Developing products and services

to meet market demand

Learning outcomes:
As a result of carefully reading this case study, students should
be able to:
• describe the organisational structure of the Portakabin Group
• describe the ownership of a private company
• know that an effective growth strategy is to match a
company’s products to its markets that are growing
Introduction
Intelligent business organisations understand the ‘fit’ between their
products and their markets. Over time, companies develop strengths
that need to be developed in a positive way. They adapt what they do
best to the changing requirements of the market place.
This case study examines how Portakabin has developed new products
in response to growth in its existing markets. In particular, it focuses on
Portakabin WardSpace accommodation: an efficient way of meeting the
increasingly demanding and highly specific requirements of the
healthcare industry.
The Portakabin Group is a private company, owned 100% by the
The advantages of modular construction include:
• vastly improved programme times
• significantly improved quality
• reduced costs
• greater ability to customise the building
• minimal disruption during construction
• safer, quieter and cleaner work on-site.
The divisions within the Portakabin Group reflect client’s needs e.g.
Portakabin Hire supplies interim accommodation and fittings such as
Ansoff highlighted the importance of product development in situations
where an organisation is able to develop new products for an existing
market. This involves a company exploiting the strength of its
relationship with customers and using its experience and creative ability
to develop new products suited to their needs. Supermarkets are a good
example of this. They have gradually moved away from selling only
groceries to offering a wide range of other products including
household goods, clothes, petrol, computers and even cars!
P R O D U C T S
Existing products New products

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Shepherd family. This integrated Group is involved in the hire and sale air-conditioning, on hire, whereas Yorkon manufactures complex, Existing markets Market penetration Product development
• explain new product development as a growth strategy,
of interim and permanent accommodation. architecturally designed permanent buildings.

T
using the example of the Portakabin WardSpace product Selling more of A new product e.g.
the same type of Portakabin WardSpace

E
• identify key environmental factors (SLEPT components) The Portakabin Group product to the same accommodation
that have led to a growing market for healthcare products type of people. tailored to the needs

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of a growing market
• show how the development of the Portakabin WardSpace European Division Scottish Division Yorkon Limited Hire Division Sales and International Division Foremans Relocatable Building Systems (healthcare).

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building was research driven New markets Market development Diversification

A
• give examples of how the Portakabin WardSpace design Finding new Developing new
• Sarl (France) • Portakabin AirCare • Portakabin Total Solutions
customers for products and markets.
was developed to meet the needs of the market

• BV (The Netherlands) • Portakabin Interiors
• explain how Portakabin WardSpace accommodation • GmbH (Germany) • Portaloo
provides a cost effective solution to healthcare provision • Portakabin Limited (Belgian Branch)
• outline the benefits of batch production.
Portakabin Ltd specialises in producing modular buildings. In modular
construction, buildings are manufactured and fitted out in a controlled
factory environment whilst the foundations are being prepared on-site.
The customer’s modules are then taken to the site, craned into position
and linked together. Architectural features (e.g. external cladding,
glazing, lifts, a stair tower or a pitched roof) are
added on-site.
M
• Portakabin Fire & Security Systems an existing product.
• Portakabin Access
Portakabin’s growth strategy is well illustrated by its Portakabin
WardSpace building, that fits neatly within the product
development sector.
Product range and development
Portakabin produces a range of specially tailored products for different Portakabin has supplied the healthcare industry with modular buildings
markets, including: in small numbers for a number of years. Recently, there has been
an increasing demand for new high-quality healthcare buildings to
• Portakabin WardSpace – hospital wards relieve severe shortages of space in many hospitals. Portakabin has
• Ultima – office buildings ® therefore developed a new product: Portakabin WardSpace.
It is designed specifically to supply hospitals with much needed
• Lilliput – nursery schools. high-quality accommodation. The Portakabin WardSpace concept is
a direct response to the National Health Service Plan (NHS), which is
designed to improve care and service to patients so that they recover
more quickly.
In setting out its plans for new building construction, the NHS is
These buildings have attractive layouts, and good aesthetic qualities demanding a design solution that ‘not only satisfies functional
both internally and externally. They are also highly energy efficient, with requirements but is also economical in both its capital and running costs
positive impacts on the environment. i.e. cheap to build, use and maintain’.

