Assessment 1: Individual Assignment – 20 marks – week 5Assessment 1Length and MarksCriteria1. Individual AssignmentWrite an essay explaining the main strategy development tools and how they are...

Strategy Development Tools        1
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Contents
Introduction    3
Aged-Care Industry    3
PESTEL    3
5 Forces Theory    3
Child-care industry    4
Diversification    4
Integration    4
Conclusion    5
References    6
Introduction
The world’s population, in most developed countries is ageing and thus, the need for effective aged care services is at an all time high. The onset of diseases like Alzheimer’s and Dementia has also caused a huge increase in the number of people who are living in old-age homes. There is also a large number of women entering the work-force and thus, in most countries, even the child-care industry has developed to a large extent as well.
These industries however, need to have strategic management tools to develop further. A lot of them are tiny, but there are a lot of large companiess in the industry as well. This means that it needs strategic development tools.
Aged-Care Industry
The aged care industry is growing at a very fast rate all over the world. In light of this, there are two strategic development tools that could be useful for the industry.
PESTEL
Heavenly Palace is an old age home that is run commercially by a company called Heavenly Palace Ltd. It however, is not doing so well and the owners have decided to apply the PESTEL method to the home. It will help in resolving the external factors that affect the company. The PESTEL approach looks at 6 factors. The first is political. The political factors would include the government in power, if there are government policies that favour the company or not (Ralph, et al, 2014). The second factors are economic. The simple fact that there should exists people who are rich enough to pay for the old living in Heavenly Palace is the economic factor. The unemployment rate (due to which it would be hard to get staff), also affects the company as part of economic factors. The third, is social factors, which look at changing family dynamics, which is one of the biggest factors affecting the old age home. The fourth is technological factors, which look at how technology affects the company (Dabbs, 2018). The fifth factor is the environmental factors, which include recycling and carbon footprint, which is important for this company. The last, legal factors, include health and safety, which the company should look at clearly.
5 Forces Theory
The company called Heavenly Palace Company, has another service which provides care to the aged by having professionals in their home. The company needs to find out how attractive the industry is and the profitability of the industry. So, the 5 forces theory is applied here.
The first force is competitive rivalry. In this case, the company will have to look at its rivals and effective and profitable they are. If there is not much competitive rivalry, then the company will make profit. The second force is that of supplier power (Shanas, et al, 2017). There needs to be a supply of highly-trained professionals who can manage old people. Most of the suppliers are nursing schools, but if they decide to stop cooperating, it could lead to damage to the company. The third is Buyer Power. In this case, the company will look at the buyers and how easy it is to negotiate for lower prices from the organisation (Rothaermal, 2015). The more the buyer, the more profitable it is. The fourth factor is that of the threat of substitution. It looks at the substitution that can be done. In this case, there is rarely any substitution that can be done, which makes the company stronger. The last is that of threat of new entry, in which as, an company that thrives on extensive training, will be hard for new companies to enter.
Child-care industry
The child-care industry is at an all-time high, since most people are too busy working to take care of the children. There are two theories that can be applied to this industry.
Diversification
The company called KidZee is an internationally renowned company that acts as a day-care centre for children. Parents are generally office-goes and thus, do not have the time to take care of the children during the day (Ferris and Marchetti, 2017). The company is doing well and they are hoping to expand a bit more. They have decided to use the diversification theory. Diversification would be when a company goes and expands into a field that is not similar to the first field. The company KidZee, which provides services for taking care of children on a large basis, could expand into opening a nursing home, where elders are taken in on a daily basis during working hours and are looked after. This would make the company diversify into fields that are not yet known by the company, since taking care of the elderly requires a new set of experiences and is not the same as taking care of children. Diversification is riskier than the other option, which is integration because it requires the company to step out of their level of experiences and comfort (Bick, 2016).
Integration
KidZee also has another service that aims to provide efficient nannies for child-care to the homes of people. They however, wish to expand and have more companies. This can be done using the Integration theory. Horizontal integration is when the company decides to buy companies in the same field, for example, another company that specializes in child-care for children who are mentally or physically disabled (Berthel and Bourgeois, 2016). This would mean that they are expanding in their own field.
In Vertical Integration, they would choose to buy up a university or college where the nannies are being trained. When the raw materials or goods (in this case the nannies) are being produced by the same company and being used in the same company, it is vertical integration (Kearns, 2014). Both the types of integration are expansion within their own fields and thus, the level of experience needed is not so high.
Conclusion
The companies in the aged-care and the child-care industry are thriving and the application of the strategic management practices should help them further their companies. The aged and child-care industry, while having many companies that work in the field, do not have as many buyers. However, this is rapidly changing and through the strategic management practices, they should be able to expand, and gain more customers who are willing to pay the money to have their children or the elderly taken care of professionally.
References
Berthet, T. and Bourgeois, C., 2016. 10. The national governance of integrated activation policies in Europe. Integrating Social and Employment Policies in Europe: Active Inclusion and Challenges for Local Welfare Governance, p.211.
Bick, A., 2016. The quantitative role of child care for female labor force participation and fertility. Journal of the European Economic Association, 14(3), pp.639-668.
Dabbs, E., 2018. Strategic Analysis of LifeLoop, LLC: Current Positioning and Recommendations for Future Growth.
Farris, S.R. and Marchetti, S., 2017. From the Commodification to the Corporatization of Care: European Perspectives and Debates. Social Politics: International Studies in Gender, State & Society, 24(2), pp.109-131.
Kearns, K.P., 2014. Maintaining Public Trust. Ethics in Public Management, p.265.
Ralph, N., Birks, M., Chapman, Y. and Francis, K., 2014. Future-proofing nursing education: An Australian perspective. Sage Open, 4(40).
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.
Shanas, E., Townsend, P., Wedderburn, D., Friis, H.K., Milhoj, P. and Stehouwer, J., 2017. Old people in three industrial societies. Routledge.