Shouldice Hospital Case Report
MEMO
To: Dr. Byrnes Shouldice, Alan O’Dell
From: An MBA Student
Date: May 09, 2006
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Subject: Problems and Plans - Operational Assessment of the Shouldice Hospital
Thank you for the opportunity to consult on your Shouldice Hospital operational assessment. I understand that you have implemented a well developed focus strategy (market focus and internal focus) successfully and Shouldice achieves outstanding results by maximizing the difference between perceived quality and value to the patient on one hand and the cost of supplying services on the other. The nurses and doctors treat their patients with care and understanding and treat them more like family members. This has led to the high level of praise for this hospital and its treatment. The rising number of satisfied patients and word of mouth referral has led to demand for the facilities services which outstrip the facility’s current capacity. I understand that you are looking for guidance on specific actions in order to increase the hospital’s capacity while at the same time maintaining control over the quality of the service delivered, and the hospital management. I have identified the problems and offered a list of alternate courses of action.
Problem Definition: The problem is that Shouldice is facing a paradox of change. Shouldice is operating at its “best operating level” for a service company with limited flexibility in its facility, a specialized work force but are failing to meet all the demand for its chosen market niche. Adding additional capacity to meet the unmet market need may upset the existing work force and lower service quality. Failing to meet the market demand may invite competition that could eventually cause Shouldice to lose market share and end up with excess capacity.
Problem Justification: It is assumed that they are operating at the “best operating level” because the way the case describes how efficiently
To: Dr. Byrnes Shouldice, Alan O’Dell
From: An MBA Student
Date: May 09, 2006
-------------------------------------------------
Subject: Problems and Plans - Operational Assessment of the Shouldice Hospital
Thank you for the opportunity to consult on your Shouldice Hospital operational assessment. I understand that you have implemented a well developed focus strategy (market focus and internal focus) successfully and Shouldice achieves outstanding results by maximizing the difference between perceived quality and value to the patient on one hand and the cost of supplying services on the other. The nurses and doctors treat their patients with care and understanding and treat them more like family members. This has led to the high level of praise for this hospital and its treatment. The rising number of satisfied patients and word of mouth referral has led to demand for the facilities services which outstrip the facility’s current capacity. I understand that you are looking for guidance on specific actions in order to increase the hospital’s capacity while at the same time maintaining control over the quality of the service delivered, and the hospital management. I have identified the problems and offered a list of alternate courses of action.
Problem Definition: The problem is that Shouldice is facing a paradox of change. Shouldice is operating at its “best operating level” for a service company with limited flexibility in its facility, a specialized work force but are failing to meet all the demand for its chosen market niche. Adding additional capacity to meet the unmet market need may upset the existing work force and lower service quality. Failing to meet the market demand may invite competition that could eventually cause Shouldice to lose market share and end up with excess capacity.
Problem Justification: It is assumed that they are operating at the “best operating level” because the way the case describes how efficiently