9.4.2.2. Competitive forces: entry and exit barriers, pressure from

substitute products, negotiating power of suppliers and customers

See the Five Forces Model of Porter in the point number 5. EXTERNAL ANALYSIS.5. EXTERNAL ANALYSIS.

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9.4.3. Consumer analysis

geography

age

disposable income

Services chosen

life cycle

type of client

9.4.4. Habits and stages of the purchase

decision process

The main habit is people coming to OldCare because they heard something from

friends and familiars or were recommended by other institutions. It is also

necessary to take in consideration people that will show up in order to get to

know the place and the services and then will consume. There are as well aconsiderable percentage of people that just saw the name OldCare at some

place and they go there to pick information later on, because a familiar or a

friend needs.

9.4.5. External Business Environment (PEST Analysis)

See as well topic number 5. EXTERNAL ANALYSIS PESTEL ANALYSIS5. EXTERNAL ANALYSIS PESTEL ANALYSIS

9.5. Marketing objectives

9.5.1. Determination of the market opportunity

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Mrcio Vara has indentified a new market opportunity where the concept of

quality and flexibility can be linked and not being provided by the competitors,

at least not in the same way that OldCare does it.

Exhibit 7 Service Market Positioning Map

The map above shows how much different OldCare is from their main

competitors and from the ordinary concept of domiciliary aid service according

to Quality and Flexibility.

Moreover, OldCare has everything different, which means that the offer they

have is the same as any other domiciliary aid service with a wider and

innovative range of services.

The importance of this graph is to see the market opportunity and how different

OldCare is, that is what makes them being a new and unique concept.

9.5.2. Objectives

In order to achieve the overall objectives for this project and measure the

effectiveness of the communication the following objectives were established:

Qualitative objectives

To create awareness to OldCare, as it is important to let everyone knows

what is this company purpose and inform about their services;

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Create buzz around OldCares name by using creative approaches;

To create a clear and exclusive image, with the use of selective

communication channels in line with the overall objectives of the project.

Quantitative objectives

In order to set realistic goals for the next semesters it is necessary to

forecast by using the experience of the owner.

To double the revenue of the 1 semester 2010 in the next year.

9.6. Critical Success Factors

There are some factors that are critical for the success of this business plan.

Those factors are the following:

Taking advantage of the different services of the company so as to attract

different customers and not be dependent just from one type of client;

Ensure that all decisions make long-term economic sense;

Adapt desirable features for the every kind of target customer;

Effectively communicate the values and objectives to the employees;

Maintain a clear mission and vision;

Continue with a low cost structure;

Keep expanding and enlarge relations by signing new partnerships and

strategic alliances.

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Through the new strategy we will try to increase the revenue of OldCare in three

ways. First by expanding the services so as to develop their market, secondly by

developing the existing services provided so as enhance sales and satisfy its

customers' desires and finally by delineating a marketing strategy

complementary with the expansion so that it attracts more customers and

increase the brand awareness in the new operational centers.

9.7 Marketing Mix

Following, it is presented the analysis of the new marketing mix suggested.

9.7.1. Definition of the product concept

OldCare is an innovative concept of Domiciliary Service. This new concept is

mainly a multi-purpose Home Support Service that mixes a wide range of offers

for a full-size variety of needs of the elder population. Each service is intending

to match each different type of need. For more details about the services see

the point

9.7.2 New ideas

VIP Card

Treatment Packages

Screenings to the population in the OldCares Space or organized by

OldCare

Patronize (support) Sport Events,

Organize Elderly excursions

Organize Elderly Meetings (dance, theatre, music, sports Grandparents

and grandchildrens race)

Alliances or Parnerships with STAR companies to put OldCares logo on

their space(Health image, Sport Centers, SPAs, Travel Agencies)

To conclude, all those ideas were thought to, more than creating direct demand,

the biggest objective is to create brand awareness, and consequently increase

revenue in a long-term period.

