Empowering Healthcare Innovation: Oakville Open MRI Centre Business Plan

MRI business has been exceedingly increasing in the past decade. People are seeking out these services which in the past were too costly and quite difficult to find. However, it is important to note that MRI services have also not been as easy to access as they should. Opening an MRI business center therefore seems like a wise and enlightening decision especially where the demand is taken into account. Demand for MRI continues to increase, therefore necessitating the opening of such centers which provide quality decisions. However, like any other business there are other internal and external factors that may affect the business and profit. Often entrepreneurs focus too much on dealing with external factors such as competition and resource sourcing and simply forget the importance of other factors such as pricing and economic situations which are dire to the success of the business.

The strength of a new business is completely dependent on the ability of the entrepreneur to maneuver and factor in all factors that are directly or indirectly related to the business. Pricing of MRI services for example is not simply a matter of an amount that would generate significant profits. It is also important to consider and take into account, the customer needs, the state of the market and the competitor’s rate. When developing a business philosophy, it is important for DR. Hughes to consider the strengths of the business structure, the business idea and quality of product. Based on these strengths the structure of the new business can be easily identified and used to ensure guaranteed success. With the information presented in this report changes can be made to the structure and ideas easier entry into the market.

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Price Elasticity Versus Inelastic

The pricing strategy of the company plays a major role in determining the response of the consumers to the product being offered. The beginning of a pricing strategy requires that the company to engage in research to understand and evaluate the importance of the service being offered to the consumer. MRI services for example are not granted as some form of option, they are often a required necessity. This gives the company more space through which they can maneuver the costs of the services being offered. On the other hand, there are other competitors offering the same which means that guesswork in terms of pricing could indeed become quite costly to the business in terms of the target market and attracting the right clientele.

Perhaps the most important thing to note is that price is often used to communicate quality of the service being offered. On the one hand when a service is too costly according to the consumer standards the market may not be able to access the same service. On the other hand when MRI services become too cheap, consumers are likely to think that the quality is low according to the market standards. MRIs are related directly to the health of an individual which is the one area where people are often unwilling to compromise. When it comes to the health of a person, quality speaks much more than cost. People need to be able to afford the MRI services while at the same time getting quality for what they are spending. For this reason, pricing of the product needs to be based on the fundamentals of pricing elasticity.

Price elasticity

Price elasticity often works when the company seeks to determine how price will be affected by changes in demand. MRI services are not usually based much on demand since the demand is mainly based on the suspicion of disease. However, like with any services being offered there are often fluctuations are often present. The problem is that when fluctuations occur, the company can be caught off guard. These fluctuations often lead to increased losses and can provide loopholes for competition. In the case of demand, the biggest sensitivity is often towards price changes. Even for the most loyal of clients, any changes in price could lead to increased fluctuation of the demand with customers either creating an increased demand or reducing the demand. Price elasticity is the biggest and easiest way to regulate and determine the right price. It allows the company to adjust significantly to any changes in the demand. When calculating the elasticity, results of the calculation are often easy to identify and calculate.

For each company, including the MRI Company the important thing to note is that the products can remain inelastic. Inelasticity allows the products to increase demand even when significant changes are made to the pricing strategy. Whether the price increases or lowers, demand remains stagnant increasing because the product is ideally one that is a complete necessity. The basic element is that there is a desire to have clients who whether through simple marketing, advertising or pricing, the service offered by the company should be such that clients cannot survive without the services being offered. This means considering the needs of the different target markets and adjusting accordingly.

Considerations and advantages of price elasticity to the center

MRI is a necessity and not a luxury: this is an important consideration, where services are concerned. Elastic services include luxuries which one can do without. The MRI services fall into the two categories of both elastic and inelastic. On the one hand, MRI is often used to identify conditions which cannot be merely construed using simple x-rays and other methods of determining diseases. However, there has been an increase of lectures, articles and academic research which is determined to reduce the use of MRI in determining the nature of disease and injury. On the one hand therefore, MRI’s are quite the necessity while on the other they may be considered a slight albeit very slight luxury.

