Term Paper on "Access Group"

Term Paper 10 pages (3211 words) Sources: 1+

[EXCERPT] . . . .

Access Group

Executive Overview:

The Access Group (TAG) is a consulting firm that has broken out of the previous consulting molds. Originally focusing on hands-on engineering and manufacturing consulting for manufacturing companies, the company has grown to include maintenance reliability services, architectural services, construction services, and has spread its wings to a more diversified clientele including their recent entry into the healthcare industry. The organization is led by company co-founders, Charles Hagood and Mike Brown.

TAG's past and current success has been the result of a variety of factors. A dedication to doing the right thing for their clients and a commitment to value added services has been an integral part of the phenomenal growth, for the organization. Despite the recession that began in late 2000 and was exacerbated by September 11th, TAG was able to continue its growth due to continued diversification. Diversification of services has been a cornerstone of their continued success in both their top and bottom line.

New opportunity is now knocking on TAG's door, in the form of entry into lean process consulting for the healthcare industry; however the primary challenge is how will the organization be organized to take advantage of this new opportunity, in the most efficient and effective manner possible? This challenge must be addressed as quickly as possible, in order to take advantage of the fact that there is very little competition for these types of services, nationwide, and none in the Southeast, where TAG is located. The sooner TAG is able to make this decision, and get this new facet of their business underway, the better. Early entry into a new market could help them secure their leadership position in the industry.

Problem Statement:

TAG's primary problem is one that most businesses would love to have, how to organize one's organization to take the fullest advantage of a new, and virtually unexploited, opportunity, while providing the highest levels of service to new clients, while maintaining the highest levels of service to existing clients, in a currently exploited industry. This is clearly the problem as TAG has undergone several evolutions of service offerings, as it has grown over the years. In some instances, they have handled this growth by simply expanding their current portfolio. In other instances, they have formed new organizations to address these new opportunities, such as with the formation of TAG Maintenance and Facility Services or their architectural and design service organization, TAG Design Services, LLC. In other instances, they have become affiliated with existing companies, forming a mutually beneficial relationship with the organization, such as exists with TAG's relationship with Jabezco Industrial Group, Inc. Part of the reason why TAG has been able to so successfully take advantage of these entrances into new industries is how they organized their company to address the opportunity. The same will be true of entry into the healthcare consulting industry. An appropriate organizational design will enhance TAG's other strengths, while an inappropriate design will only serve to way the organization's efforts down.

The immediate issue that needs to be address is how best to organize to meet this new opportunity. This has to be decided to even truly begin industry entry. Surely, efforts can be made under TAG's current consulting arm; however, if it is decided later on that it would be more effective and efficient to break off this facet, the change will only be a distraction to the success. This challenge is not only urgent, but also extremely important, for this very reason.

In addition to this challenge, there are secondary problems that exist for TAG. These include whether or not TAG should further expand their services into other industries, beyond their core manufacturing clients and the new healthcare opportunity. In addition, there will be a challenge of how best to manage this potential growth while still maintaining the organization's unique and quite effective culture. Although both of these challenges are important, they do not have the urgency of the primary challenge. Entry into other industries can be addressed after entry into the healthcare industry has been firmly established. Maintaining corporate culture will be a continual challenge for TAG as their company grows, whether they enter new industries or not.

SWOT Analysis:

Strengths:

TAG has many strengths it has called upon for its past and current success, as well as can continue to utilize to best take advantage of new opportunities. First, is TAG's history of success that they have and can continue to build upon. Their status as one of Music City's Future 50 companies in 2001 and 2003, along with their ranking of 15th fasting growing company in the mid-south, is evidence of this past success, along with their continual top and bottom line growth.

Hagood and Brown are also strengths for the organization. Both have proven themselves to be great organizational leaders with vision and dedication. Their moral standards, backed by their religious faith, holds their company to the highest standards possible, and this is valuable benefit to many of their clients. Their commitment to charitable causes, and ensuring their employees can also participate in charity, has set them apart from their competition. It is a commitment to do what is right and not necessarily what is easy that has helped grow their position in their industries.

Weaknesses:

Opportunities:

Significant opportunity lies in the expansion of consultancy services in the healthcare industry. The sad state of today's healthcare organizations, in general, means the industry is ripe for skilled consultants that are able to come in and show them how to reduce skyrocketing costs, increasing rapidly declining profitability, and maximize key resources including healthcare personnel, facilities and medical equipment. This opportunity is enhanced with the likelihood that many of the manufacturing lean processes can be converted for this industry.

Threats:

Threats for TAG lie in a couple of areas. First, economic uncertainty is always a threat to the organization. However, the company has been able to shield against this threat by further diversifying their services. In addition, the possibility of socialized healthcare is also a threat. Should healthcare facilities begin to fall under the direction of the government this may negatively affect this new opportunity. Lastly, increased competition. Although currently there is little competition for healthcare consultancy,

Case Data Analysis:

The rise of the challenge of how to organize their organization in an effort to best take advantage of expansion into consulting for the healthcare industry was based on TAG's previous expansion success. Had TAG not been successful in service expansion, such as the maintenance industry, or the architectural and design industry, they may be less likely to consider an opportunity to expand beyond their core service offering of consultancy to the manufacturing industry.

In addition, the state of the healthcare industry itself has been a catalyst to this opportunity. "Healthcare costs have risen at double digit rates for the past several years, creating a potential crisis for reimbursement. At the same time, profitability within healthcare has suffered" ("TAG"). Nursing shortages and inefficient hospital procedures all add to this need for a consultancy firm that can guide these healthcare organizations into being more efficient and therefore more profitable. and, just as their clients need to be organized in such a manner to promote efficiency and efficacy, so does TAG's new service offering.

Alternatives and Evaluation of Alternatives:

There are four main alternatives that TAG may wish to consider when addressing the primary challenge of how best to organize their company to take advantage of entry into this new industry. The first alternative is to organize such that operations fall under the current manufacturing consultancy branch, perhaps as a separate division. The second alternative is to establish a new organization, much as they did with their maintenance and architectural divisions, to address this new opportunity. The third alternative is a combination of the first two, allowing for initial control of the new services to fall under the established manufacturing consultancy branch, and then, when revenues dictate, establish it as it's own organization. and, the fourth alternative is to simply not pursue the opportunity at all.

Allowing the healthcare consultancy opportunity to be under the control of the established manufacturing consultancy organization offers several benefits. First, less capital will be required for start up. Second, overhead expenses will be minimized and they will be better able to take advantage of other economies of scale. and, third, there are experienced marketing personnel who would likely be well-suited to help grow this new division. However, the main drawback is the likelihood that should one organization become so large, as is likely with this new industry, TAG may lose their personal corporate culture that has been such a value to the company.

The second alternative offers the benefit of allowing the manufacturing consultancy organization to remain focused on their core competencies. It also allows for a diversified branch to remain smaller and thus more likely to maintain TAG's corporate culture. However, capital investment will be higher, costs will be higher,… READ MORE

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