Strategic Management Report on Ryman Healthcare - 71340/AS

This report provides a comprehensive strategic analysis of Ryman Healthcare, a leading operator in the retirement village and rest home industry in New Zealand and Australia. It begins with an overview of the company's background, vision, and financial performance. The report then delves into an environmental and industry analysis, utilizing PESTLE and Porter's Five Forces frameworks to assess the macro and micro factors influencing Ryman Healthcare's operations. A capability analysis and SWOT analysis are conducted to identify the company's strengths, weaknesses, opportunities, and threats. The report explores strategic options for future expansion, employing Ansoff’s Strategy Matrix, and evaluates proposed strategies using SAFe criteria. Finally, it addresses the implementation of change and leadership strategies necessary for Ryman Healthcare to achieve its strategic objectives. This detailed analysis offers valuable insights into the company's strategic positioning and potential for long-term sustainability and profitability.

Running head: STRATEGIC MANAGEMENT
Strategic Management
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Table of Contents
Introduction......................................................................................................................................2
Ryman Healthcare: Background and Overview..............................................................................4
Environment and Industry Analysis................................................................................................7
PESTLE analysis for Ryman Healthcare Company....................................................................8
Porter’s Five Forces Model.......................................................................................................14
Strategic Implications................................................................................................................17
Capability Analysis........................................................................................................................18
SWOT Analysis.........................................................................................................................18
Strategic options of Ryman Healthcare.........................................................................................19
Ansoff’s Strategy Matrix:..........................................................................................................20
Evaluation of proposed strategies..................................................................................................21
SAFe Criteria:............................................................................................................................22
Implementing Change....................................................................................................................23
Leading Change.............................................................................................................................24
Conclusion.....................................................................................................................................25
References......................................................................................................................................27

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Introduction
Over the years, the global population has experienced immense dynamics in almost all
the aspects, including socio-economic, political, and social and health aspects. The healthcare
systems have developed significantly in the global scenario, which in turn has increased the life
expectancy of the population of the world in general (Gerland et al., 2014).
Figure 1: Increase in the population aged above 65 years over the years
(Source: Census.gov, 2018)
Given this statistics, the provision of health care facilities and a proper living
environment for the elderly population is becoming an issue of concern in all the corners of the
world, especially in the developed countries of the world (Ezeh, Bongaarts & Mberu, 2012).

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One such increasingly popular concept, which is especially being implemented in some
of the developed countries, is the model of retirement villages (Dall et al., 2013). A “retirement
village”, by the sense of the term, is the residential complex or premise, which are predominantly
occupied by retired and primarily elderly people, in lieu of contract with the village operator or
due to the facility being provided by government or some welfare organizations (Crisp et al.,
2013).
Taking the context of retirement villages in consideration, the report tries to look into the
working and strategic management of one such organizations, the Ryman Healthcare, which has
been one of the predominant service providers operating in the concerned industry over the last
few decades (Bähler et al., 2015). The report tries to discuss the overall business environment
and also the strategic options, which are available for the concerned company for the purpose of
future expansion, and the changes, which they can implement in their infrastructural and
operational framework (Bernard et al., 2012).
Ryman Healthcare: Background and Overview
The Ryman Healthcare Company, founded in 1984, by John Ryder and Kevin Hickman,
is a company based in New Zealand and primarily operating in New Zealand and Australia. The
company is one of the most popular operator in the retirement village and rest home industries in
the concerned countries, with 31 operating villages in New Zealand itself. The company has also
started venturing in Australia, with one of the villages of the company already operating in
Melbourne and five others coming up in Victoria region of the country (Macdonald, 2018).
The company has over the past few years developed spectacularly and is currently listed
as one of the largest companies in the NZX 50 Index. The market capitalization of the company,

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as in December 2017, has been over $5.2 billion NZD, thereby indicating towards high
profitability of the company in the current period. The underlying profit of the company in the
concerned year has seen to rise up by 13% to $178 million while the reported profit of the same
has been seen to go up by 17% to 357 million dollars (Odt.co.nz, 2018). The dividend of the
company (full year) has also increased by 13% to 17.8 cents per share. The company in the
current year made record investment of a whopping 525 million dollars, which given the high
profitability and prospects of the company, is expected to bring even more profitability and
scopes of long term expansion for the same in the coming years (Saville-Smith & Fraser, 2014).
Figure 2: The
villages of Ryman
Healthcare in New
Zealand
(Source:
Rymanhealthcare.co.nz, 2018)

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The company deals with a mixed market of elderly healthcare services as well as property
development and is also one of the foremost of its kind to provide a host of living and time
spending options for the elderly people along with healthcare and security facilities for the same
to make their life easier and more convenient. The retirement villages operated by the company
not only provide world class facilities for a good living but also facilitates availabilities of
different healthcare facilities which include the support of mini-hospitals for the residents and
secure dementia wings for the same (Jones, 2016).
Over the last few years, the company has seen a steady increase in its profit which can be
seen from the following figure:
Figure 3: Growth of the underlying profit of the company over the years
(Source: Rymanhealthcare.co.nz, 2018)

