WALDEN MANOR
Health Farm
Walden Manor is a 35-room stately home in the countryside near Leominster that has been converted into a year round, 24/7 spa or ‘health farm’. Situated so far from London, it cannot compete with the market leaders whose clients include celebrity entertainers, actors, and sportsmen and -women. Instead it aims at lower market segments – people earning £75,000 p.a. upwards. Hunting and shooting figure among outdoor pursuits on offer, while beauty treatments, podiatry, and a specialist rehab facility for recovering alcoholics attract B-list celebrities and the middle-aged middle classes.
Portfolio
All sorts of packages are offered to guests, from hiring a room (all rooms are double or larger) or a suite, just like a hotel but including premium access to any treatment or class at the upper end, down to visiting for specific sessions only at the lower end. Basic deal overnight guests can use all facilities free (pool, sauna, sun studio, gym), but classes, treatments, and therapies cost extra. Day-visitors are given an activities ‘menu card’ on payment. Options are set out in groups and the day-visitor is entitled to select one or sometimes two options from each group throughout the day. (The whole process can also be completed online.)
Significance of spa services
Walden Manor operates at a 13% margin on its overnight guests alone. Any business attracted in addition to that, provided that it can show a net profit in its own right, will contribute directly to profits. While the catering is outsourced, gross profits from all the classes, therapies, treatments, and other services accrue directly to Walden.
Alternative therapies
Up to 2012, Walden Manor had stuck to offering exercise routines, physiotherapy, dietary regimes and spa treatments that were either traditionally accepted as beneficial or were well supported by medical research. But since many so-called ‘alternative’ therapies had now become mainstream Walden was in danger of losing clients and a management meeting had met to consider what to add to its portfolio.
‘Product’ development
Moira Livingstone, Walden’s marketing manager, had been making a case for incorporating massage into the Manor’s portfolio since 2009. Her market research indicated that 20% of guests thought they would use a massage service at least once every three months and 5% thought they would use it once a month if it became available.
Since the gross profit on a massage would be around £35 and the number of overnight visitors could be assumed to total around 8,000 p.a. (counting each overnight stay as a separate visit), this would represent a large additional revenue stream. Moira could hardly believe her figures and thought they must be over-optimistic for some reason. But even if massage generated only half as much as her forecast, a massage studio would still pay for itself more than twice over within the year.
Massage
Back in the 1970’s, ‘massage’ had been synonymous with ‘prostitution’ and for many members of the public that image lingered in the background. Partly for that reason, partly because Walden lacked space, and partly because of the difficulty of ensuring that staff had no record of any offence against the person and in particular no record of any offence of a sexual nature, Walden Manor had not offered a massage service.
Staff
These days, there is a national system for checking the record of appointees. Because massage work is of an intimate nature it requires an enhanced record check (which also reveals ‘spent’ convictions and complaints) with the Disclosures and Barring Service. The check has to be updated every year.
Space
A new racket-sports centre, accessible from the main Manor building by a 200m path across a field, has now opened. Walden is a 20% stakeholder in the project on the understanding that Manor customers have access as part of their package. This has freed up the area at the Manor occupied by two aging squash courts, which can now be refitted for a more profitable facility.
Facility refurbishment
The Facilities Manager, in charge of building maintenance, repair, and development, was more concerned with the costs and the lead time to fit the allocated area with showers, changing cubicles, lockers, couches, heating, lighting, hot and cold water, mirrors, and seating. The building work alone would probably take 3 weeks once it got started and there was no saying when reputable builders would be free.
The problem then would be that all other tasks to be performed would have to be booked in advance and dependent on the builder keeping to schedule. Any delay could extend the project to three times its estimated length or possibly longer. He and the Human Resources Manager presented the management meeting with the following:
Lead times
The project team realised that some things would have to be initiated early for, even though they would not take that long to do, it would be some time before the results of having done them would be felt. For example, beginning the staff recruitment process, ordering the furniture and fittings, and promoting the new facility would not occupy a lot of staff time, but they would have to be carried out early on, because the staff, the furniture, and the customers would not arrive for some time after these processes were complete.
Parallel tasking
Of course, the key to keeping the completion time to a minimum would be to undertake as many tasks as possible in parallel, but it was important that tradesmen, decorators, and designers should not be tripping over each other and that the dust or rubbish created by one process should not be allowed to contaminate another operation.