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Some additional details that could make a difference

Birthday Postals for the existing clients;

Install a Bio-Healthy Park in the OldCares space (so that it can be seen

from the exterior, agreement with the company provider)

9.7.3. Branding

Improve Website create a forum and improvement of the general aspect of the

website. Firstly it would create a clearer picture in the mind of potential

customers about what exactly OldCare stands for. Moreover, the new website

could be constantly adapted with all different kinds of events being organized by

OldCare or events where OldCare is going to be present. As a result, people that

already know OldCare could be all the time informed about all those news.

Newsletter (monthly)

OldCare T-shirts distribution to the existing clients - Way to increase

awareness of the brand and bring more families to their facilities.

9.7.4. Price

The pricing strategy was decided taking into consideration the costs of thecompany, the value the customer attaches to the service and of course, OldCare

objectives.

One of OldCares objectives is to increase the revenue and to get higher margins

than the ones reached in the first year of operations. After considering the prices

of the general set of services of OldCare, it was decided that any change of the

prices would not have desirable results. During the expansion, by implementing

a penetrate price positioning, they could not be able to make good margins and

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by setting higher prices than the ones they have, they would have the risk of

creating the feeling of bad value for money to any potential customer. For that

reason, we considered to be appropriate maintaining the prices they already

practice in the first operational center, as the difference in the power or

purchasing does not diverge much from one operational center to another.

9.7.5. Promotion

The overall goal of OldCares promotional program is to create more public

awareness through various promotional tools that will result in increased

demand.

Of course, in order to have a successful promotion, it has to be analyzed which

segment is going to be addressed with the lunch of each new idea.

All promotional tools that are here suggested will target current customers and

potential ones as well.

Advertisement in free news papers and local magazines (For each new

operational area);

Promotion through Sports Academies, Health clinics, SPAs, Travel

Agencies

Constantly updating the website with anything that will be organized

(Health Screenings, Sport Leisure Races, Live Shows of music, theatre and

dance)

Special offers (Discounts, Packages, VIP card)

Word of mouth communication through Social Media

Social Media

Based on nowadays critical role of social media, we decided to emphasize on

this promotional tool. Obviously it is not intended to target the elders directly as

they are not the main users of Internet but to target their families, which are the

one that in the end take the decision to find a Home Support Service.

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The idea is that OldCare could establish a Facebook, and Twitter page with links

to the website and shortened versions of its posts. Customers will be

encouraged to become fans of those social media and then to share information

with their friends.

In addition, any special event organized by OldCare would be posted on the

pages above so every potential customer would be informed.

Special offers (Discounts, Packages, VIP card)

Discount 2x1 During one incredible month experience for target elder

couples;

Services Package Domiciliary Service + Technical Aids Equipments =

free TCare device;

9.7.6. Place

OldCares services can not only be distributed in OldCares headquarters as theycan be provided in the clients home, public spaces or private institutions,

depending how the client wants. Besides, the client can do his reservation

through phone service.

9.7.7 People

The employees of OldCare should represent the desired culture of the business.Interaction between employees and customers is an essential element of

OldCares image. Thus, employees should be reinforced to make this clear to

every customer and creating and transmitting a peaceful energy for them. Of

course, training the employees to adopt this kind of serving style would not be

difficult due to the small number of employees.

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The existing management style is exactly the one that comes from the culture of

OldCare and that can help in the employees' training procedure as it is a

dynamic, innovative and caring management.

Customer's service has to be done in a familiar way so as to make the guestacquiring the feeling of a comfy place.

6.7.8 Physical environment

The elements that would complete the OldCares value proposition are the

following:

Lightening facilities in OldCare should be enlightened to transmit calm;

Comfort facilities in OldCare should offer comfort for customers

6.8. Implementation

Time may be specified on a relative scale rather than specific calendar dates. It

should be created three different areas for implementation that includes

Promotion, Activities and New Ideas. The main objective of this schedule is to

guide OldCare in the process of implementing, by knowing exactly when they

should start preparing and allocating the necessary resources to put them in

practice.

7. Budget

The total amount of investment necessary, although not figure it out exactly,

seems very reasonable since the benefits it would bring, would amortize the

investment in a short-time period and in addition to that, I believe they would

give OldCare more reliability, sustainability and a stronger position to face future

years since the project OldCare was thought to be a long investment by his

owner Mrcio Vara.

