Page 11 - CIMA MCS Workbook February 2019 - Day 1 Tasks

CIMA FEBRUARY 2019 – MANAGEMENT CASE STUDY

enhancement to protect of the Crowncare brand and to support its strategy of attracting and
retaining patients by offering high quality service both in clinical excellence and presentation.
These challenges are generating risks to the future success of dental practices within the industry
and require immediate innovation and action to mitigate the risk.

With revenue derived entirely from Capital City in Varentia is it also essential that Crowncare has
up to date and accurate information from the market places to facilitate crucial decisions
surrounding its patients, range of services and market presence. For example, Crowncare
currently has only 157500 patients out of a potential 2 million population on its catchment area
and as a result may consider developing a further presence in this marketplace. This will also be
applicable to other expansion opportunities either in neighbouring towns and cities or other
countries.

All opportunities for Crowncare are fuelled by external pressures requiring the need for greater
awareness of changes in consumer taste, improvements in technology and social and economic
pressures affecting disposable income. This makes for a complex trading environment and a need
to understand more about the industry, new technology and how each aspect of service provision
and related costs are progressing to facilitate decisions concerning Crowncare’s strategy if
growing market share by innovation, quality and reputation is to be achieved.

The control of Crowncare is dependent on a management structure where only two of the board
of directors are full time with all other directors (and heads of practice) expected to contribute
80% of their working time to clinical duties and all non‐clinical aspects of running the practice
including accounting are the responsibility of the one practice manager in each practice. In
addition, only 40 of the 105 dentists employed have any ownership interest (by way of
shareholding) in the business, which may raise issues surrounding conflicts of objectives and
motivation of front line personnel.

The decisions that need to be taken may require more involvement than this current structure
offers and presents a significant risk to the future success of Crowncare and are not assisted by
the inflexibility of the accounting system when considering time and cost. The internal activities of
Crowncare need to carefully analysed to establish how these costs are incurred and how the can
be better managed in the future. Failure to do so will challenge the future profitability of
Crowncare

8 KAPLAN PUBLISHING