MARKETING — Situation Report Essay Example

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Table of Contents

3Executive summary

41.0. Market size and Trends

42.0. Financial and corporate advantage

53.0. SWOT analysis and competitive advantage

64.0. Strategic options

75.0. Recommendations and conclusion


Executive summary

The aged and old people in Australia comprises of 55% of the whole population. With only 6% of these people either living in retirement villages or residential aged-care facilities. Therefore, homes for the old and aged are in dire demand in Australia. Thus this industry segment offers products ranging residential aged- care facilities and retirement villages for the elderly. Considering the onset of aging people and those who are fragile needing these services, the industry is expected to expand thus increasing the revenue. According to IBISWorld report for 2014, the revenue is expected to grow by 4.2% to $17bn over the five year 2014-2015. The report also indicates that there is a supply constraint since the number of applicants are many than the available accommodation.

Despite the increasing number of users to these facilities, new entrance is expected to increase, thus higher competition in the industry. The government is also taking over in the industry by providing subsidies to the Australians and providing the aged with resources they need at their homes. Competition will mean that only the serious companies will survive in this industry. The major strength of the industry is that there is a large number of people requiring the facilities. With an enhanced value addition by the government, the industry is expected to outperform the country’s GDP at a compounded annual rate of 4.3% for a period over 10years from 2019-2020, hence the industry is in its growth stage of the life cycle. Despite this commendable growth, a number of variables at play serves to restrain this growth such as government is mostly recommending on community care as opposed to the residential care also the industry is heavily reliant on government expenditure and government aims to control its funding to the industry thus growth will start taking a negative path in the future.


1.0. Market size and Trends

The old and the aged in Australia comprises majority of the people, whose population stands at 6.1Million. Out of this huge number only 6% of these people can afford to live in the retirement villages or the residential aged- care facilities. Thus, the people are in dire need of high and quality living standards for them to age in style. According to IBISWorld 2015 report, there were a total of 1835 companies in the industry, providing care and assistance to the old (Chesterman, 2016). There are a number of companies that provides residential aged-care facilities and retirement villages to the old and aging in Australia where the old get nutritional and nursing support. They are vital in providing the aged people with a decent life by taking care of them in the best way possible (Lacey, 2014).

Over the five years, the industry is expected to grow at $17.0 billion and a profit of $1 billion and provides $10billion as wages to the employed staff annually. With the implementation of living longer, living better-aged care support is expected to shape the industry performance to a higher scale. Also, new residential accommodation is anticipated to streamline the industry performance and increase the profits to higher levels. Moreover, the earnings are expected to increase following the removal of interest rates by the government which has helped the industry to construct more high-quality rooms for the aged and its continued support for this market segment keeps on growing Melchiorre et al., 2013).

2.0. Financial and corporate advantage

Following the high demand from the aging group in Australia, the companies offering these services have increased tremendously over the years. The removal of the distinction between the high and low care units for the aged has facilitated the increase in the participants in this industry; therefore, it’s a major challenge to the company’s income. Earnings and employment creation is expected to be higher in the subsequent years since more companies will come in to provide these services (Wijngaarden, Scholten, & Wijk, 2012). With the establishment of new high-quality facilities, the industry will provide restaurants that are of high standards and recreation facilities and television at a pay which will increase the growth at an estimated rate of 5.3% annually from 2019-2024 making the industry revenue to reach to $22 billion (IBISWorld, 2014).

With the government support on accommodation bonds and other financial strategies such as cutting the interest on loans to zero the industry is expected to perform extemporary well financially. However, with many participants in the industry, the income for an individual company will be lower, therefore for the company to survive it has to gain a competitive advantage over its competitors by coming up with favourable strategies on pricing and care (Elisa, 2013). The funding of the elderly by the Australia government through private assistance offers at their residences and giving them some money at the end of every month, has played a significant role in the reduction of the number of people who seek to go to residential aged care facilities thus affecting the profitability of this industry (Stephenson, Karanges & McGregor, 2013).

With the aim of reducing competition in the industry, the government must make it difficult for all new entrance by demanding complex documentation and accreditation procedures. For one to survive in this stiff competitive industry, therefore, require mergers, franchising or joint ventures (Jobber & Ellis-Chadwick, 2012). Further, groups such as churches that provides these services to the old for free, makes the industry very competitive and stiff for the other companies to survive. These nonprofit groups competitive advantage enables them to concentrates these aged people at one building within a church confinement where they takes good care to them and provides health services to them for free thus diminishing the gains of other competitors and the industry in general (Schlegelmilch & Öberseder, 2010).

3.0. SWOT analysis and competitive advantage

The increment of the elderly annually serves as an advantage for this industry, thus, they require more space to live in and be taken care of. Only about 45% of Australians are young a clearing indication of how big the elderly market is (Melchiorre et al., 2013). According to IBISWorld report, majority of the people are over 70 years and above. They all require good care of thus more units where they can live need to be established. Everything with some strength it comes to lot of its weaknesses, having the number of those people requiring these services increasingly, the human power with specialized skills is a must. Sourcing and maintaining these staffs at the villages or the residential aged care facilities becomes a challenge due to the high salaries they demand (Schlegelmilch & Öberseder, 2010). Their high demand in these facilities make their supply to become a constraint. Financial constraints of maintaining these facilities or improving them to high standards also become a major challenge.