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7. Control

Critical success factors

OldCare should take advantage of the different services of the company so as to

attract different customers and not depend so a lot in just one type, adapt

desirable features for every kind of target customer and communicate

effectively the values and objectives to their employees. Besides, it is my

opinion that OldCare should keep their core service the domiciliary service and

not, for example, the sale of geriatric equipment. If that happen, they would

probably lose market to other companies, as there are a lot of them specialized

in this type of selling and OldCares mains competencies and values are related

with health and caring about people. For that reason I suggest OldCare to

continue invest in their growth focusing on the domiciliary service and use the

other services like Sales, to complement their full service.

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11. QUALITY MANAGEMENT

When a customer pays for product he wants guarantees that a company is

capable of meeting his quality requirements, now and in the future. For that

reason, a commitment to quality is a winning attitude, to the extent that quality

is the key factor in a long and successful relationship between organization and

the customers.

Thus, the certification of Quality Management System of a company is the

recognition by an external and independent entity of whether the companymeets in an effective way the client exigencies and the legal and regulatory

requirements.

Objectives of the implementation of a Quality System

Among others the objectives to be achieved when implementing a QualitySystem are:

Penetration into new markets, or safeguarding of the existing ones;

Increase confidence, internally and externally in the working methods;

Reorganization of the company;

Increase motivation of employees;

Prestige;

Greater control of non quality costs and its reduce; Increased customer satisfaction;

Worldwide recognition;

Becoming part of the list of leading companies in the world market.

The main objective of ISO 9001 is customer satisfaction, as can be seen in the

following diagram:

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Fig. 8 Main phases of the Process of Quality Certification by the standard ISO 9001

How does the implementation works: Planning - setting objectives and methodologies in order to achieve

customer satisfaction;

Do - Implement the previous methodologies;

Check - Monitoring and measuring the processes / products and then

reporting the results;

Act Put in practice measures to improve the process / product.

Moreover, on practice the implementation of a Quality Management System

goes through three stages:

Document what you do;

Do what is documented;

Record what was done.

The practical application of this standard is of great importance for the success

of a business and the evolution of a company and the services they provide.

This certification of quality it is an opportunity for OldCare to differentiate even

more from their competitors and to obtain more recognition and awareness in

the market. I believe that by implementing the ISO 9001 standard certification

OldCare could definitively ensure their further success in the marketplace and

establish a more powerful identity in the customers mind.

The only opposition to this certification is the fact that is not accessible to all the

companies with prices around 16.000.

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25% average

increase Expansion

Investements

(marketing)

30% Interest rate

Nodividens

12% increase in

equipm. Sales;

26% increase in

services provided

1212. FINANCIAL PLAN. FINANCIAL PLAN

Below you can find financial ratios and financial statements such as income

statement and balance sheet of the company OldCare for the first semester of

2010 as well as forecasts for the second semester of 2010 and year 2011.

INCOME STATEMENT

DEC2009

1Sem2010

2Sem2010 2011

Forecast Forecast

Net Operating Revenues 13825,00101613,75

135265,05 260861,04

-Sale of equipment 6525,00 47958,75 52874,52 106285,37

-Service delivery 7300,00 53655,00 82390,53 154575,66Cost ofgoodssold 1694,18 12881,58 18034,22 43282,12

Gross Margin12130,82 88732,17

117230,83 217578,91

Operating Expenses 5082,53 38644,75 67589,92 127481,60

Operating Profits 7048,29 50087,41 49640,92 90097,31

Non-Operating Expenses 3388,35 25763,17 27051,33 60736,67

EBIT 3659,94 24324,24 22589,59 29360,64

Net Income2.561,96

17.026,97

15.812,71

20.552,45

NET MARGIN (%) 19% 17% 12% 8%

Retention Ratio (%)100% 100% 100% 100%

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Acquisition of a van,

new office,equipment;

