Research Proposal on "Structuring New Venture MBA Program"

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Research Required

What we have right now is a sense that there is a strong market opportunity. It will require a substantial amount of research to determine the extent of this opportunity. Much of the final business plan, in particular with respect to the scope of our operations, will flow from our determination of market size.

Thus, the first research step will be to estimate the market size for our niche. We will need to drill down beyond generalized health care statistics to ascertain the potential market size for cardiopulmonary clinics. This will involve demographic research; acquisition of health care statistics; an analysis of changes in government regulations and how that will affect market size; and a trend analysis to ascertain if they trends we have observed anecdotally can be expected to hold over the long run.

Once we have a better sense of the market size, we can work towards estimating our response to the market opportunity. This means gathering information about the cost of operations at given capacities. We must establish a baseline cost first. We have estimated $3 but will confirm this with research into equipment leasing/purchasing costs, doctors' salaries (and their trends) and building costs. We will then analyze the marginal increase in cost to increase capacity. Given that our key cost variables are real estate and physicians, capacity cannot be increased incrementally but in leaps, so it is important to understand before committing capital what the implications of increasing capacity will be.

Lastly, we will need to conduct ancillary research. Important factors that may impact the decisions we make include the impact of changes in the governmental, technological and economic environments. We know that the government is going to make changes to the way it deals with health care; we know that technology is changing rapidly; and we have seen substantial turbulence in the economic environment of late. We need to understand the direction and intensity of these changes in order to tailor plans that are sufficiently robust as to withstand adverse changes should they occur.

Some of this research will be secondary -- government agencies can lend insight into health care and economic trends, as well as demographics. Some research will come from industry groups. Costing information will come from prospective suppliers. Our executive team, already active in the industry, will be able to provide some of the relevant information as well.

Communication Plan

Active communication is essential to the project. The advisor will receive regular updates as work is completed. Draft chapters will be submitted when completed, as will the financials. If there are no new completed sections for a given week, the advisor will receive an informal status update outlining the progress that has been made and when the next update is expected to be completed. This way, the advisor is abreast of our progress even if no final works have been completed.

The progress reports will be kept relatively informal and simple. The minute details are best left for the business plan. If there is a major problem in the process, an immediate update will be made, as leaving problems until a scheduled update time is both risky and unprofessional.

The expected timetable for deliverables will be one chapter per week. The financials will come last, since they will flow from the information gathered and synthesized in the other sections. The research sections will come first. Each section will be initiated concurrent with the others, so there will not be an update in the first week. However, it is hoped that there will be regular updates thereafter, with the heart of the business plan flowing from the research findings.

Added Value

The principles involved in this project have been looking for opportunities to expand their revenue streams in their field of expertise. The two physicians on the senior management team have especially been focused on developing a new business model. The Hattan Medical Center adds value to their medical skills by expanding potential revenue, taking them out of the salaried world and into the entrepreneurial one.

The value that they bring to the enterprise includes labor, expertise, industry knowledge, contacts and expertise in managing a medical clinic. Of these inputs, only the labor and medical knowledge are being utilized at present. By developing and leveraging the other areas of expertise, the senior management group expects to build a model that not only generates more revenue, but also delivers a higher-value service to the residents of Dubai than is currently being delivered.

Application of MBA Concepts

A variety of MBA concepts are to be used in the creation of this business plan. These include environmental analysis, capital budgeting, strategic management, value chain analysis and financial planning. The environmental analysis will utilize such tools as SWOT analysis, PEST analysis and Five Forces analysis. These tools allow management to gain a keen understanding of both the internal and external environments. The outcome of these analyses is that management understands the nature of the firm and how the firm fits into the competitive environment. The external analyses also assist in the formation of the business plan because it provides management with another means of evaluating the opportunities in the marketplace.

Capital budgeting is a critical component of the business plan. The business needs to be evaluated with capital budgeting techniques in mind. This forces the management team to gain clear estimates of costs and cash flows. From there, the expected value of those cash flows can be computed. This will allow management to understand if the business opportunity identified has sufficient profit potential and if so, under what circumstances. The framework provided in capital budgeting will allow for a sensitivity analysis. This is especially important with respect to such considerations as the size of the business and alternative financing plans if our interest-free government loan does not pan out.

Strategic management concepts will help guide the business from scratch. Strategic management begins with an overall mission and drills down to specific objectives, targets and implementation strategies. This framework is particularly valuable for our startup business because it will force the management team to envision the manner in which the clinic will operate on a day-to-day basis. Without strategic management, the concept may be relatively vague and the plans may not support the objectives. Strategic planning is a tool that provides substantial focus with respect to the business.

Value chain analysis establishes exactly how the venture will succeed. It is not sufficient to merely identify a market opportunity. Management needs to have a specific plan to exploit that opportunity. Management should have a plan to not only develop competitive advantages but to make them sustainable. A value chain analysis places specific emphasis on what we can do at the clinic to ensure its success, not only during the initial launch phase but going forward several years.

The value chain will also help to set strategy. It will help us identify the areas in which we can add the most value, whether those areas are in marketing, customer service or technical expertise. The value chain analysis will force us to gather information about our potential customers and their needs. This will focus the management team on ensuring that the clinic develops those competencies.

Lastly, we will utilize financial planning techniques. This is important both internally and externally. Internally, the focus will be on management accounting techniques. By creating useful statements and measures, we will… READ MORE