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Business Management Estia PDF

   

Added on  2021-04-21

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Running head: BUSINESS MANAGEMENT ESTIABusiness Management EstiaName of the Student:Name of the University:Author note:
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1BUSINESS MANAGEMENT ESTIAQ1.Estia Health Care uses growth strategy along with the cost leadership strategy to helpit achieve business and corporate objectives (Hill & Jones, 2010). Estia Health Aged care is apublic listed company based in Australia. The company specializes in taking specialized carefor the aged. Estia was formed in the year 2005 at presently,its one of the largest residentialaged care providers in Australia. It has 68 facilities,and it operates in more than 5,900 placesacross Australia. The company has at least 7,000 employees who work at various facilitiesacross the country. From the analysis of the strategic corporate strategy,it is clear that thecompany uses cost leadership strategy. Estia health outsources its manufacturing to ensurethat the company minimizes cost. Outsourcing helps the company to focus on its coreactivities. Manufacturing would otherwise be so costly for the company because it means thatthe company would not enjoy economies of large-scale production (Geel, 2011). Theobjective of the strategy that it uses is to offer all customers affordable and specialized agedcare which is tailor-made for their personal needs. This leadership strategy involvesminimizing the cost of production or cost of providing goods and services. Estia Health Careuses the same. There are four types of generic strategies. They include cost leadershipstrategy, differentiation strategy, cost focus strategy and differentiation strategy. For a firm tocompete effectively in the market, it is important that the organization chooses one of theabove generic strategies. Using the strategies helps an organization to position itself in theindustry which helps it to gain substantial market share. The cost leadership strategy wasdeveloped by Michael Porter. The strategy is all about ensuring that the company offers itsgoods and services at the lowest prices. An organization using cost leadership strategy offersgoods and services at lower prices than those of competitors. The strategy is highly effectivein gaining market share. The strategy is used as a marketing tool by most organizations but itends up failing since maintaining low cost is a difficult task. The management team of the
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2BUSINESS MANAGEMENT ESTIAorganization has to constantly work to ensure that the costs are low while at the same timeensuring that the products and services offered are of superior quality. Estia Health focuseson maintaining low costs for customers while at the same time offering specialized healthcare for the aged (Braithwaite, Makkai& Braithwaite, 2007). By managing its inboundlogistics,the organization ensures efficiency in all its operations. The organization can be ableto source for cheap and high-quality raw materials used in manufacturing. By managinginbound logistics,Estia Health ensures wastage of resources is minimized and hence helpingthe organization to maintain low costs. Supply is made more efficient and also the cost ofstorage of commodities remains low level ( Freeman, 2010). The organization has alsoinvested in technology to keep costs of running the organization low. Cost leadership strategyhelps an organization to attract many consumers who are price sensitive. It helps thecompany to gain a competitive advantage over its competitors and hence its ability to gainhigher market share. Estia Health is also able to maintain low cost by marketing its productsand services. It can, therefore, be able to balance its marketing expenses since it understandsits own financial capabilities better (Hill& Jones,2012). The cost leadership strategy appliedby Estia as well as consumer-focused goods and services has made the prices of the serviceslow and hence has attracted many customers.Despite the fact that this strategy is difficult to implement, it has various advantagessuch as higher profitability for the organization. Estia Health is an organization whoseprimary objective is to make profits while at the same time offering high quality aged careservices. Since the organization attracts many customers, the revenues are higher, and hencethe profits are better. The strategy is also more sustainable in the long run compared to othergeneric strategies used in strategic management.It is because an organization using the costleadership strategy can survive tough economic times since they the organization is used tooptimizing efficiency.
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