Table 1: Critical Path Information for massage studio
Task Description Estimated time (days) Necessary
prior tasks
A Procure fittings, furniture, and massage couches 60 –
B Clear existing fittings and fixtures 3 –
C Fit new lights 3 B
D Build shower cubicles and single lavatory 5 B
E Finish cubicle fixtures (tiling, electricity supply, water supply, etc.) 4 D
F Complete shower and lavatory fittings (doors, rails, etc.) 1 E
G Erect partitions to separate massage areas 2 C
H Fit wall coverings and curtain rails 4 F
J Locate and secure massage couches and connect them to the electricity supply 2 G
K Erect reception desk 1 G
L Lay floor coverings 3 G,H,J
M Move in office and visitor furniture 1 K
N Hang curtains 1 K
P Procure and lay out additional equipment (towels, supports, oils, etc.) 2 L
R Launch promotional campaign 30 –
Recruit staff (advertising, head-hunting, etc.) 30 –
S Enhanced DBS clearance 10
T Select candidates (interview, etc.) 10 R
V Brief and train staff 1 S
W Test facility using staff in all roles 2 T
Open for business –
Massage clientele
Moira’s market research suggested that massage clients would be a mix of overnight guests with a room and day-visitors, who would need somewhere to store their things. Furthermore, a guest’s massage would have to be logged to be added to their bill, whereas a day-visitor’s massage would only have to be ticked off on the visitor’s menu card, which recorded their use of what they had paid for on entrance and which they carried with them. The system was familiar throughout the Manor.
Recruitment hitch
Moira thought recruitment of staff would still present some difficulty because masseurs and masseuses tended to be qualified in either aromatherapy or Swedish massage, but not usually in both. Over the last five years the situation had changed somewhat with more ‘double qualified’ practitioners, but they were still less than 5% of all practitioners.
Catering
Catering is outsourced to Walgrove Catering Services, a company headed by a well-known chef. WCS pays Walden £40,000 p.a. for its franchise. The average customer spend on WCS supplied products while on the premises is £40 per head. Since most rooms are occupied by more than one guest, WCS’s potential customer base is slightly under double the number of rooms sold.
Massage operations
Moira suggested there should be two distinct categories of massage:
• Full Swedish massage, and
• Aromatherapy massage.
The customer would specify which on registration (if a day-visitor) or on booking (if an overnight guest)
In either case, the massage cycle takes 1 hr 20 minutes. The customer arrives in time to take a shower beforehand. 15 minutes is allowed for this. The massage itself takes Between 45 and 55 minutes and the remaining time is for the customer to chat, or get advice, or simply recover. The masseur/se will often also require time to recuperate from one client and prepare the booth for the next.
For reasons of hygiene footwear must be removed before entering the massage studio, hence flip-flops or some other form of footwear will have to be supplied for those who have not brought their own. Massage clients will similarly be given towels by the duty receptionist
It is envisaged that clients who have showered and are waiting for massage will be able to order, receive, and comfortably consume a non-alcoholic drink within a five-minute wait.
Manor facilities, including massage, are supplied 10.00 – 22.00 (last massage 21.00) Monday – Saturday and 10.00 – 20.00 (last massage 19.00) on Sundays
Massage will be on offer on 360 days of the year.
Answer the following Questions
1)
capacity
a) Explain
i) what is meant by “capacity”, and
ii) what figures you would use to calculate Walden Manor massage studio’s capacity contribution (gross profit).
b) Calculate the massage studio’s capacity revenue at £80 per massage.
c) If the number of guests who indicated they would use the massage service in Moira Livingstone’s survey did in fact use the service as often as they said they would, paying £80 a time, what would be the massage studio’s capacity utilisation?
2) Bearing in mind that
• staff are allowed regular breaks, time off for training, holidays, and sickness and emergency absence and cannot be treated as if they were machines, and
• the studio is open for twelve hours a day, whereas the greatest number of massages that a single masseur/se could reasonably manage in an eight-hour working day would be six.
a) Justify
i) how many staff would you hire in total, and
ii) what would be the nature of their employment, and
b) outline what would be their main practical tasks.
3)
a) Using the information given in Table 1 on page 4 of this Case Study, draw a network diagram for the preparation of the massage studio for business. (20)
b) Indicate the critical path
c) Explain what is meant by ‘free float’ and illustrate this by reference to your network diagram.