Another aspect to be considered is that the Oakville Open MRI clinic is not the first of its kind within the targeted market. There exists at least two other competitors offering quite similar services. This means that while the MRI services maybe a complete necessity, making the pricing more inelastic, the existence of completion means clients can opt for one or more centers making the demand more elastic and therefore the pricing. Through simple marketing strategies it is possible to set apart the MRI center from the competition. However, fluctuations in demand are more likely even though the product is a necessity. When it comes to provision of necessary services, entrepreneurs may fail to consider the slight chance of demand fluctuation brought on by changes in pricing. This could lead to detrimental pricing mistakes which in turn are quite costly to the growth and survival of an expensive venture such as MRI centers.

Competition and substitution: as mentioned above, demand is often fluctuating in necessary services simply because consumers and clients can either get the same service from competitors or in fact substitute the same service. (Mowen and Minor 1998) gives an example of sandwiches which are a popular lunch option for the working class. Majority of the working class are often eating sandwiches sometimes on a daily basis. The working class accounts for at least 85% of the target market of the sandwich chains. Despite this dependence which often translates to the sandwich being a necessity, when one chain increases the price of a sandwich by even a small margin, the consumers often do a massive shift to the substitute or alternative offered by the competition. This translates an inelastic market to one which is in fact quite fluid with the demand for a product being dictated by the pricing of the same product.

When it comes to the MRI services being offered by the clinic there is not only need for differentiation but also the desire to create a unique gap which competition may find hard to deal with. This unique niche gives the company more leeway when it comes to setting the price of the products. In addition, price increases and decreases should be well thought out. Increasing the price of MRI services may seem ideal but in the same way, it is most likely to drive consumers away. In this elastic market, the idea for Dr. Hughes is to find a unique standpoint, something that competition is not offering something that would either justify increasing costs or at least make the move of clients more costly.

What is the actual cost of an MRI: in the current market consumers are often faced with varying prices when seeking MRI services. In one place the services could be costly mainly because of the nature of machines used and even the ambience of the center. The important thing is to determine the actual cost of the product being offered in the market. With the actual cost, there are less chances of fluctuation.in considering the actual cost, it is important to take note of the psychological pricing. While the price of an MRI may not fluctuate by much, increase in cents on the purchase of necessary tools could easily make a significant change to the pricing. The change though small when distributed to the products, could easily become highly costly. Small changes make the product seem much more costly to the consumer. (Anderson and Poulfelt 2006) states that a product which costs $99.99 is usually attracting more consumers than one which costs $100 simply because the psychological notion informs the consumer than one is way much cheaper than it actually is.

All goods in the marketing during the lifetime of the business become elastic at one point or another. What is most important to note is that consumers will definitely and often in many cases find an alternative and substitute for the current product. For example an increase in the cost of an MRI may in fact cause allot of grumbling while consumers still continue to seek out the service. The dissatisfaction however will lead to seeking out alternatives that are much cheaper and more stable in terms of pricing.

Demand For Open MRI Services

(Reisman 2002) states clearly that when we are born we inherit a good amount of stock in terms of health. This stock can be equated to the simple assets that are bought. When an asset such as a car or even building is bought it comes with a stock of good health. It requires little if any maintenance or service. As it ages however the demand for maintenance services, repair and management increases. The same holds true for our own health, as we age the body begins to demand that the depreciated health factors are taken into consideration. This increases the level of demand for various healthcare services. Taking this into consideration therefore, it follows that as we age we begin to have a need for and seek out open MRI services which can be used to detect conditions and injuries that beginning to take over our bodies.

An analysis of the above theoretical assumption on the demand for healthcare services and as such open MRI services reveals the following:

• As a human being continues to age the rate of depreciation in terms of health increases. They become more susceptible to diseases and conditions which decrease their productivity and the body’s ability to heal itself.
• As the rate of health depreciation increases, people become more willing to invest high amounts of money to offset the process. The cost of treatment does not seem to matter with people moving heaven and earth for the simple hope that they can turn the clock.
• As the general income of the target market for open MRI increase, the more people are willing to spend on the service.

