This paper is the strategic report to the management which includes the analysis of the different factors that can affect the working of the business. The analysis of the factors is essential to be considered by the company. The company that has been selected for the expansion of the business is Aegis aged care who is willing to expand the business in Japan and France. The countries belonging to the Asian and European countries respectively. The factors which are analysed by the age care company include macro-environmental factors, geopolitical risk and opportunities with the market attractiveness. Along with this, there is discussion related to the trade policy that reflects the market which is appropriate for the expansion of the business.
Aegis aged care is an age care company that came into existence in the year 1983. The company is located at west Australia and owned by the two families with the long lasting experience in the aged care and an unwavering commitment to offer the community with the best in the residential aged care services. The company is managing their operation in more than 25 quality aged care residences through the Perth Metropolitan area. Along with this, the company offer the 24-hour care and lifestyle support to more than 2,200 elderly residents (Aegis Aged Care, 2018).
The countries that have been selected for the expansion include Japan and France. The reason for selecting is Japan is super-ageing societies that face the pressures on the aged care system with the rise the increase in the population of the older adults. According to the analysis, this has been found that more than 20% of the population of Japan aged 65 years or older. On the other hand, France is selected because currently there are numerous challenges faced by the elderly care sector (Annear, Otani and Sun, 2016). According to the report, up to 80% of the people in France opt to receive the care at their home but dwindling funds which means overstretched care workers are not able to take follow up at all the complaints of abuse by relatives.
PESTLE analysis
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Factors |
Japan |
France |
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Political factors |
• In Japan, there is political stability which is one of the factors which benefit the company as they will not face the changes in rules and regulations from the government side. •Aegis aged care might fact the influence of the political factors in Japan. This includes political uninvolved young citizen, elderly-friendly election system and the costly national health care system which are some issues which need to be reduced (University of Melbourne, 2016). |
• In France, it is found that there is the presence of the political stability which is one of the benefits for the Aegis aged care. •In the year 2008, when the government faced the financial crises then due to the budget pressure there was a policy shift. •In addition, in the year 2010, a series of the belt-tightening measure and restricted the growth of the nursing home capacity. This shows that the company might face the threat in the market of France. |
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Economic factors |
• The nursing or age care home market is relatively stable associated with the economic situation as need cannot be postponed. •The economy of Japan is increasing with the GDP growth at 1.6% (2017). In addition, the economy of Japan was ranked 28th in the world regarding per capita GDP. •The company will face the inelastic demand for the aged care with regards to the high-income segment. |
• The country is considered the world’s sixth largest economy by the nominal figures and also scores as the third largest economy in Europe. •There is a rise in the GDP of the country with the growth rate of 2.2% (2017) which shows that the country is developing. Though, France is still suffering from some of the infrastructure issues in terms of the aged care home. •The cost of the care for the elderly people was predicted as €34bn. 77% of the same has been covered by the France public sector and the remaining by the private sector (Executive Insights, 2018). |
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Social-cultural |
• Demographics of Japan show that the need for the aged care home is increasing rapidly due to the demographics by far. •This has been predicted that by the year 2025, approx. 18.12% to 21.29% of the total population of Japan would be between the age group of 65 or more. This means that there will be a rise in the age of population which will lead to the rise in demand for the aged care services. •Along with this, there will be increasing in the purchasing power of the aged people till the year 2025. |
• The need of the aged care services is increasing in France. The population of France is approx. 64.63 million and it is further expected to increase to 66.4 million by the year 2022. •In France, the aged care workers are urged to go strike due to the issues of over staff shortage and the cost cuts. This might lead to the issues for the company to manage the operations in France (Kandalaft, 2017). |
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Technological factors |
• In Japan, the trend for the higher medicalization of the services is making the technical aspects of the care more essential. •The technology innovation contributes in offering the people as Aegis aged care company can make use of the same for offering the effective services. |
• The technological factors can affect the working of the aged care in France as there is need as there is a need for the infrastructure and some services which are possible with the help of technology. •The technology is lacking in France due to which the issues in the sector are increasing (Hollensen, 2015). |
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Environmental factors |
• The impact of the construction of a house on the environment can lead to the challenges for the patients who are living at Aegis aged care. •Aegis aged care is recognized in the market for offering the high-quality services with the effective reputation (Chernev, 2018). |
• The construction of the homes in France is one of the factors that can affect the environment. Therefore, the company ensure that they follow the environment safety and protection act. |
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Legal factors |
• Aegis aged care company might face the strict regulations related to the license for opening the aged care at Japan. •Along with this, the country might have some regulations related to the home care as it includes the opening of homes which required the permission of the government. |
• Aegis aged care need to take the approval for the government for performing the operations and for constructing their own home care at the place which is one of the biggest hurdles for the company (Kotler, 2015). |
The geopolitical forces include the forces that can affect the relationship and terms of the country with another country while trading.
