Strategic Analysis of Regis Aged Care: Report on External Environment

This report provides a strategic analysis of Regis Aged Care, an Australian aged care provider. It begins with an introduction to strategic management and its importance in analyzing the business environment. The report then provides a background of Regis Aged Care, detailing its services, financial standing, and geographical reach. A macro-environmental analysis using the PESTLE framework is conducted, examining the political, economic, social, and technological factors affecting the company. The report identifies key opportunities, such as government support and expansion potential, and threats, including competition and regulatory challenges. Porter's Five Forces model is applied to assess the industry's competitive dynamics, evaluating the threat of new entrants, bargaining power of buyers and suppliers, the threat of competitors, and the threat of substitutes. The analysis concludes that Regis Aged Care faces both advantages and challenges in the residential aged care industry in Australia. The report uses various sources to support its findings.

Strategic Analysis

Strategic Analysis 1
Introduction
The procedure of examine, summarizing the business environment is called the strategic
management. Strategic management helps the company to implement the strategies after
analyzing the business environment. It is necessary for the company to analyses the environment
before developing the strategies. Different tools and frameworks of strategic management helps
to analyses the business environment and these are SWOT Analysis, Porters Five Forces
Frameworks, PESTLE Analysis and many others (Trigeorgis, and Reuer, 2017). In this report,
the topic of “strategic management with the different techniques” will be discussed. In this paper,
Regis Aged Care has been taken into consideration to analyze the external environment of the
organization that affects its business.
Background of the company
Regis Aged Care is an aged cared provider in Australia. The owners of the organization are
Bryan Dorman and Ian Roberts. The company serves the aged care services to old people to
helps them in living their life according to their own rules. It has around 25 years of experience
in the hospitality industry. Its financial situation is also strong as it earned 50730 million at the
end of the year. The company provides the services to people such as respite care, palliative care,
specialist dementia care and Ageing-in-place. Apart from it, the company also provides the
dementia Care, transitional Care and many others that help to improve their performances. It
operates the business in wide range of geographical areas such as Victoria, Western Australia,
South Australia, Tasmania, Northern Territory, Queensland, and New South Wales. The business
has huge scope in spreading the business in the market and also provides the health care services
to the people for their cure. The company has around 63 aged care stores across Australia that

Strategic Analysis 2
take care of old aged people. It offers these services in different ways such as personal service
like Club Service, Reserve and Classic facilities to help them by making their services
comfortable (Regis Aged Care, 2019).
Macro-environmental Analysis
PEST Analysis
Political: Political factor defines the government decision and regulation those are taken for the
protection of the consumers. Australian government always takes the favorable decision for the
care centers so that they perform their duties appropriately. The government also provides the
subsidies to these organizations and apart for it, the government also provides the financial
support to the residential care centers. Australian Institute of Health and Welfare assists
residential aged care centers by providing them financial services (Australian Government,
2020a).
Economical:
In the year 2019, the GDP rate of Australia is $1.89 trillion as it is a highly developed economy.
Australia is also known for its wealth services as it is one of biggest median wealth per adult.
Australian government supports the residential aged care centers by providing free facilities,
subsidies and also funding them in terms of charities and donations. The government of Australia
also provides the money to people for their help in financial terms (Australian Government,
2020b).
Social:

Strategic Analysis 3
It has been evaluated that the people above the age of 65 year used the residential aged care
services. It is determined that the most of the old age people get the services in which 45% of
men and 60% of women. In terms of percentage, 5.6% of people of Australia get the residential
aged care services. The percentage states that the industry has huge scope in the market to grow
the business (BMC Geriatrics, 2016).
Technology: Development and innovation are the factor of technology that helps to improve the
aged care services. Innovation and creation helps to improve the services of care industry by
developing the software and machines as it increases the effectiveness and coordination of care
(Australian Medical Association, 2020).
Key factors of opportunities and threats
As per the analysis, it is observed that the company has the opportunities as this industry has
huge scope to grow and also has a threat to drive the business as its external environment affects
the business and these are given below:
Opportunities
Government support:
It has been analyzed that Australian government supports the aged care industry by financing
into it to provide the appropriate services. This analysis states that the company has the
opportunity to drive the business smoothly as the government supports the business.
Expansion: The industry has huge scope in the Australian market and also has the government
support due to which the company has the opportunity to expand the business at the international
level (Ginter, Duncan and Swayne, 2018).

Strategic Analysis 4
Threats
Competition: The Company has high threat of competitors as there are many private
organizations and government organization that provides the services. Government of Australia
also supports the companies due to which the companies spread their business at the wide range
due to which the competition has been increases.
Rules and Regulations: It is not easy for new entrants to enter the market as the government put
restriction on the entry of social service companies. There are various rules and regulation those
are announced by the Australian government in order to reduce the frauds in the market or to
provide the fair services to the people.
Porters Five Forces Model
The threat of new entrants:
Degree of threat of new entrants is low as it is difficult for the companies to enter the market.
The aged care companies have to take the permission from the government before establishing
the business to protect the consumers from frauds. It is difficult for the companies to take
licenses from the government as the government always makes sure that it provides the quality
of services to consumers or not.
It is observed that consumers always prefer to take the services of high brand image of aged care
center instead of new entrants. It has been seen that new entrants also face the challenge of brand
image of existing companies as the existing companies have high value of brand. It is a challenge
for the new entrants to beat the existing companies in terms of competition that’s why; it can be
said that the threat of new entrants is low (Mukherjee, 2018).