Factors affecting demand for MRI services

Income of the target market

When it comes to healthcare it is often common for entrepreneurs to make the wrong assumption that individuals will pay anything to get a cure. They simply ignore external factors to the business such as income of the target market. It is true that individuals are often more than willing to pay as much as is demanded in order to get a cure. However there are two factors to take into consideration when it comes to income and MRI demand:

• MRI services are often employed as a form of prognosis rather than treatment. Open MRI is often used to determine the condition which the individual seems to be suffering from. In many cases it is an option as opposed to other forms of detection. Based on this therefore, it is possible that many people may feel they cannot afford the cost of the diagnosis and therefore opt to do away with the same.
• MRI services occur before the individual is instilled fear of the rate of depreciation in the body. Without an MRI many people would go on and continue with life blissfully unaware of the rate at which their bodies are depreciating. Because they are unaware, they are often less willing to spend much when it comes to the service. In fact many consumers and patients often see the MRI as a service that has been forced on them by the doctors.
• MRI services are shrouded by a coat of ignorance with very few of the targeted consumers understanding the importance of the service. The lack of knowledge heavily influences the desire of consumers to spend their income on the service.

Complementary services

Normally, consumers do not in turn just walk into a center and demand MRI services. With this type of healthcare service knowledge is vital. In the past, during the first ages when MRI was used, the services were exclusive to specific large institutions which could afford to maintain and purchase the required machinery. In addition, there were very few if any individuals who could understand the results drawn from the MRI. As such consumers often remained in the dark, unaware of the importance and vital usage of the MRI services. Today, there is still a large number of consumers who remain unaware of the role that MRI services can play in diagnosis and early detection of diseases. Complementary services are services which must be used concurrently with the service being offered. The demand for one service is therefore directly related to the demand for another service. In the case for MRI services there are two distinguishable and important services.

• Doctor’s services are the first creator of demand. When patients feel unwell, they first go to the doctor where suggestions of an MRI are made. Doctors are therefore responsible for recommending the service and in some cases recommending the particular center where the MRI should be taken.
• Once the MRI has been done, there are experts who can interpret the results. Sometimes these are the doctors and sometimes they are not. Either way, a center which lacks someone who can skillfully decipher the information in the MRI is often left with little if any form of demand. The MRI makes no sense if no one is aware what it has brought forth.

Substitutes and competition

Oakville as a county lacks open centers and this will be the first open MRI center which in itself opens a high level of demand. However, just because it is the only open MRI center doesn’t mean that there is no competition. On the one hand, there has been increased focus on the dangers and possible challenges of being subjected to MRI. Studies have shown that sometimes MRIs can lead to the development of complications that were previously not there. There are those who indicate that the data and information from these studies is skewed. However, the fear created by such results has led patients to seek out alternatives. MRIs have become the last option rather than the first choice in terms of diagnosis. Doctors who are proponents of the dangers of MRIs are often influencing patients to learn and seek out alternative diagnosis measures.

Secondly, there exists a similar center although it’s is quite a distance. Unfortunately, the Memphis center itself is quite large and popular drawing clientele from all over the state. With the high demand, the center is often able to cut the costs of its services significantly something which the new Oakville open MRI center may not be able to sustain. Competition therefore becomes an important factor. Furthermore, there are tests which though best done in an open MRI center can also be accomplished in the many closed MRI centers which are all over the county. Such services are often more popular and in high demand throughout. When it comes to pricing and market share therefore competition will heavily influence demand for the product.

Available consumers

The healthcare industry is one which the number of available consumers is always present even though it is often fluctuating. Fluctuation is simply because of the nature of health. When people are more exposed to toxins the demand for healthcare services and therefore MRIs is quite significant. The Oakville County is one in which the baby boomers generation is in plenty. This aging population is susceptible to injury and illness. Considering that there is no other open MRI center the demand for the service seems to be already set. However there are several factors to take into consideration when determining the availability of consumers for MRI services:

• The already available consumers need to have the knowledge and awareness with regard to the importance of MRI services. For this generation MRI is a service they might as well do without. Without the right knowledge they become unwilling to spend on the service. In this case, the target market and consumers are available but they are not taking advantage of the product.
• The availability of the consumers today does not automatically translate to availability in ten years. There are chances that fewer people will need MRI services in the future and even greater chances that competition may open a center in the future further decreasing the demand for the services.
• The service itself must be such that consumers feel they cannot do without the service. This creates its own level of demand and allows for word of mouth marketing. Advertisements and marketing can only go so far, consumers who experience the product are better tools of educating others and making them aware of the availability of the service.

