Final presentation of business strategy case for Advanced Strategy (CEMS6003) at University of Sydney, Australia.

1. Cao Yiqi
Kim Bruce
Honza Borysek
Kyle Starain Han
Benjamin Chavernac
Conquering Australian Aged Care
by Digitalizing the Industry
REGIS
CEMS6003: Advanced Strategy / 16 October 2015
Business Strategy Case

2. Executive summary
Regis is striving to be a dynamic, creative and innovative leader in the Australian aged care industry. As a premium
aged care provider, Regis builds its competitive advantage on developing and operating premium aged care
residences.
ê
The aged care industry is growing and provides great opportunities to both leading incumbents and potential new
entrants.
ê
Ageing population sees the value in customized and premium solutions for their health care needs with more
independence in choice.
ê
Regis needs to leverage its current strength and capabilities to take advantage of the potential of the market and
establish its position as an innovative industry leader.
ê
To achieve sustainable competitive advantage, Regis should focus on new technologies through two different strategic
options: Smart Residential Care or Digitalized Home Care.
ê
Digitalizing Home Care is more promising considering its possibilities and opportunities for now and for the future in
comparison with Smart Residential Care.
ê
Learning launch of developing the Beta version and testing the platform for one month will allow Regis to test key
assumptions.
ê
Investing in new technology, Regis will improve health and wellbeing of old people, while doing social good.
Executive Summary
Regis Overview
Analysis
Strategy
Conclusions
Appendices
EXECUTIVE SUMMARY

3. DYNAMIC VISION
To be a dynamic, innovative and creative industry
leader.
Provide premium quality aged care, through
effective management by dedicated professionals.
HUMAN CENTRED MISSION
Promote and enhance the quality of life of residents.
Achieve an environment which fosters empowerment,
sense of belonging, respect and dignity.
Create a reputation for delivering a high standard of
care and continuous quality improvement.
REGIS
Dementia
Care
Palliative
Care
Respite
Care
Transitional
Care
Community
Care
Home Care
Residential
Care
Regis is striving to be a dynamic, creative and innovative leader in the Australian
aged care industry.
REGIS OVERVIEW
Offering: premium residential aged
care provider
Financial structure: for-profit,
privately owned, listed
Strategy: build, own and operate
Size: owns and operates 47 residential
facilities, offering over 5,000
operational places
Key stakeholders: residents,
government, stuff
REGIS IN SHORT1
Executive Summary
Regis Overview
Analysis
Strategy
Conclusions
Appendices
REGIS’ COMPETITORS
There are 8% of governmental, 58% of non-for-profit and
36% of for-profit actors2. In terms of for-profit, there are 5
big players including Regis:
See Appendix 3 and 7
1 Regis 2015d
2 Regis 2014 p.21

4. EXTERNAL ANALYSES
POLITICAL
• Extensive governmental funding
• Community care encouraged
• Well establish pension system
SOCIAL
• Significant shift in demography as
more people are entering retirement
stage
ECONOMICAL
• 6% expected annual industry growth
between 2016 and 20211
LEGAL
• Extensive government regulation in
facility accreditation
• Reporting requirements, fees and
charges
TECHNOLOGICAL
• Technology undeveloped industry
• National electronic health record
• Management software increases staff
efficiency
LABOUR
is a mayor increasing expense and
key success factor.
DEMAND
is increasing, which implies
more diversity in services and
offering.
59.6%
NEW ENTRANTS
High regulatory and strict industry
environment, growing number of
private for-profits.
Life cycle stage: Growth
Revenue volatility: Low
Capital intensity: Low
Industry support: High
Concentration level: Low
INDUSTRY RIVALRY
Market concentration is low,
but there is a trend towards
consolidation.
20%
The aged care industry is growing and provides great opportunities to both leading
incumbents and potential new entrants.
Regulation level: High
Technology change: Low
Barriers to entry: High
Industry globalization: Low
Competition level: Low
DISRUPTION
Technology enabled industry
innovation.
Executive Summary
Regis Overview
Analysis
Strategy
Conclusions
Appendices
of industry costs
are constituted
by wages3
aged care industry
revenue is generated
by top four operators2
SUBSTITUTION
There is no significant
possible threat of
substitution.
See Appendix 1, 2, 3 1 Ibisworld 2015 p.2 2 Ibisworld 2015 p.20 3 Ibisworld 2015 p.21