The marketing strategist Igor Ansoff identified a range of options facing
businesses that are seeking to develop a strategy for growth. He
constructed a matrix that sets out the options. At any one time there are
Lilliput nursery established existing markets and new developing markets. At the same
time there are established existing products and new products. Firms
have to decide precisely where to concentrate their efforts.
The Portakabin WardSpace design is modelled on a 32-bed ward, which
is the largest practical size for nurses to supervise and observe. Every
patient has convenient access to toilets and showers, all of which are
single sex. Every patient has a generous area around the bed for visitors
and personal belongings, a personal locker, a window view and access to
entertainment services.
One main aim of Portakabin WardSpace accommodation is fast delivery
to meet the urgent NHS agenda, with handover of the new buildings
24 weeks after the client has approved the plans. The wards are
attractively decorated and fitted. The benefits of the design to patients
are that there are more single person units to improve patient privacy
and confidentiality, and more social interaction in the social areas,
which leads to faster recovery.
External influences driving change and product
development
We use the term ‘strategic fit’ to describe the relationship between an
organisation and its environment. Strategic fit involves having the right
sort of management (good at decision making) and the ability to
recognise customer needs, the right resources (financial, human etc),
appropriate technological capability (ability to work with new ideas and
technologies), and the products that match customer demand. In order
to ‘fit’ the organisation and its products to the environment it is
important to carry out a SLEPT (Social, Legal, Economic, Political, and
Technological) analysis of environmental forces.
In developing Portakabin WardSpace accommodation, a SLEPT
analysis revealed the following factors:
• Social
The NHS plan notes that ‘the most notable change in today’s society is
the public’s own increased expectations about the quality of the delivery
of services, whether in the public or private sector’. The Patient’s
Charter sets out patients’ rights. It states that people attending a
healthcare facility for assessment, diagnosis, treatment or care can
reasonably expect to have:
• confidential consultation and discussion with those responsible for
their treatment
• total privacy when meeting the requirement for interventions and/or
bodily functions
• a safe, clean, hazard-free environment, with a pleasant ambience.
All of these have implications for building design. The UK also has an
ageing population. As a result, the demand for hospital space is
continually increasing – it’s a market worth being in.
• Legal
New products must comply with all relevant legislation. In developing the
Portakabin WardSpace design, Portakabin engineers
researched all applicable aspects including air
handling (to prevent the spread of
airborne diseases) and temperature
control to meet hospital
requirements. Other considerations
included all aspects of health and
safety, and fire control
regulations.
• Economic
The resources available to the NHS are finite. The NHS needs facilities
that are:
• technically suitable
• comfortable for all users
• cost-effective to build, maintain and use.
Getting this balance right lies at the heart of all evaluations of hospital
designs.
One of the key advantages to planners of a modular system like
Portakabin WardSpace is that costs can be kept under control because
of the certainty of the construction process, with new wards being
constructed within a factory environment before delivery and assembly
on-site. This contrasts with an outdoor building project based around
steel, bricks and mortar, when capital costs can soar as a result of delays
due to late delivery of materials or poor weather conditions.
• Political
Along with education, health is a key issue for voters, and therefore with
politicians. The NHS plan (above) is the government’s attempt to
revolutionise NHS service provision. The government is investing in
solutions that maximise health gain, are people centred and resource
effective. All of these have implications for design. The government’s
investment also means that money is available for innovative
approaches to solving healthcare problems. The government also has
a pressing agenda which demands that 7,000 new beds
are available by 2004. The Portakabin WardSpace
concept was designed to deliver against
this agenda because of its speed of
construction.
• Technological
The use of computerised systems
to hold, process and transfer
patient information both digitally
and by video at every point of
clinical activity is rapidly becoming a
reality. Portakabin WardSpace buildings
incorporate a coding system, an integrated
communications system that is attached to every
nurse, so when a patient “buzzes” for attention the nearest nurse can
attend. Computer write-up points are also supplied in every bay to write
up notes in the patient’s vicinity, thereby improving efficiency.
Research and Development
The environmental analysis revealed clear opportunities to develop
Portakabin’s product presence in healthcare, so the company carried
out research to create a product carefully tailored to this market. This
involved working with external experts who advised on health
implications. To establish the required design, Portakabin’s own
architects also consulted with NHS Estates. Cost constraints were also
considered: the new product had to be designed to stay within the
purchasers’ budget.
The next stage was to create a digital prototype. Modular wards were a
new concept for the NHS and so Portakabin needed to educate
potential purchasers. The company prepared support materials,
including detailed layouts, images and a compact disc visual
presentation to show the product in its best light.
Product Development
The Portakabin WardSpace design was developed quickly to meet the
opportunity presented by the NHS plan. Many ideas were generated in
order to come up with a winning concept.
Portakabin was already producing a variety of modular buildings, and
the opportunity was there to take the modular concept and turn it into
a purpose-designed hospital ward – an attractive proposition. This
would enable Portakabin to gain a potential competitive edge in the
healthcare marketplace.
These wards were to be constructed and fitted out within a factory
environment and then assembled on-site. Factory construction has all
sorts of advantages, including no rain to delay construction. Modular
construction also meant that from design to finished building, a ward
could be completed in just 24 weeks. Potentially 50% of the time it
would take a traditionally built ward to be created.
Another major advantage that reduces timescales is that parts of the
assembly are produced in batches. The components of a ward for a
London hospital will be similar (if not identical) to those going to a
hospital in Manchester. This slashes build programme time compared
with on-site project manufacturing, where each unit constructed is a
one-off in a method call job production.
As with all Portakabin products, Total Quality is built into product
development. All of Portakabin’s employees are trained and
encouraged to come up with ideas for improving company performance
e.g. by identifying ways to reduce waste or to improve customer service.
The aim is to achieve continuous improvement in all aspects of
performance; hence improving quality, cost and customer service with
minimal disruption to patients and staff.
Conclusion
The Portakabin WardSpace building is a unique product as it offers a
purpose-designed product for healthcare. It involved placing within an
existing market, an exciting new product that is customised to provide
high quality wards at affordable prices, fast.
Portakabin is developing products targeted at bespoke markets where
there are growth opportunities, for example Lilliput nurseries in
education and Portakabin WardSpace accommodation in healthcare,
boosted by extra government spending on these key areas. By operating
in a range of markets, Portakabin is able to capitalise on market
demand and build on new opportunities as they arise.
GLOSSARY
Aesthetic:
A principal of taste and style adopted by a person, group or culture.
Ambience:
Surroundings or atmosphere.
Batch production:
The work to be completed is separated in a number of operations
and each product goes through these stages.
Job Production:
One job is completed before the next is started so each product can
be made unique.
Interim:
Something temporary or provisional.
Private company:
A company owned by shareholders but which - unlike a public
limited company - cannot make a public share issue. A private
company has Ltd within its name e.g. Shepherd Construction Ltd,
Portakabin Ltd compared to a plc.
© Business Case Studies LLP. www.businesscasestudies.co.uk
Strategy:
A long term plan.
For further information about Portakabin please browse:
www.portakabin.com