Factors Influencing The Supply

Price of the factors of production

It has already been established that Oakville County is an area ripe with demand for open MRI services. Since majority of people are often unwilling to compromise when it comes to their healthcare it follows therefore that they are more than willing to spend to ensure their won health. However, there have been few if any attempts to increase the supply of Open MRI despite the existing demand. (Leenders 2006) states that one of the most major considerations is the importance of inputs. The cost of inputs in providing a service can put off even the most willing of investors. Factors of production in the provision of MRI services can be divided to the following:

• Machinery and tools: MRI works best in diagnosis simply because of the machinery and tools employed to determine ailments. These machineries are often quite costly with many having to be imported. In the past for example, only large hospitals could afford the cost of machinery that would support an MRI center. The machinery and tools are highly differentiated for the diagnosis of various ailments. It follows therefore that the expected cost of investment would be very high. In some cases, it is often too high for individual investors to consider especially because the profits and return on the investment may not be quick, immediate and sustainable.
• Unlike other services which can be provided, executed and managed by any individual, MRI services require trained experts. There are doctors who though understanding the importance of the tests and often recommending them cannot attempt to successful diagnose an ailment with the MRI machinery and tools. Often they may also require help in understanding and interpreting the results in order to advice on the best method of treatment, medication of the ailment or therapy. Unfortunately, the demand for radiologists and such experts is quite high making provision of the service quite difficult. Even though the machinery maybe available, if there are not experts to make use of the same then the investment is null and void. Increased human resource flow due to the demand of the skill can also prove to be detrimental to the supply of the services.

It is clear that the input required for the provision of MRI services is not only costly, in terms of purchase of machinery and payment of experts, it is also low in terms of supply. This makes provision of MRI services quite difficult.

Government policies and regulations

The healthcare industry is one of the most heavily regulated and restricted industries in the country and globally today. There are more and more regulations which some up daily to protect the consumer. Concerns have been raised that whereas the consumer is heavily guarded the institutions themselves are not well protected and are often left to suffer many consequences which come from exposure. Restrictions are important because of the importance and value that is often placed on the health of human beings. However, this often means that investors who have spent greatly in terms of acquiring the right equipment, tools and expertise to run an MRI center may have to spend even more in terms of meeting the regulations and restrictions of the government. Restrictions are often placed with regard to:

• The number and type of employees who should be within the center as long as it is open. Should the entrepreneur e unable to support the number of employees, then they are not allowed to operate curtailing the supply of the service. Further, there are some skills which are difficult to come by with very few institutions providing training and therefore even fewer experts who are required according to law to be within the center. The cost and difficulty of finding these employees makes supply of the same product and service quite difficult.
• MRI services cannot just be provided from any premises. Due to the danger of the rays transmitted from the machinery, the government has laid out requirements in terms of space and design of the center. This often translates to increased cost especially in terms of space which is why many of the open MRI centers are often located in large hospitals which can afford the space. On the other hand, it is also quite difficult to meet the architectural requirements of the space often specified in government manuals. The space may have to have been built originally as an MRI center which is quite difficult or be re-designed to fit the purpose of the provision of MRI. Either way, the difficulty is accessing the right premises limits the desire to invest in MRI centers.
• Licensing and the constant need to upgrade in order to remain relevant and legal is an issue that limits the number of people willing to invest in this kind of business. If the requirements are not carefully considered, it is quite possible to be operating an illegal center.

