Low Cost: suicide or alternative?

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Hilda Horn
8 years ago
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1 Low Cost: suicide or alternative? (how can my clinic compete in the market?) Congreso de la Orden de Médicos Veterinarios, Lisboa, Nov 14 Pere Mercader (DVM, MBA) VMS Director

2 How intense is the competition? Human Population Dog population Cat population Total dog + cat Vet Clinics Pets per clinic 5.466

3 How intense is the competition? Human Population Dog population Cat population Total dog + cat Vet Clinics Pets per clinic

+ cat 298 65 60 82 78 7.6 8 5.3 86 11 8 8.2 164 18.

4 How intense is the competition??? Human Population Dog population Cat population Total dog + cat Vet Clinics Pets per clinic

65 60 82 11 46 78 7.6 8 5.3 1.9 4.7 86 11 8 8.2 1.1 3.4 164 18.

5 How intense is the competition? Human Population Dog population Cat population Total dog + cat Vet Clinics Pets per clinic

60 82 11 46 78 7.6 8 5.3 1.9 4.7 86 11 8 8.2 1.1 3.4 164 18.6 16 13.

6 # Facultades Veterinarias 5 Alemania 6 Inglaterra Francia 4 Centro Europa

7 # Facultades Veterinarias Alemania Inglaterra Francia España Portugal 4 6 Centro Europa Sur Europa 38 millones de perros/gatos 11 millones de perros/gatos

8 Success in business doing things right vs. doing the right things

9 Which is the right Business Model for a veterinary practice? In growing markets, every one survives. Some people do ok Some people do well Some people do very well

10 Which is the right Business Model for a veterinary practice? In growing markets, every one survives. Some people do ok Some people do well Some people do very well In mature /stagnant / highly competitive markets, only 2 business models survive: Low cost Niche / differentiation

Some people do ok Some people do well Some people do very well In

11 Or?

12 Let s analyze the Low Cost model Question:

13 Which of these is a Low Cost Clinic? Rent per month Net salary per month Total cost to clinic (per month) 650 euros 950 euros euros euros A. The first clinic B. The second clinic C. None of them D. Impossible to know

(per month) 650 euros 950 euros 2.630 1.200 euros 1.

14 Rent per month Net salary per month Total cost to clinic (per month) Transactions per day 650 euros 950 euros euros euros

15 Rent per month Net salary per month Total cost to clinic (per month) Transactions per day Cost Per Transact. 650 euros 950 euros , euros euros ,59

day Cost Per Transact. 650 euros 950 euros 2.

16 Rent per month Net salary per month Total cost to clinic (per month) Transactions per day Cost Per Transact. 650 euros 950 euros , euros euros ,59 Key Idea: LOW COST = HIGH VOLUME

Transact. 650 euros 950 euros 2.630 8 12,59 1.

17 Low Cost: let s build one

18 Low Cost: economic simulation Low Cost unit simulation: 2 veterinarians (1.500 net / month, each) 2 support staff (1.000 net / month, each) Minimum yearly revenue required to make this structure viable:

19 Low Cost: solution or suicide? Procedure Vaccines OHT Castrations Dental cleanings Regular visit Total Price (before VAT) # per year Yearly Revenue

20 Low Cost: solution or suicide? Procedure Price (before VAT) Vaccines 15 OHT 75 Castrations 50 Dental cleanings 75 Regular visit 10 Total # per year Yearly Revenue

21 Low Cost: solution or suicide? Procedure Price (before VAT) Vaccines OHT Castrations Dental cleanings Regular visit Total # per year Yearly Revenue

22 Low Cost: solution or suicide? Procedure Price (before VAT) # per year Yearly Revenue Vaccines OHT Castrations Dental cleanings Regular visit Total transactions 37 transactions per day (300 days / year)

23 Requisites for a successful Low Cost (1) These figures require patients per year A 50% share in a pet market ( people city) A 25% share in a pet market ( people city)

24 Requisites for a successful Low Cost (2) High volume focused on 5-6 basic procedures Zero investment in unnecessary equipment Aggressive investment in local advertising, promoting low cost approach Clear message: low cost clients know what they want. It is not credible to be a low cost and a great trauma surgeon.

25 Requisites for a successful Low Cost (3) If not, you will become a: Low Price Low Volume High Cost = MISERY

26 What is hell?

27 Which is the alternative to a Low Cost strategy? Niche / Differentiation Strategy

30 Muito Obrigado

EXCLUDED HEREDITARY CONDITIONS BY BREED *

EXCLUDED HEREDITARY CONDITIONS BY BREED * CATS Please refer to your policy for a full list of exclusions that apply to all breeds, including mixed breed cats. *We regard these conditions as hereditary