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With years of experience in the elderly healthcare and habitation market, Ryman
Healthcare works towards achieving its vision of the creation of a healthy and less vulnerable
elderly population in the countries where it operates. One of the primary missions of the
concerned company is to build up such facilities where the elderly and the retired population of
the countries can independently enjoy their lives to the fullest post retirement, under the
framework of “Continuum of care”, as described by the company itself (Nzherald.co.nz, 2018).
The company with an employee strength of 4000 plus people of different specializations and also
supports innovations and advances in the quality of life of the elderly population by taking
various philanthropic initiatives, the primary one among them being the Ryman Prize. This
annual prize of $250,000 NZD is given by the company to the best idea or innovation in the
aspect of development and improvement of the health and overall living conditions of the older
populations of the countries (Macdonald, 2018).
For the purpose of facilitation of the same, the company provides apartments or units in
their retirement villages and rest homes to the desiring residents, which the residents can occupy
for lifetime use. Deferred management fees model is used by the company, which allows the
residents or their estates to receive a lesser amount once they move out, with the deduction being
capped at 20% for a time of over five years (Sawers, 2013). The following section of the report
tries to analyze the overall environment and commercial framework in which the company
operates in the contemporary period.
Environment and Industry Analysis
To understand the performance and operational pattern of any company and their scopes
of long-term sustainability and profitability, it is crucial to study the overall environment and the

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traits of the industry in which the concerned company operate and the key factors determining
the working and performance of the concerned company. For the purpose of incorporating the
same, both the macro trends and the trends more focused to the company itself need to be
analyzed. Keeping this into consideration, this section of the report tries to analyze the overall
environmental and industrial traits, which have implications (both positive as well as negative)
on the operational framework and the profitability of the Ryman Healthcare company (Zuo et al.,
2014). For this purpose, PESTLE analysis is conducted which is as follows:
PESTLE analysis for Ryman Healthcare Company
One of the most efficient, wholesome and widely used model for the purpose of studying
the macro environments in which the concerned company operate in the contemporary period is
the PESTLE analysis. The same, by incorporating the political, economic, technological, legal,
social and environmental aspects, which influence the company, helps in getting an overview of
the operating conditions and implications of the same and also helps in understanding the areas
of future advantage, expansion, prospects as well as threats in the industry of the concerned
company (Newton, 2014). Here, Ryman Healthcare being the company in this case, the
following section conducts the PESTLE analysis on the retirement home and healthcare industry,
especially in the developed economies of New Zealand and Australia.

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Figure 4: Macro factors influencing the overall operational framework of any industry
(Source: Pestleanalysis.com, 2018)
Political Factors
The company in concern operates in the elderly healthcare and habitation industry of the
countries like New Zealand and Australia, both of which are counted among the highly
developed and economically growing countries in the global framework. The political
environment of the countries is known to be stable and contributing to the overall growth and
increase in welfare of the countries (Marsh & Miller, 2012). On the other hand, with the
population of both the countries showing continuous increase in the old age sector, construction
of appropriate and adequate care facilities for the elderly people has become one of the primary
political agendas of these countries too. Ryman Healthcare, in this scenario, has scopes of
profitability and expansion in the country itself, given the presence of various assistance and
infrastructural facilities on part of the government. Other developed countries, showing the same
demographic and behavioral trends also indicates towards presence of huge scopes of expansion

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of operations of the concerned industry in the coming years (Goldstone, Kaufmann & Toft,
2012).
Economic Factors
While analyzing the economic factors and their implications on the concerned industry
under the domain of which Ryman Healthcare operates, it has to be kept into consideration that
the two of the countries in which the company operates are considered as developed economies
with substantial economic growth and with majority of the populations enjoying considerable
financial stabilities (Schneider, 2012). The government of both the countries, Australia and New
Zealand keeps a robust share of their public expenditures for the purpose of finding and
facilitating elderly people’s healthcare, as can be seen from the following figure:
Figure 4: Share of elderly healthcare expenditure borne by different sectors of Australia
(Source: Ncoa.gov.au, 2018)

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The scenario in New Zealand also is highly similar to that of Australia, which is depicted,
in the above figure. On the other hand, the retired personnel themselves due to the economic
stability and savings, which they can accumulate during their job tenure, often fund elderly
healthcare and the costs of post retirement life. The industrial and commercial prosperities of
these countries also facilitate the same considerably (Steptoe, Deaton & Stone, 2015). The
governments of the concerned countries also encourage investments for the purpose of research
and development in the aspect of building up of infrastructure for provision of quality healthcare
and life style to the elderly population of the countries. These factors are expected to contribute
positively to the growth and future prospect of the concerned industry and the company in
consideration.
However, the services being costly, their availability is still now confined to the rich and
upper middle class of the economies in general and the poorer section of the countries can still
not think about buying residential facilities in these retirement villages. In addition to that, the
concept is still not feasibly applicable in the developing countries where a considerably bigger
share of the population are financially unstable, with higher economic vulnerabilities and
insecurities post retirement (Yogo, 2016). Ryman elderly care, in this respect, can gain long
term profitability, provided that they take the affordability issues into consideration and also
introduce services catering to the needs of the elderly people in the developing countries, the
needs being more of necessary nature than luxury, in the same.
Social Factors
One of the primary driving factors behind the increasing expansion of the concerned
industry of elderly residential and healthcare facilities post retirement is the changes in the

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demographics in the global scenario, especially in the developed countries and the dynamics in
the way of living of people in general (Jackson, Howe & Peter, 2013). With increase in the life
expectancy of global population in general and developed countries, in particular the number of
elderly people (above 60 years) is expected to increase in the coming years.
Figure 5: Population of people over 65 years in New Zealand over the years
(Source: Archive.stats.govt.nz, 2018)
As can be seen from the above figure, the elderly population of the country has been
increasing consistently and is expected to increase even more. With the need for making better
provision of lifestyle and survival of elder people of the countries increasing, various concepts
and models of healthcare and lifestyle implementation are coming into existence, some which
have already been implemented in the real case scenarios. This in turn is expected to encourage
the concerned industry, as more people that are elderly would push up the demand for such
retirement villages and rest homes in these countries. The life style and the changes in the family
size over the last few years have also been conducive to the growth of the old age health care and
habitation facilities.