Operation Analysis
CCA has 65,000 beds in its 60 prison facilities across United States and its cost of accommodating on prisoner per day is $49/- which is $4.65/- in comparison to the key competitor GEO Group. However, CCA is the largest contractor of providing private prison facilities and management services to government authorities in United States and this competitive advantage has made it key player in the United States’ private prison market. Moreover, its employees are skilled and they have successfully managed the number of government owned prisons.
Marketing and Competitive Position
Corrections Corporation of America’s (CCA) competitive position is very much strong in United States prison market but its worldwide market position in comparison to its key competitor, GEO Groups, is not very much strong in some of the factors as shown in strategic group mapping shown below. Although, CCA’s revenues are almost 60% higher than that of GEO Group but still GEO Group’s cost of providing one bed is 10% lower than the cost of CCA. In addition to this, total number of prison facilities are same in both companies but number of beds owned by CCA are 8% that is higher than GEO’s beds, however, GEO’s international presence have given it a strong competitive position.
Evaluation of Alternatives
Alternatives
Wait For the Things to Turn Into CCA Favor
First option CCA has is that it can wait for the United States population to increase so that the number of offender will increase and CCA will be able to increase its revenues.
Take Initiatives to Encourage Government Authorizes to Spend More on Prisoners Rehabilitation Activates
Another alternate will be that CCA can rake initiatives through mobilizing the social NGOs in order to encourage government for spending more in rehabilitation activities of offenders for the betterment of the society.
International Expansion through establishing Own Prison Facilities
Under this alternative, CCA can directly enter into foreign market such as European market because the crime rate in Europe is rising so the need for prisons is also growing and CCA can fill the gap through establishment of its own prison facility in Europe.
International Expansion through Securing Management Contract from Foreign Government
In addition to this, CCA can secure management contracts from foreign government authorities for management of their prisons instead of establishing its own facility in Europe.
Metrics
Evaluation of above alternatives have been performed on the number of decision criteria such as capital requirements, CCA’s ability to improve its goodwill, alternates fit with current process, market share, and risk of loses.
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Decision Metrics |
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Alternatives |
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Factors |
1 |
2 |
3 |
4 |
| Cost to implement | Nil | Low | Moderate | High |
| Increase in Profitability | High | High | High | High |
| Ability to improve Goodwill | Nil | High | Lower | Lower |
| Fit with current process | High | High | Moderate | Moderate |
| Maintain Market Share | Low | Moderate | Moderate | High |
| Risk | Nil | Low | Moderate | High |
Wait For the Things to Turn Into CCA Favor
This alternative is not suitable and it can put CCA’s revenues and profitability in great danger because waiting for the change to happen may not incur any capita coupled no risk of failure but in the same way this alternate will not contribute to the market share to increase or at least maintain at present market share, meanwhile, it will not have any impact on its goodwill but it will probably increase the chances of losing its market share.
Take Initiatives to Encourage Government Authorizes to Spend More on Prisoners Rehabilitation Activates
This alternative seems to be quite sensible because this alternate will not only require lower expenditure on starting campaign for mobilization of social NGO’s in order to encourage government spending on the rehabilitation and revival of offenders. In addition to this, CCA will be able to build its goodwill and based on the fact this it will be treated as a social cause started by CCA for the greater good of United States’ citizens. Meanwhile, since CCA already have secured contracts from government authorities for the management of their prison facilities, hence, it will increase its revenues from increase government spending on rehabilitation of offenders and provision of accommodation to offenders, meanwhile; it will be perfect fit with its current process because nothing will change hand from government authorities to private prison provider..............................
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