One opportunity is that there is a higher expectation of having a large number of people with disabilities at old age in Australia. According to IBISWorld, it is expected that those living in residential areas and retirement villages will grow at a rate of 3.8% annually all through from 2019-2024 (IBISWorld, 2014). This presents an opportunity for companies in this industry to build and prepare as they serve this market segment. Moreover, it’s easy for every company to get its market share since the market it’s not monopolized (Nancy, 2015). The new provision of restaurants and television watching area gives one an upper hand to penetrate in the industry.

Threats like tight regulatory control to the entry in the industry therefore limiting those who can supply these services to the old and the aged as well as the various clearly certificates and costs involved in order for a company to be fully recognized as a service provider in this industry serves as a threat to players in market (Brennan, Cass, Himmelweit & Szebehely, 2012). In Australia there are many private market players in the industry, according to IBISWorld report, such as Japara, Rival Regis group, Bupa, Allitary that provides the same services, the companies compete for the same customers, that is the aged, therefore in maximizing profits one has to be very keen how to provide unique specialized services for the company to gain a competitive advantage in the industry.

4.0. Strategic options

In the strategic decision making there are strategies that the IBISWorld report for 2014 suggested that those in the industry needs to take such as knowing their competitors and determining their competitive advantage in terms of training and hiring the staff, and also conducting regular training to them in order to improve their skills and services that they offer to their clients (Lacey, 2014). Consequently, while sourcing for these staffs, there is need to know their level of competence and intelligence in their work for them to deliver the expected services without much follow up. Any company desiring to survive must have the best personnel with excellent intrapersonal skills (Brennan, Cass, Himmelweit & Szebehely, 2012).

In line with government policy of putting up new structures, the players in the industry have no option other than establishing high standards housings for the aged. Technological advancement is required such as fitting these facilities with electronics that can entertain their users and also make sure that the rooms look more habitable compared to those of other companies in the same industry (Wijngaarden, Scholten & Wijk, 2012). Adequate spacing for resting is also an essential strategy for this business for the people to relax freely and have enough fresh air. Having adequate finances can contribute significantly to the growth any company in this industry. The life cycle of the industry is in its growth phase which is expected to outperform in the country’s GDP with a compounded annual rate of 4.3% for over a period of 10 years from 2019-20 as indicated by IBISWorld report. However, this growth phase is subject to some play variable factors that the government will begin taking in future such as providing community care as opposed to the residential aged care facilities and cutting down funding to the industry.

5.0. Recommendations and conclusion

Those people in this industry require working together in a view to having the financial strength to provide the best services. For instance, jointly coming up with a health organization so as to provide treatment to these people. Further, Purchasing of modern equipment and machine will serve in improving the efficiency of the premises hence improving the number of people in the facilities (Melchiorre et al., 2013). Looking for Non-governmental organizations that provide the services to the aged at no cost, will help the private players to get some new customers by calling upon them to assist and at the long run they will benefit from these Christian organizations through partnerships. Homemade care for the old at their homes by the government might fail to be successful due the political forces of the country, therefore, making a difference in the service provision will favor the private companies in this industry to gain more profits since they have the room to work extra harder (Sarah, 2016). Moreover, diversification of the services provided will increase the competitive advantage of any company in this industry. In conclusion, the industry of old and aged care in Australia has taken a good path in looking at the welfare of the old.


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Chesterman, J. (2016). Taking control: Putting older people at the centre of elder abuse response strategies. Australian Social Work, 69(1), 115-124.

Elisa, k. (2013). Making a difference in service provision to the aged. Cambridge u.a.: Cambridge Univ. Press.

Jobber, D., & Ellis-Chadwick, F. (2012). Principles and practice of marketing (No. 7th). McGraw-Hill Higher Education.

Lacey, W. (2014). Neglectful to the Point of Cruelty; Elder Abuse and the Rights of Older Persons in Australia. Sydney L. Rev., 36, 99.

Melchiorre, M. G., Chiatti, C., Lamura, G., Torres-Gonzales, F., Stankunas, M., Lindert, J., … & Soares, J. F. (2013). Social support, socio-economic status, health and abuse among older people in seven European countries. PloS one, 8(1), e54856.

Nancy, L. (2015). Elderly Day and Residential care. Paper based on the proceedings of the third annual conference held Nov. 4-6, 2015, at the Johann Jacobs Foundation Communication Center.

Sarah, Z. (2016). Chocolate rain. Two ideas for a creative approach to activities in Dementia care. Polity Press.

Schlegelmilch, B. B., & Öberseder, M. (2010). Half a century of marketing ethics: Shifting perspectives and emerging trends. Journal of Business Ethics, 93(1), 1-19.

Stephenson, C. P., Karanges, E., & McGregor, I. S. (2013). Trends in the utilisation of psychotropic medications in Australia from 2000 to 2011. Australian & New Zealand Journal of Psychiatry, 47(1), 74-87.

van Wijngaarden, J. D., Scholten, G. R., & van Wijk, K. P. (2012). Strategic analysis for health care organizations: the suitability of the SWOT‐analysis. The International journal of health planning and management, 27(1), 34-49.