Internal factors
The internal factors which are directly related to the issues presented in the case is that people, patients and even the doctors were sometimes hesitant and reluctant to communicate the patient condition to them. The idea of hospice is to treat people who are ill-treated which meanthey actually do not have time to recover from the disease. These people are asked to come at Vitas and spend life with dignity and ease. However, the issue that is internally affecting the overall business procedure is the lack of understanding of the services that are being offered by Vitas.
Theresources that are available in the industry are not effective enough to make a smooth procedure for the acquiring company. Along with this, the structure of the business model was also a bit complex. Most of the patients were not told about the span of time they have, in fact the doctors themselves were hesitant to share the time with patients.
Along with this, the general belief was that the traditional cure for the disease should be done rather than going for hospice. The awareness among the general population was quite limited and the people were not really sure about its worth and the effect it might bring into the dying person’s life. All these factors really contributed to the strategic, tactical and operational issues faced by the Vitas.
Strategic intent
The strategic intent of Vitas Hospice is to become, or in fact grow within the highly fragmented industry of hospice. The main theme or the theory of the company is to find ways which can serve the needs of the company with their strategic or the long term goals. The company is looking to acquire small local organizations and hospices around the different cities. Along with this, Vitas is also looking totransform its business model from being a not for profit organization to a profitable organization. This has been the strategic intent for the company where it has focused on expanding its business and services to different states across the country. Along with this, the long term goal for Vitas also includes to somewhat smoothen the business process model at the not for profit firm. The complexity of operations needs to be reduced and eventually removed in the long run, making Vitas become a successful or the largest growing hospice organization in the United States.
Alternative strategies
The alternative strategies based on the strategic goal for the company which is to become the most recognized and largest organization in the hospice industry. Vitas is looking to acquire similar business companies in various states to achieve its target. The alternativestrategies for the company are as follows:
Rollup Strategy
The company or the organization is looking to use the roll up strategy. Under this strategy, a large company in order to become a huge company acquires smaller companies in the same industry. This type of strategy is generally formed when the main company moves forwardfor becoming the market leader.
One recommendation for Vitas is to continue with the current strategy. Secondly, this strategy can be effective becausedue to the roll up strategy, Vitas will have control over business. Although this strategy might be an effective one, but it has a lot of risk associated with it. The number one problem is that as the case states, the industry is quite fragmented and there is no growth opportunity. Therefore, roll up strategy might be a risky move to continue when acquiring a firm in the same industry. However, Roll-up strategy can be an effective way to become the only player in the industry.
Partnerships
Another alternate or recommendation for Vitas is to develop partnerships with different states hospices. The reason is simple, since the industry is fragmented then the growth and development chances are next to the minimum, in that case to follow Roll up strategy might not work effectively.
Therefore, partnerships will help Vitas in developing and maintaining a set of standards with the different state companies and since they will have an idea of the market, it will eventually help Vitas as well. Therefore, the partnership will be a reasonable option because the risk will be less and Vitas will not be the only company to bear all expenses and losses in the acquisition.
Transformational Merger
This can be another way for Vitas to increase the chances of becoming a successful entity in the hospice industry. In a transformational merger, the acquitted firm provides control over certain things. This is not the most effective method because not all the companies follow this method of business. The benefits for transformational strategy are that, it allows and supports as a parent company, in acquiring a firm. This can be a reasonable move once the parent company has the leverage of performing business in a growing sector................................
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