Impact of utility on demand of MRI

Utility is interpreted with regard to how much satisfaction a consumer gets from a particular product. When a consumer experiences a product for the first time, this experience often provides a background , a foundation to which the consumer returns in order to make a choice for later use. Businesses often strive to give the consumer greatest satisfaction with the first trial. Utility is often the measure of satisfaction of wants and needs by the use of the product. In this case, consumers often try to access open MRI for the simple reason of diagnosis. A complete diagnosis, which includes all the facts therefore meets the utility demand for the services of the product. The following are some of the potential effects of utility:

Understanding the value of the product: to the business, MRI has great value and this is why they seek to provide the said service. However, it is also important to note that the consumer’s value and the value of the business can be completely different. In order to engage in productive marketing, it is important to understand the value of the service to the consumer. Utility allows the business to understand exactly what they can expect from the service, how close the service comes to meet their needs and the role that the service plays in the life of the consumer. When a product has great value to the consumer, they are more willing to pay for the same increasing demand and market for the product.

Explains demand: there are many factors that affect demand but the best in explaining demand is the utility theorem. When consumers are highly satisfied with the services of center, they are more willing to not only spend on the same product but also to encourage others to pay for the same services. The utility factor also explains the negative slope of demand. With the introduction of a new open MRI center, the first and only one in the region, demand will definitely be high. But as consumers make use of the product, the demand begins to decrease becoming lower. Continued use makes the demand and desire to use the service much lower, consumers begin to seek out alternatives and substitutes and indeed find ways through which they can probably avoid the service. This decreases demand significantly, a factor which the company should be prepared for.

Determination of optimum consumption: this is the highest level of demand, where the demand is not only sufficient but indeed ideal for the business. At this stage the business enjoys sufficient profit and income to not only manage costs but also to expand. Optimum demand can only be achieved when the products ideally address the needs of the consumer completely. This means that the consumer has no desire to seek out other alternatives but is indeed completely satisfied with the service offered by the company. Consumers therefore desire to consume the product which meets all their needs.

Management of profits: profit is created when the sales value is much higher than the input and cost of providing a service. For the MRI center the cost of providing a singular service can be quite costly, however as the service becomes useful, it creates its own demand increasing the probability of making profit from the same product. Profits are often managed through creation of increased demand which maintains the profit level. With increased demand growth becomes a reality rather than simply a goal. There is an increased chance of creating a niche with more profits. Where the peak demand for MRI services remains unchanged, the return on the investment though high is quite possible. On the same level, there is the possibility of using the peak demand to bring about greater growth and stabilizing the performance of the business. Profits during peak demand are maintained to be used during the times of low demand so that the business does not suffer unduly. In this way, during the low demand season quality services are still available to the consumer at the same cost without hurting or injuring the survival chances of the business.

Meeting consumer needs: when the utility of the business is high, it simply translates to the business being able to meet the consumer needs. A business that meets the needs of the consumer directly is able to maintain a high demand and create its own niche which completion cannot meet. A niche is often created to give the business greater advantage over the competition. A niche allows the business to get the advantage of higher income without investing as much as the competition. This is often known as the law of increased value for much less. What happens is the company invests more in the simple aspects of the business, those aspects which meet the specific MRI needs of the consumer. In doing so, profit is generated from the uniqueness of the service being offered.

Managed Care And Demand

Managed care is deigned to decrease the cost of healthcare while at the same time ensuring that all patients receive basic, quality healthcare. The demand for healthcare services in itself is quite high with consumers seeking to improve their health deficiency rate. However, the cost of healthcare has previously been a misguiding factor when it came to accessing healthcare. Majority of the people who need healthcare can barely afford basic care. MRI services for example are often found to be beyond the average affordability rate for a good portion of the population. For the MRI center, becoming a center of managed care is one of the ways to ensure a steady demand for services. While the payment maybe lower, it would be more efficient to increase demand and maintain the same even in the low demand season.

Lower costs: the managed care is often designed to ensure affordability of the services to every individual. MRI services have often been found to be quite costly. Being a first step in diagnosing illness, MRI is quite important. Despite the importance, it is possible that patients will not be able to access the service in good time. The lack of affordability on the other hand also ensures that the demand for the service is often low and continues to become lower as income decreases. Managed care allows the service to become affordable thereby increasing demand, (Harris 1998).

