MGT15 MIDTERM CASE – TULIPAS, BALLICUD, CASUCO

1. Given the case facts, what do you think was the problem of Health Plus?

Answer: The reason why Health Plus could not meet its target for the year 2016 and the years prior
to that is because of the budget. Budget is the problem of the Health Plus i could think of. "Budget
that would be use to grow sales unfortunately, they can't grow grow unless they have a budget", as
Anna said and I quoted. Budget that can be use to innovate their physical stores from smaller and
cluttered to be more attractive and pleasing to the market just like the stores of its competitors. The
budget that would be use to prioritize to buy and have more stocks that are in demand to the
customer and consumer so that it will be bought before it even expires. Health Plus should really
think of strategies on how to get the budget for the changes mentioned above. The game theory
might be a big help to them in formulating their strategies because they are trying to directly
compete with the market leaders. Their competitors uses this that is why they are overshadowed by
them and it is easy for them to do that because Health Plus is small. But it does not stop there they
should think also of the countermoves when the competitors react and make their move also. They
must be competitive with this kind of industry they are in. Being one of the first entrants they must
know that it tend to lose money due to the cost of product development, which usually turn out to
be far higher any gains from the firms temporary monopoly. And this happens in the early stage up
to shakeout stage of its life cycle. They should have make sure when starting their business that they
are the first mover because it has a lot of advantages like the potential to dominate to the market
for the long term. They must consider all of these to continue going concern in the long run and
eventually get its target in the coming years.

2. What generic strategy was Health Plus attempting to pursue?

Answer: The generic strategy that Health Plus attempting to pursue was the general focus
of differentiation because it led organisations such as Health Plus to make their products different or
more attractive than any other within the industry to achieve a competitive advantage. These
organisations generally target larger markets and focus on differentiation on a much wider scale
within the industry than would a cost-led company. And the methods of achieving differentiation
can vary broadly across industries, products and services; however, it can involve various features,
functionality, durability, and also how the brand and the product are marketed to achieve an image
which customers value. When designing products, the organisation will focus on various criteria
considered by consumers within the industry, and will then orient themselves uniquely to meet
those criteria.

3. Given the strength of the competitors that Health Plus was up against, what recommendations
would you propose in order to give them a competitive edge in the market?

Answer:

 Offering a standardized product to the market would be feasible opportunity since its more
favorable to the consumers because of the low coat but quality products. Besides, Health
Plus will also benefit from it as it will lessen the cost to the production, it is a win-win
situation.

 Improving the functional department would be the best possible strategy to regain their
sales. Establishing a sales and marketing department is one of the best ideas since it has a
vital role for the company it can help the company to increase their profitability and
sustainability. These departments will be the one who’ll be in charge in reaching out to
customers and offer their products and services. Also, investing more to research and
development is another solution that could be considered since it’s a preparation to regain
its customers and sales–on how they will use its resources efficiently and effectively. Trade
discounts and other product promotions could also be considered; it could attract more
customers given their quality products.

 Additional Departments
With the current changes in industry’s standards, Health Plus was being overtaken by its
competitors and struggling to find its position in the market. Establishing a sales and
marketing department would be the best solution to regain its customers and eventually
increase its sales.

 Invest on research and development

This strategy will be a big help in order to know the needs and wants of the target
customers, though it’s expensive, our group believes that it will be worth it in the end.

 Offer trade discounts or product promotions

Since they are losing some of its customers, this strategy is the best fit in order to regain its
customers. Given the quality of their products, there will be a higher chance for them to
attract more customers if they consider this strategy.