Strategic Analysis 5
Bargaining power of buyers
Bargaining power of buyers is high as the government also develops its aged care center to
provide the services in low cost or in free. Private Aged care center are also provides the similar
services due to which the buyers have many options to take the services from the different
centers. It is a social service those are provided by the organizations to the people to help them in
maintaining their health that is why; it is difficult for the people to select the best center. People
always prefer excellent quality of services from the organization in the exchange of money but if
government provides the similar services in low cost or in free then people have two choices
whether it take services from private care center or government care center. Two or many
options for the people increase the bartering power of consumers.
Bargaining power of suppliers
The negotiation power of suppliers is low as there are many small and big organizations in the
market that supplies the goods and services to care centers according to their needs and wants.
Medical, household and the others are the main suppliers of the company as the care center uses
medicines and household goods to take care of people. As there are many suppliers in the market
due to which the company has many options to purchase the goods and services from different
suppliers. The switching cost fee is also less due to which the care centers can shift from one
supplier to other suppliers. It is also observed that the many non-profit organization or profit
organizations provide the facilities to care centers by recognizing it as charity and donation. The
free facilities reduces the bargaining power of suppliers as the care center get these services in
free from others that is why; it states that the negotiation power of suppliers is low (IBIS World,
2019).

Strategic Analysis 6
The threat of competitors
High degrees of threat of competitors in the industry as nowadays, there are many care centers
have been opened that provides the caring services to consumers. Blue Care, Accurate Home
Care LLC, Presbyterian Church, Benetas, the Whiddon Group and many others are the top
competitors of the care center that gives the high competition by providing the similar services to
consumers. Existing companies have high brand image in the market due to the competition
among them has been increases. These centers also earn the high revenue which states the high
competition among the companies like Whiddon Group-$351 million. Whiddon Group-$351
million earned the high revenue in the care industry by supplying the similar services to
consumers. The high brand image of the companies also increases the threat of competitors in the
aged care industry (Zoominfo, 2019)
The threat of substitute
The degree of threat of substitute is less as these care centers is opened for the take care of the
people who did not stay in their home. The people need the services as it is difficult for them to
take care of themselves. They do not have any alternative option that they can use to take care of
themselves. In care centers, staff members help them in performing their daily routine activities
and also provide them nutrition full food so that their health will maintained. Less choice
decreases the degree of threat of substitute.
Conclusion
From the above discussion, it is concluded that Regis Aged Care provides the old aged care
services to consumers. In the above report, the external environment has been analyzed with the
strategic management tools. Porter’s five forces and PEST Analysis are the external factors that

Strategic Analysis 7
can be used to evaluate the business environment. As per the above analysis, it has been found
that Regis aged care center has advantages and challenges to drive the business in residential
aged care industry across the Australia.

Strategic Analysis 8
References
Australian Government. (2020). Aged care. Available From: https://www.health.gov.au/health-
topics/aged-care [Accessed 31/3/2020].
Australian Government. (2020). Funding for aged care service providers. Available From:
https://www.health.gov.au/health-topics/aged-care/providing-aged-care-services/funding-for-
aged-care-service-providers [Accessed 31/3/2020].
Australian Medical Association. (2020). Technological Innovations Needed For Aged Care.
Available From: https://ama.com.au/ausmed/technological-innovations-needed-aged-care
[Accessed 31/3/2020].
BMC Geriatrics. (2016). Trends in the utilisation of aged care services in Australia, 2008–2016.
Available From: https://bmcgeriatr.biomedcentral.com/articles/10.1186/s12877-019-1209-9
[Accessed 31/3/2020].
Ginter, P. M., Duncan, W. J., & Swayne, L. E. (2018). The strategic management of health care
organizations. John Wiley & Sons.
IBIS World. (2019) Aged Care Residential Services industry trends (2014-2019). Available
From: https://www.ibisworld.com.au/industry-trends/market-research-reports/health-care-social-
assistance/aged-care-residential-services.html [Accessed 31/3/2020].
Mukherjee, I. (2018) Applying Porter’s Five Force Framework in Emerging Markets—Issues
and Recommendations. In Strategic Marketing Issues in Emerging Markets (pp. 307-316).
Springer, Singapore.

Strategic Analysis 9
Trigeorgis, L. and Reuer, J.J. (2017) Real options theory in strategic management. Strategic
Management Journal, 38(1), pp.42-63.
Zoominfo. (2019) Competitors. Available From:https://www.zoominfo.com/c/regis-aged-care-
pty-ltd/100991988 [Accessed 31/3/2020].