Australia and Japan
Australia and Japan have an extensive network of key contacts in the aged care sector. The business circles of both the countries are growing and development of products. The relationship between the two countries is strong which is proved between the Australia-Japan Aged care and wellbeing as it is the first company who initiated since the Japan-Australia Economic Partnership Agreement (University of Melbourne, 2016). This shows that the relationship between the Japan and Australia is strong.
Australia and France
The terms between the Australia and France are good due to which the Australian Nursing and Midwifery Federation (ANMF) is available in France but the conditions of the aged care sector are not good because there are various issues which are faced by the company. Though, the terms of the country remain the same so the company has the opportunity to expand the business in France.
Japan
Japan is the first country in Asia which is having the 26% of the population who is above 65 years old and also stands fourth for the people with the age of 75. This shows that the Japan aged care centre is growing which makes the government allow the other companies to come and set up their age care homes for their population (Parliament of Australia, 2018).
France
In France, the government is struggling with the issues related to the cost and many other factors even they brought the changes in policy. Considering the same, the government of France has allowed the other companies to come and perform the business activity for the aged care.
Potential dangers, risk and opportunities in the current and short-term policy
Japan
Japan has the potential opportunities because the Australia companies are already present there and the population of Japan is becoming aged early which shows that they need the age care services that are offered by the company.
The potential danger that is available in Japan includes the rise in the availability of the aged care which leads to the competition and affect the services that are offered by them (Global social challenges, 2017).
France
In France, the major opportunity that the company is getting includes the rise in the demand as there are many people who are looking for the aged care services. Moreover, the centres that are available include the lack of services which is not liked by many people in the market (The weekly Source, 2018).
A risk factor that is present in France includes that the staff who work at the aged care are facing the issues of overburden and lack of salary due to which they strike for the same.
Conclusion
In the end, it can be concluded that the Aegis aged care company has the opportunity in both the market either it is European and Asian countries. Considering the analysis with the help of the strategy tools, this has been found that the company should expand their business operation in Japan. Japan has numerous opportunities which will result in the increase in the profit of the company. The market strategy that has been suggested to the company is licensing in which the company will take the license from the government for operating the business operations in Japan.
References
Aegis Aged Care (2018) About Us [Online]. Available from: https://aegiscare.com.au/about-us [Accessed on 25th August 2018]
Annear, M.J., Otani, J. and Sun, J. (2016) Experiences of Japanese aged care: the pursuit of optimal health and cultural engagement. Age and Ageing, 45(6), pp.753-756.
Chernev, A. (2018) Strategic marketing management. Boston: Cerebellum Press.
Executive Insights (2018) Changing Beds: French Nursing Homes and Opportunities for the Private Sector [Online]. Available from: https://www.lek.com/sites/default/files/insights/pdf-attachments/LEK_1641_NursingHomes_Web_Final.pdf [Accessed on 25th August 2018]
Global social challenges (2017) Ageing Society in Japan and its Political Influences [Online]. Available from: https://www.projects.socialsciences.manchester.ac.uk/global-social-challenges/2017/04/28/ageing-society-in-japan-and-its-political-influences/ [Accessed on 25th August 2018]
Hollensen, S. (2015) Marketing management: A relationship approach. India: Pearson Education Limited.
Kandalaft, A. (2017) The growing problem of elderly care in France [Online]. Available from: https://www.theguardian.com/social-care-network/2012/jan/11/growing-problem-elderly-care-france [Accessed on 25th August 2018]
Kotler, P. (2015) Framework for marketing management. India: Pearson Education.
Parliament of Australia (2018) International aged care: a quick guide [Online]. Available from: https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/rp1617/Quick_Guides/IntAgedCare [Accessed on 25th August 2018]
The weekly Source (2018) France: aged care workers and residents launch industrial action at 7,000 facilities [Online]. Available from: https://www.theweeklysource.com.au/france-aged-care-workers-residents-launch-industrial-action-7000-facilities/ [Accessed on 25th August 2018]
University of Melbourne (2016) Japan’s Aged Care Sector [Online]. Available from: https://mspgh.unimelb.edu.au/ageing-industry-network/newsletter-issue-4-october-2016/japans-aged-care-sector [Accessed on 25th August 2018]
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