Page 14 - CIMA MCS Workbook February 2019 - Day 1 Suggested Solutions

CIMA FEBRUARY 2019 – MANAGEMENT CASE STUDY

consumers’ income and expenditure and the inevitable effect on disposable income. For
example although the economic growth of UK is not very high and economy has been quite
stable for some time, it is seen that disposable income of people is rising, making it a
favourable time for growing a client base. Middle and upper classes of people may be
targeted for cosmetic dental procedures and orthodontic aligning services. The most
relevant aspect is the purchasing power of the customers falling during economic
downturns on which the industry is heavily dependent. Cost of raw materials can also be a
factor if the economy for a material is weak.

 social influences ‐ will be a concern for CROWNCARE and will include social, cultural or
demographic factors. The industry is affected by changing socio cultural trends and
people’s preferences and CROWNCARE have to adapt to these forces. Age maybe a most
important characteristic when evaluating consumer choice. The older generation is more
health conscious and tends to consider preventative products and nutritional factors. The
younger generation leans towards products that are fun, new, and fashionable. The socio
cultural factors of UK are such that people are very much conscious about their smile, teeth
alignment and oral health. They are ready to pay for good quality cosmetic services and are
aware of getting their dental health check‐ups twice a year. Thus, there are large numbers
of potential customers in UK society who need to be targeted and approached through
right marketing strategy. People want quality and cost effective treatment services and
thus, must be provided with that choice. Celebrity endorsements, attractive commercials,
and sweepstakes become more important to the younger generation in their product
decision. . In addition, social media outlets (i.e. Facebook, Twitter, Instagram etc.) keep
consumers directly connected to the brand. Firms are able to obtain valuable information
and suggestions from consumers about potential or current new products, providing low
advertising costs with global outreach. Age distribution in the various populations is also an
important factor that companies have to keep in mind while targeting the consumers.

There is an inextricable link between changes in social habits, spend on dental services,
associated costs and therefore profitability. This clearly results in the need for more
detailed analysis to forecast future sales and the resultant need to participate in the rise of
“big data” to predict shifts in consumer behaviour and customer preference.

 technological influences – technology and innovation have become important determinants
of market share in this industry. The more innovative the company, the greater the
potential effect on its market share. For example, dentistry is a field that is being
continuously researched and latest equipment and procedures are regularly introduced in
this field. Cosmetic dentistry, smile design, laser treatment etc. are a few examples of the
latest procedures and techniques. CROWNCARE, as the dominant player in its catchment
area, must remain updated and ready to adapt new technological advancement in clinical
service delivery and quality.

Technological advances e.g. 3D printing increases the utility of employees and capital,
which increases productivity. High costs for new technology can also be an entry barrier to
new competitors, demonstrating that technology is now one of the most important factors
affecting the sales and profitability of the industry.

64 KAPLAN PUBLISHING