Accreditation: when the Oakville open MRI center successfully becomes part of the managed care system, it will gain free accreditation. Accreditation is the one way to gain publicity and therefore trust of the consumers. Consumers are more likely to engage with a service provider who has been accredited by the government. When it comes to health, individuals are less likely to rely on publicity and advertisement in selection of a place where they can be diagnosed and treated. The government is often partnering with centers that provide services which are of high quality. The process of vetting the clinic is quite long and tedious. Only the best of the best are allowed to partner with the government. Credentials are carefully analyzed not just for the clinic but also the employees within. The process gains trust of the consumers increasing the demand for the services offered within the clinic.

Management of the pricing: perhaps the biggest concern for the company and clinic is the pricing strategy. With MRI services guesswork cannot work, a simple but clear strategy needs to be employed to ensure success in attracting consumers. When the services become too costly, despite their importance and the availability of the services still many more will have a hard time accessing the same services. Managed care allows all people to have access to the services. Considering that the clinic is the first and only one offering open MRI services, it is likely that the ensuing demand from managed care will increase the income significantly. Such income increase will indeed justify the lower costs that are charged to through the managed care system. Pricing is already determined through the managed care system. Because the pricing agreement has been reached so that the clinic can continue to get profits while at the same time ensuring that all patients can afford, the continue to be competitive the clinic can continue to offer excellent quality services while maintaining affordability. Clients therefore have more reasons to visit the clinic.

Approval systems: the managed care system often relies heavily on approval. For a cost to be deductible, it must be approved. Two aspects of this affect the demand of the services being provided any the clinic. First, the process of approval sometimes may take much longer than expected. As such clients are more likely to move on to other centers where the payment maybe higher but the service will be provided immediately. There are cases where the patients are not willing to wait for the approval, especially where they have encountered a health scare which is often almost always. This means that demand will lower very greatly where the approval process is quite strict. Secondly, it is also important to note that despite the waiting, there are cases where the MRI scans may not be approved. In this case, patients often take out their anger on the clinic rather than the managed care institution.

Restrictions and privacy: there are cases where the individuals clearly do not want to visit the clinic simply because it is under managed care. This is especially the case where they feel roper restrictions have not been made to ensure the privacy of the information they will give to the clinic. The clinic must give details of the procedures the patients have undergone to the managing institution. Majority of the people feel that such information should be private. Demand therefore lowers as individuals attempt to protect their privacy.

Financial Analysis

The financial analysis of the company includes some assumptions which have been made with regard to the proposed MRI business. To begin with, the past decade has seen a sharp increase in interest rates. Borrowing of capital, mortgage and general financing of the business investments has become a very costly measure. It is expected that even though there was a significant increase, the analysts and business experts indicate that measures taken by the government to reduce the interest rate are working and will indeed lead to a stabilization of interest rates. The current interest rate stands at 10% and it is expected that the long term interest rate required to finance the business will stand at the same for a long time. Secondly, the government and especially state governments have been striving to create an atmosphere where investment is likely to yield higher profits. To encourage new entrepreneurs and also boost the growth of the economy through business ventures such governments have focused on stabilization of taxation rate. Currently, the Memphis center pays at least 30% of the total income to taxes. The same is expected of the Oakville center although the percentage is expected to decrease by year five of operations.

Projected profit

(Forsyth 2002) states that no new business will be able to make any plans and indeed prepare for the unexpected if there is no significant idea as to what they are working towards. Project profit allows the entrepreneur in this case Dr. Hughes to determine what amount of income is sufficient to reach the breakeven point and surpass it. According to the financial reviews provided by the Memphis center, sales have decreases in the past few years. The decrease in income suggests that reaching the point of break-even maybe more difficult. However, even with decreased sales, the proximity of the center which is much nearer than Memphis is likely to attract the right clients. Income sales projections are therefore expected to increase in the next few years. In the first year, the business does not expect to make any profit, in fact the business projections cushion against expected loss. The loss is mainly due to the fact that much investment will be made in terms of purchasing tools and machinery and hiring the right expertise. The expenses will therefore supersede the expected income. However for the next few years, the company is expected to make some profit, sufficient enough to increase growth and make the MRI Company quite competitive.