ASSET TURNOVER 0,20 1,12 1,23 2,01ROA (Return onAssets) 0,05 0,27 0,21 0,23

LEVERAGE 7,1 3,4 2,6 2,0ROE (Return onEquity) 26% 63% 37% 32%

BALANCE SHEET

ASSETS

Clients c/c 2098,00 4405,80 4626,09 5320,00

Cash and equivalents 510,00 3213,00 3373,65 5313,50

Property and equipment 51072,90 66039,63 81006,36 101006,36

Bank deposits 13448,62 16138,34 19366,01 16138,34

Inventory 380,00 1140,00 1197,00 1995,00

State and other publicentities 3263,88 9791,64 9791,64 4895,82

TOTAL ASSETS70773,40 90936,77

109569,11 129773,21

LIABILITIES + EQUITY

Clients c/c 27500,00 28875,00 30318,75 28651,22

Accrued expenses 960,00 979,20 979,20 1403,60

State and other public

entities 323,34 970,02 970,02 1449,60Non current liabilities 31990,06 33085,58 34461,46 34876,66

TOTAL LIABILITIES 60773,40 63909,80 66729,43 66381,08

EQUITY 10000,00 27026,97 42839,68 63392,13

The figures above show a good financial performance of OldCare.

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In the first semester of 2010 OldCares revenues surpassed the barrier of

100.000 with a good margin of profits and the forecasts for the second half of

2010 are quite good as well.

The net margin is also quite optimistic and the reason to be declining is becauseOldCare have been making investments in the first half of 2010 and more are

expected to the second half of 2010 and next year of 2011 as the expansion

plan requires more cost and investments.

Analysing figures in detail:

The Retention Ratio indicates the percentage of a company's earnings that are

not paid out in dividends. OldCare credited all their earnings to retained

earnings in 2009 and they will do the same in the second half of 2010 in order to

have sufficient funds to invest in the expansion by natural growth, i.e. without

more credit help.

Obviously, the expansion of the business so far could just be possible with bank

credit help thats why the Leverage Ratio until December 2009 is so high in the

figures above. Since the beginning of 2010 this ratio has been decreasing

because the capacity of OldCare to finance their assets with their own capital is

increasing. The challenge of financial leverage is to strike a prudent balance

between the benefits and cost of debt financing, even if it increases our ROE

when is maximized.

The Return on Equity Ratio (ROE) shows an excellent picture of the company for

the potential investors, as the return of the investment has been very stable and

rather high for a new company.

The Asset Turnover Ratio indicates OldCare efficiency management to generate

sales through investments in their assets. For the future, this ratio predicts a

very high performance.

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Financial Strategy

To accomplish the goal of expanding to all the North Region of Portugal by

creating four new Operational Centres, external capital will be required.

Consequently, OldCare is either interested in finding new financial investors or

finding business partners. Although OldCare has good capital funds for natural

growth, it is not sufficient if in the end they choose to create as well, four new

offices in each operational centre. By deciding to do that, it will involve higher

investments in buildings, licensees, eventually more vans, more equipments,more fixed costs, more advertisement, and so on.

Other possibility that has been questioned is the possibility of creating a

franchising network, as they have been receiving some proposals to do that.

From our point of view this last option is not the most appropriate right now

because creating a franchising requires standard operations and a clear cost

structure and OldCare hasnt been able so far to accomplish these requirements.

Furthermore, the franchisee would have to fit with the same values andobjectives of OldCare, which could be a little bit difficult in, for example, when

wiring specialists of gerontology and health or with training in aging, as right

now there are not that many professionals in this field in Portugal. As OldCare is

quite young company, they still need to define which costs arent producing

revenues, which activities are more profitable as the most important experience-

based source of cost reduction is learning, and this learning process implies

repetition in order to decrease the time wasted in providing a service. The time

taken by a service to be provided is the bottle neck of OldCare, as theprofessionals just can go to the next client when they are done with the first

one. Just after doing this analysis of the operation of each task it can be possible

to reorganize processes and become more efficient and then settle standards,

which is practically impossible due to the fact that OldCare provides a very

customized service and all depends on what the customer wants.

Nevertheless, this could be a great possibility for a near future, as favourable

conditions will soon came out.