5. Ageing population sees the value in customized and premium solutions for their
health care needs with more independence in choice.
1
1.5
2
2.5
3
3.5
07 09 11 13 15 17 19 21
Millionofpeople
Year
70+ year old Australian segment will grow 3.9%
per year through 2020-2021 1
INCREASE IN
DEMAND
Due to aging
population and
longer life
expectancy
Increase in
chronic
DISEASES
AND
DISABILITIES
Higher level of
INCOME AND
WEALTH
Greater
ETHIC
DIVERSITY
MAYOR
CUSTOMER
TRENDS
Autonomy, choice and involvement in
tailoring services to personal needs and
preferences
Independent living arrangements, as close as
possible to family and in own home when
feasible2
Premium quality, hotel style options
Culturally fitting aged-care in terms of e.g.
religion, language
Technology, increasing awareness and
openness to existing technology.
CUSTOMER ANALYSES
Increasing
diversity of
PREFERENCES AND
PERSONAL CARE
NEEDS
Executive Summary
Regis Overview
Analysis
Strategy
Conclusions
Appendices
See Appendix 2, 4
1 IbisWorld 2015 p.8
2 IbisWorld 2015 p.23

6. GAINS
Sense of safety,
reduced stress
Own development: skilled team experienced in real
estate enables to develop and operate premium
properties
Premium: residential aged care provider, urban and
coastal areas, modern facilities, focused on high acuity
care
Vision: aspiring to be dynamic, innovative and creative
Good reputation
Technology: friendly, e.g. IT system centralizing rostering
functions and robotic harp seal
Reliable staff: Professional development and recruitment
programs
As a premium aged care provider, Regis builds its competitive advantage on developing and
operating premium aged care residences.
Long-term growth and gain of market share
through Greenfield developments and
acquisitions
Scale advantage vs. smaller actors
Governmental accreditation: maximizing
entitled Government and Resident operating
funding
1 Prime location è higher RAD revenue
2 High acuity care è higher government
revenue
3 Extra services è higher margins
INTERNAL ANALYSES
VALUE PROPOSITION
COMPETITIVE ADVANTAGE & KEY CAPABILITIES
ECONOMIC LOGIC
CUSTOMER
JOBS
daily task, social
interaction,
advisory
PAINS
Loneliness,
home sickness,
package deal
expenses
68%
28%
4%
2015 REVENUE STREAMS1
Government
revenue
Resident revenue
Other income
Executive Summary
Regis Overview
Analysis
Strategy
Conclusions
Appendices
See Appendix 4, 5, 6, 7
1 Regis 2015c p.74

7. SUMMARY OF ANALYSES
Regis needs to leverage its current strength and capabilities to take advantage of the
potential of the market and establish its position as an innovative industry leader.
MAIN FACTORS FOR BUSINESS INNOVATION1
S
• Good reputation
• Innovative vision
• Government support
• Strong cash generation
W
• Weight of staff expenses
• Lack of skilled labor
• High reliance on
government
O
• Expected market growth
• Use of technology
• Internet of Things2
solution
• Opportunity for
consolidation
T
• Global competitors’ entry
• Increasing demand for
home care solutions4
• Supply constraint
KEY INSIGHTS OF ANALYSES
• Regis is ready and keen to take part in innovation the aged care industry.
• The current business model would become unsustainable in following years considering the growing diversity of housing
preferences and needs among existing and future customers.
• As aging population is creating a huge opportunity for all the market players, Regis needs to focus now on developing a
new competitive advantage.
• Technological solutions are perfect tool for enabling industry innovation and solving the lack of skilled and available aged
care labor in the market.
SMART RESIDENTIAL CARE
or
DIGITALIZED HOME CARE
Executive Summary
Regis Overview
Analysis
Strategy
Conclusions
Appendices
1 See Appendix 8 2 Chui, Loffler and Roberts 2010 3 Ibisworld 2015 p.7 4 IbisWorld 2015 p.23

8. STRATEGIC OPTIONS
ISSUES
3 millions elderly (age of 65+) in Australia, estimated to double in
following fifteen years
Lack of skilled labor in the industry
People are emphasizing on health checking, on quicker, higher
quality and more precise help in both casual and emergency
situations.
Never-ending need of managing their facilities, data and customer
relationships more effectively and easily.
To achieve sustainable competitive advantage, Regis should consider focusing on new
technologies: Smart Residential Care or Digitalized Home Care.
SOLUTION
Benefits both sides of the industry: Regis and customers.
Regis would 1) reduce the threats of lacking skilled labor and 2)
supply the increasing demand on aged care market.
Provides superior customer health check and analytics with fast
and precise casual and emergency care through smart home
solutions and Internet of Things technology.
Helps Regis to manage and improve their facilities and services (big
data gathered using the smart system).
1. SMART RESIDENTIAL CARE
2. DIGITALIZED HOME CARE
CURRENT DEMAND
What customers need: 1. A help with daily tasks that they are
not able to do anymore (grocery shopping, medication, laundry,
showering). 2. Socializing and having a feeling of belonging in
the society (friends in same age or with same interests).
CURRENT SUPPLY
What customers receive: 1. In residential care, customers
receive professional care but might experience a sense of
isolation from the society, lack of belonging and feeling of last
stop destination. 2. Staying home, there is lack of proper care
and also not much human interaction possibilities.
SOLUTION
Online platform matching demand with appropriate supply.
In seamless and intuitive design, elderly would be able to
request task, select the best offer, let supplier perform the task,
pay and rate the service.
The platform also has a socializing dimension to facilitate
people interaction and connection with similar people.
Executive Summary
Regis Overview
Analysis
Strategy
Conclusions
Appendices
supply for
demand aspect
socializing
aspect
See Appendix 9
See Appendix 10, 11