Administrative costs as seen in the table above will be quite high in the first year. The projection is based on the costs that will be needed to begin providing MRI services. These include hiring new staff, making stationery purchases and registering for the required licenses. These administrative costs could also include training for the new staff in management of an MRI clinic. As such, the projected loss for the first year can be accounted for by the expected expenditure. During the second year, majority of the costs will be based mostly on replenishing what was first purchased. The cost therefore significantly decreases to 60% allowing for the first profits of 3.2% to be experienced.

Future expected investments

The Memphis open MRI center boasts more assets and publicity as compared to the center opening in Oakville. The state of technology continues to change especially when it comes to managing health care. It is expected and projected that changes will continue, with new and fancier ways of completing MRIs being discovered. At the current state, the pursuit is for faster and cheaper MRIs for each institution. With such discoveries there are several investments expected in the future and that will impact significantly on the financial status of the clinic:

• Purchase of new tools and machinery: in the next five years the machinery required for MRIs may remain the same, however the simpler tools for day to day operations are expected to change significantly. With the changes, clients will be drawn to the clinic that is a leader is adopting the changing policies and as such providing better and more unique services.
• Training for staff: a significant error has been noted in the operations of the Memphis MRI clinic. Much of the staff remains with the original training, having not updated or even improved their skills. The result is that the services are almost always of lower quality and tasks are pricing difficult to perform especially where changes in tools have been made. Instead of hiring now staff every time there is a change, the Oakville center will instead focus on training the current staff to ensure they are highly equipped and strategically placed to manage any changes.
• Software: perhaps the biggest and most significant investment to be made will be in terms of software used to deliver services to the clients. Whereas the current software is highly placed within the market, there are newer and better software being produced daily. It is expected that the business will indeed need to invest periodically in changing the software. This will allow the clinic to serve clients much better and faster. With high quality delivery of services, the clinic can expect to rank highly, attract a variety of new clients and make significant increases in income and profit.

Valuation of the business

This is mainly highlighting some of the strengths that the business has which can have a financial advantage to the business. Although there exists another open MRI center and several closed MRI centers within the proximity of Oakville center, there are several advantages that the center has in comparison, these include:

• Proximity: the new Oakville open MRI center will be the first of its kind within the county. There exists another center but it is 200 miles away. This center will therefore have the advantage of being the nearest and therefore most recommendable center for the residents.
• State of the art machinery: the Memphis center continues to rely on machinery that has not been recently updated. The Oakville center has the advantage of starting out with high quality, state of the art machinery. This will allow for faster and more efficient delivery of services.
• Expertise: having worked and held a career as a doctor for a long time, Dr. Hughes brings with him a wealth of expertise upon which the success of the center will be based. Clients and customers are more likely to trust a center run by a doctor. This provides free publicity for the clinic ensuring its success in generating income almost from the start.

References

Andersen, M. M., & Poulfelt, F. (2006). Discount business strategy: How the new market leaders are redefining business strategy. Hoboken, NJ: John Wiley & Sons. Bottom of Form

Forsyth, P. (2002). Business planning. Oxford: Capstone Pub.

Harris, J. S. (1998). Managed care. Philadelphia, PA: Hanley & Belfus.

Leenders, M. R. (2006). Purchasing and supply management: With 50 supply chain cases. New York, N.Y: McGraw-Hill.

Mowen, J. C., & Minor, M. (1998). Consumer behavior. Upper Saddle River, N.J: Prentice-Hall.

Reisman, D. A. (2002). The institutional economy: Demand and supply. Cheltenham, UK: Edward Elgar.

Herman Bailey

With a student-centered approach, I create engaging and informative blog posts that tackle relevant topics for students. My content aims to equip students with the knowledge and tools they need to succeed academically and beyond.