Week3

| | What external pressures will Grant Clinic, Inc. face in the next 3 years' Competition: It is possible some other service provider may enter in the market and get the market share of Grant Clinic. Technological changes: A better quality equipment may be introduced in the market to reduce the cost of service provision and better quality. Delay in construction of Suburban Community: As it is expected that the Suburban Community will be completed in next 3 years which is crucial for the success of new service as the target market is that community. Inflation: The inflation may enhance the cost of service. What corrective measures will you recommend' Quality of Service The quality of service may help in maintaining a good reputation in the market, thus avoiding the affect of competition. Cost of service The cost of service should be competitive to provide the services to customer at minimum price, this helping to beat the competition. What preventive measures will you recommend' Keep an eye on technological improvement: Try to keep an eye on technological improvement as there are three years time period to complete the Suburban community which is the main customer of the services to be provided. Keep an eye on the progress of construction If there is any delay occur in construction of suburban community the organization should adjust its plan accordingly. How do you plan to adjust for risk' The company should analyze the worst possible condition and should develop different sets of projected income statement keeping in view the affect of inflation or any variation in market share due to competition and technological changes. Then company may decide what to do' What opportunities for growth exist' As the population of the area is 24000 people and clinic has just estimated of 25% which is just 6000 patients, there is a possibility that there may be more patients. Moreover, it has been estimated that each patient will visit for 5 times in a year, which may also be more than 5 times in a year. Discuss the proposed capital budget for equipment purchases from Week Four and its effect on the financial plan. The purchase of equipment will generate a net income of $2000, which seems to be on lower side and with this narrow margin and the risk mentioned above, it seems that the Clinic should not go for the purchase of this equipment, but if the clinic has some other data and optimistic about more patients to come then it is viable to go for the equipment. |Grant Clinic | |Projected income statement | |  |  |  | |Sales |  |1500000 | |  |  |  | |Less variable cost |  |  | |Medical supplies |180000 |  | |Service bureau |30000 |  | |other expenses |90000 |-300000 | |Contribution margin |  |1200000 | |Physician salary |594000 |  | |Nurses Salary |216000 |  | |Techn and Admin salary |228000 |  | |Rent |48000 |  | |Other expenses |72000 |  | |Service bureau |24000 |  | |Depreciation |16000 |-1198000 | |Net profit |  |2000 | Net Profit Margin Ratio The net profit margin ratio of the project is 0.133% which is very low any deviation in estimate may turn this profit margin into negative. [pic] Click here to view the Terms of Service section on verifications.