Strategic Analysis: Evaluating Relocation for Business Growth

This case study explores the financial and strategic considerations for a business deciding whether to stay in its current metropolitan area and renovate its existing facilities or relocate to a suburban area. The analysis weighs the pros and cons of each option, considering factors such as the cost of renovation versus relocation, market share, return on investment (ROI), debt management, and the potential impact on profitable programs. The study suggests that staying in the current location and renovating is the more financially prudent decision, given the significant cost difference between the two options and the importance of maintaining financial stability before undertaking major changes. It emphasizes the need for regular financial planning and adaptation to market changes to remain competitive.

ASSIGNMENT

PROS AND CONS FOR STAYING IN CURRENT METROPOLITAN AREA
As the amount received from selling old property would not be enough to cost relating to new
facility in suburbs. Thus, in case they remain in current metropolitan area they would be able
to establish key financial policy targets. In order to make data useful it is necessary to
emphasize on key target areas else the same becomes overwhelming and useless (Stephan,
Patterson, Kelly and Mair, 2016.). The fact cannot be denied that survival does not depend on
moving; rather it is based on enhancing ROI as well as keeping lower debt and boosting non-
operating sources of equity. Moreover by staying back and renovation the organization they
will be able to keep debt low and will boost profitable programs. It is the most appropriate
manner through which the organization can elevate their profit and overcome financial crisis.
The negative side which will be faced by the organization in case it stays in current
metropolitan area is that they will continue to have lower market share and will have to
reduce the return percentage in order to sustain for long time. Further, no guarantee exist that
if services are improved and renovation is made that client will come.
PROS AND CONS TO MOVING TO A SUBURBAN AREA
In case they relocate they will be able to resolve the issue relating to upsurge in lower cost
retirement facilities which is being built in suburbs. Further, they will be closer to population
which require their high quality services and will gain market share. However, the significant
negative side of the issue relating to moving decision is financial and emotional issues
relating to same. Due to same reason it is believed that they are ignoring financial
implications and taking decision in panic. In order to take decision whether to move or not, it
is necessary to assess financial as well as economic perspective for appropriate decision
(Küpers, 2016). In present case as insufficient funds are available in order to relocate the
organization than it might be possible that the company might require sacrificing some
desired programs in long run.
DECISION
As a big contrast exists in amount required for renovating old property i.e. $15 million and
cost for relocating is approximately $65 million, it is appropriate for company to stay in
current metropolitan area and renovate the asset in order to take decision through assessing
financial perspectives. Moreover, one is required to be financially strong before taking
initiative regarding big change i.e. relocating organization. Further, in order to stay in

competition it is more appropriate to accept changes as per the need and update financial
plans on annual basis.

References
Küpers, W., (2016). A handbook of practical wisdom: Leadership, organization and integral
business practice. Routledge.
Stephan, U., Patterson, M., Kelly, C. & Mair, J., (2016). Organizations driving positive social
change: A review and an integrative framework of change processes. Journal of
Management, 42(5), pp.1250-1281.