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The investment necessary to install a new office in a new operational centre is

around 20.000, which includes a new office all refurbished, a van to provide

domiciliary service, licensees, and basic equipment. Other possibility is to opt for

an open space office. This option would keep away the heavy costs of

refurbishment and licensees.

1313. CONCLUSION. CONCLUSION

Aging is an important stage in the life of an individual and requires special

needs. Therefore, in line to get those needs met, I present you this new conceptof providing services in order to be able to fill the deficiency most frequently

experienced by elder people.

With the project present on these pages, I strongly believe I transmit that this

innovative concept of home assistance service is a feasible alternative and could

even become the ideal response in meeting the needs of the elderly.

At the same time, I provide a business plan where I analyzed and reviewed all

the important points of the company and finally outlined an expansion plan and

related marketing strategy, which will be undoubtly an important and inevitable

part of the growing process of this company.

I want this marketing plan to be able to increase the market share and

consequently increasing returns, and sincerely hope that in some way I will be

able to help OldCare in the achievement of their overall goals and I wish them all

the success in this new stage of their life.

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BIBLIOGRAPHYBIBLIOGRAPHY

LARRY, E. Greiner Evolution and Revolution as Organizations Grow HBR vol. 50 (4) 1972. Rep May, 1998.

HIGGINS, Robert C. Analysis for Financial Management, McGraw-HILLINTERNATIONAL EDITION 2009.

Websites consulted:

www.kwintessential.co.uk/resources/global-etiquette/portugal.html -Countries Business Etiquettes - consulted in 05/07/2010

http://stats.oecd.org/ - Country statistical profiles 2008 and 2009 -

consulted in 05/07/2010

http://www.ipq.pt/custompage.aspx?modid=1576&pagid=3352 (ISO

9001) Quality Certification - consulted in 27/07/2010

http://homeinstead.com.pt/ - consulted in 11/07/2010

www.drcarlosrocha.com/ - consulted in 11/07/2010

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http://www.kwintessential.co.uk/resources/global-etiquette/portugal.htmlhttp://stats.oecd.org/http://www.ipq.pt/custompage.aspx?modid=1576&pagid=3352http://www.kwintessential.co.uk/resources/global-etiquette/portugal.htmlhttp://stats.oecd.org/http://www.ipq.pt/custompage.aspx?modid=1576&pagid=3352


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www.cebrigantina.com/ - consulted in 11/07/2010

http://www.ine.pt; - National Statistical Institute of Portugal Consulted in

12/07/2010

www.turestaurantefranquicia.com - consulted in 27/07/2010

http://www.homenurses.com.au/ - consulted in 28/07/2010

http://www.inhomesupportservices.com/ - consulted in 28/07/2010

www.quickMBA.com - consulted in 06/07/2010

www.maxipedia.com - consulted in 27/07/2010

www.socialgest.com - consulted in 26/07/2010

http://www.aeportugal.pt/inicio.asp?

Pagina=/Areas/Qualidade/ISO90012000&Menu=MenuQualidade -


http://pt.shvoong.com/exact-sciences/engineering/493912-certifica

%C3%A7%C3%A3o-da-qualidade-pela-iso/ - Quality Certification -


ACKNOWLEDGMENTSACKNOWLEDGMENTS

First of all I want to thank the owner of OldCare, Mrcio Vara, for all the time and

patience he had to provide me with all the information about the company, for

the long hours missed answering the bunch of questionnaires, and for the

sympathy and care.

I want to thank to all the people that contribute in some way for this project, by

supporting me, for the tips, for guiding me, for providing information, for doingresearch, for whatever.

Finally, thank you EADA for guiding me in this new phase of my life, for all that I

lived and learnt, thank you for the amazing teachers and remarkable Master,

thank you for the opportunities of networking, the workshops and seminars, all
http://www.turestaurantefranquicia.com/http://www.homenurses.com.au/http://www.inhomesupportservices.com/http://www.turestaurantefranquicia.com/http://www.homenurses.com.au/http://www.inhomesupportservices.com/

mario mouraz - business plan - oldcare gerontological services - eada 2010 - hmu1 final project

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