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 companys products to its markets that are growing explain new product development as a growth strategy, using the example of the Portakabin WardSpace product identify key environmental factors (SLEPT components) that have led to a growing market for healthcare products show how the development of the Portakabin WardSpace building was research driven give examples of how the Portakabin WardSpace design was developed to meet the needs of the market explain how Portakabin WardSpace accommodation provides a cost effective solution to healthcare provision 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 customers 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.

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 Shepherd family. This integrated Group is involved in the hire and sale of interim and permanent accommodation.

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 clients needs e.g. Portakabin Hire supplies interim accommodation and fittings such as air-conditioning, on hire, whereas Yorkon manufactures complex, architecturally designed permanent buildings.

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 S

Existing products Existing markets Market penetration

New products Product development A new product e.g. Portakabin WardSpace accommodation tailored to the needs of a growing market (healthcare).

The Portakabin Group

European Division Scottish Division Yorkon Limited

Hire Division

Sales and International Division

Foremans Relocatable Building Systems

Selling more of the same type of product to the same type of people.

E
New markets

Market development Diversification Finding new customers for an existing product. Developing new products and markets.

Sarl (France) BV (The Netherlands) GmbH (Germany) Portakabin Limited (Belgian Branch)

Portakabin AirCare Portakabin Interiors Portaloo

Portakabin Total Solutions Portakabin Fire & Security Systems Portakabin Access

Product range and development

Portakabin produces a range of specially tailored products for different markets, including: Portakabin WardSpace hospital wards Ultima office buildings Lilliput nursery schools.

Portakabins growth strategy is well illustrated by its Portakabin WardSpace building, that fits neatly within the product development sector. Portakabin has supplied the healthcare industry with modular buildings in small numbers for a number of years. Recently, there has been an increasing demand for new high-quality healthcare buildings to relieve severe shortages of space in many hospitals. Portakabin has therefore developed a new product: Portakabin WardSpace. It is designed specifically to supply hospitals with much needed 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 demanding a design solution that not only satisfies functional requirements but is also economical in both its capital and running costs i.e. cheap to build, use and maintain. 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.

These buildings have attractive layouts, and good aesthetic qualities both internally and externally. They are also highly energy efficient, with positive impacts on the environment. 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 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.

Lilliput nursery

www.tt100.biz

E-learning exercises

Theory for revision

Case study downloads

Company information

www.tt100.biz

Edition

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 todays society is the publics own increased expectations about the quality of the delivery of services, whether in the public or private sector. The Patients 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 its 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 governments 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 governments 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 patients vicinity, thereby improving efficiency.

Research and Development

The environmental analysis revealed clear opportunities to develop Portakabins 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, Portakabins 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.

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.

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 Portakabins 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

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.

Strategy:
A long term plan.

For further information about Portakabin please browse:

www.portakabin.com

www.tt100.biz

E-learning exercises

Theory for revision

Case study downloads

Company information

www.tt100.biz

Edition

The Times Newspaper Limited and MBA Publishing Ltd 2003. Whilst every effort has been made to ensure accuracy of information, neither the publisher nor the client can be held responsible for errors of omission or commission.