9. EVALUATION AND COMPARISON OF STRATEGIC OPTIONS
Digitalizing Home Care is more promising considering its possibilities and opportunities for
now and for the future in comparison with Smart Residential Care.
1. SMART RESIDENTIAL CARE
2. DIGITALIZING HOME CARE
The strategic options were evaluated based on following criteria: positive outcome, necessary inputs, estimated expenses, estimated
income, reaction of competition (0 – against the implementation / 5 – in favor of the implementation). (See Appendix 12)
0
1
2
3
4
5
positive
outcome
necessary
input
estimated
expenses
estimated
income
reaction of
competition
0
1
2
3
4
5
positive
outcome
necessary
input
estimated
expenses
estimated
income
reaction of
competition
MAJOR
POINTS
• Enabling elderly to make their residential care
experience easier
• Requires massive investments to change the
residential infrastructure
• Makes a slight change in income
• If becomes trendy wouldn’t be hard for
competition to copy
MAJOR
POINTS
• Enabling elderly to stay in society and get their
needs be done
• technological requirements
• reasonable expense, possibility of huge income
• new solution for existing customer segment,
competition doesn’t see the opportunity
• after implementing, it would be late to follow
the pace and growth.
è
The platform DIGITALIZING HOME CARE solves home care customers’ need and enables
them to remain a part of society seems to be MORE PROMISING BUSINESS STRATEGY
for both Regis and aged care customers for now and the future.
ç
Executive Summary
Regis Overview
Analysis
Strategy
Conclusions
Appendices

10. LEARNING LAUNCH OF DIGITALIZED HOME CARE
Developing the beta version and testing the platform for one month will allow Regis to test
key assumptions.
DEVELOP THE 1.0
VERSION OF THE
PLATFORM WITH
MINIMAL VARIABLE
PROPOSITION
CREATE SUPPLY AND
CARERS NETWORK IN
ONE GEOGRAPHIC AREA
CONTINUOUS
EVALUATION
GENERATE DEMAND
AMONG EXISTING HOME
CARE CUSTOMERS
TEST THE PLATFORM
BETWEEN LIMITED
SUPPLY AND DEMAND
DROP / CHANGE / LAUNCH
LEARNING LAUNCH DETAILS
ASSUMPTIONS TESTED
In-house development of a beta
version of the platform tested among
existing base of customers
Customers’ ability to use technology
Easy-to-use platform
Target a nursing school in a dense
populated urban area
Rely on workforce already engaged
with Regis Home Care
Staff expectations for flexible
schedule solutions
Staff mobility and involvement
Suppliers willingness to participate
Target customers in the same area as
target supply
Educate existing home care
customers to use the platform
Need for customized, on-demand pay-
per-use services (Home Care)
1-month test among existing base of
home care customers and both
existing and increasing supplier
network
Efficient match between supply and
demand
Need for more human interaction
(social side of the platform)
Executive Summary
Regis Overview
Analysis
Strategy
Conclusions
Appendices
See Appendix 13, 14, 15, 16
è

11. CONCLUSIONS
Investing in new technology, Regis will improve health and wellbeing of old people while
doing social good.
HORIZON 1
Solution: Platform matching
supply and demand
Key benefits: Daily tasks,
simple health care, social
interaction
HORIZON 2
Solution: Introduce more
professionals (e.g. doctors)
and “face time” enabling
distance communication
Key benefits: Advanced
health care
HORIZON 3
Solution: Integration of the
platform with the smart
home market standards
Key benefits: The care
receiver won´t have to
actively ask for help,
information is
automatically extracted and
acted on.
Switch in service offerings from residential
care towards home care
Change in business model, from performing
the service to enabling a match of supply and
demand. From striving for an integrated value
chain to using more partnerships.
New payment structure, from package
payment and government funding to pay
per use and commission
Elderly: Improved health care, increased
independence, flexibility and choice.
Government: Budget savings
Society: More flexible job opportunities, better
understanding between generations
Relatives: Can keep informed about their dear
one´s health condition, reduced stress
IMPLICATIONS FOR REGIS
IMPLICATIONS FOR INDUSTRY
STAKEHOLDERS
Value
Time
Executive Summary
Regis Overview
Analysis
Strategy
Conclusions
Appendices