[GLOBAL SOURCE

HEALTHCARE:ALLOCAT
ING SALES
RESOURCES ]

The Global Source Healthcare provided domestic and worldwide staffing

services to healthcare facilities. The founder and CEO is Shamail Siddiqi, who
saw the opportunity in international sourcing for healthcare companies.
In the summer of 2003, the founder and CEO of Global Source Healthcare
was fighting with the best way to allocate sales resources among acquiring
new accounts, penetrating existing accounts or even more-selling existing
accounts. The business happened to be operational for just about any year
and growth happen to be substantially reduced than expected. What made a
decision to choose to do this particularly significant might be the healthcare
staffing market was dealing with a substantial recession.
Healthcare staffing involved the recruitment and placement of clinicians at
healthcare facilities, including nursing staff, such as Registered Nurses which
hospital expenditure on it was projected to growth at ten percent per year.
Hiring full-time employees took ninety per cent of the companys fund.
Demographic drivers and the trend towards outsourcing influenced the
demand for healthcare staffing. Healthcare staffing was a supply-driven
business. Two-thirds of all job orders continued to be left unfulfilled, because
every staffing company was competing for the same domestic pool of nurses,
therapists and other allied health professionals.
Request for proposals (RFP) is a single network contract could increase the
client base dramatically and expand the staffing companys reach worldwide.
It was used by large healthcare corporations but Global Source had been
unsuccessful to obtain a contract due to the fact that RFP requires an
established track record.
Siddiqi wanted to continue with variety services while making Global Source
Healthcare become a one-stop-shop for hospital outsourcing needs.
Consolidation was occurring on the market. Due to the limited sales and
financial resources from the organization, this decision was critical to be sure
the very survival of Global Source.
Other concerns that could be elevated include knowing the sales strategy in
the market and web marketing strategy, motivating a sales pressure in the
difficult, limited-resource atmosphere, and knowing the trade-off between
how big the sales cycle and just how large the chance account.
Global Sources sales strategy was to position itself as an international
recruitment company with domestic travel staffing being an additional
feature. Their differentiation strategy involved providing hospitals with a
consistent supply of qualified nurses that were mainly outsourced from India.
In addition to this, they offered discount-billing rates of domestic travel staff
if hospitals signed both international and domestic staffing contracts.
Given the fact that the company is facing bankruptcy, it can be said that their
sales strategy has not been effective. Although the companys initial target
strategy to focus on one single market to increase sales seemed like a
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reasonable strategic move- it backfired as the company failed to recognize

the potential domestic accounts have and instead aggressively pursued
acquiring nationwide accounts. Since going global acquires a great amount of
capital and the company was already short on financial resources, CEO
Siddiqi decided to enter the domestic staffing market to finance the
international recruitment business.
Siddiqi came to a conclusion by looking at each markets offering:
The international market had a competitive advantage in international
staffing nurses with staffing margins of 50-60%. Siddiqi thought by
tapping into India, a new recruiting market which had a large supply of
qualified nurses, will drive competition away as they will have
difficulties understanding the local dynamics of the Indian market. Due
to this reason the company also established a strategic alliance with a
CGFNS- test-preparation company in Bangalore to source Indians
nurses.
The domestic market had become a highly saturated market, where
healthcare-staffing company's like Global Source did not have s
distinctive competitive advantage, as they were easily replaceable as a
vendor. In addition to low staffing margins being not more than 1015%, this market was highly competitive.
Nonetheless, the company was operating in both markets and was only able
to sustain in the domestic market by offering discount-billing rates to
contracts.
One of the company's main issues was their cash supply. As the costs of
operating in two markets simultaneously were rising, the company was
relying on unsteady cash flow streams. Global Source suffered from the
fraudulent behavior of other companies scamming hospitals, which raised
suspicion and hesitance within the healthcare industry. As a result, Global
Source Flat Free Model for international recruitment produced financial
irregularities, as some of the contracts did not pay any fees upfront, which
resulted in late cash flow streams.
Another issue the company faced was the fact that oftentimes different
people or departments were in charge of staffing. The people responsible for
international staffing did not reap any benefits by negotiating better billing
rates for domestic staff. Moreover, Global Source positioning strategy of
being a competent staffing specialist in the healthcare industry did not create
the buzz Siddiqi had expected as many hospitals were not used to
collaborating with one company that deals with both domestic and
international staffing. Due to this reason, the company was forced to offer
deep discounts, in order to acquire domestic travel staffing contracts.

- If you fail to plan, you plan to failAs the companys currently in poor financial health, Siddiqi should not only
think about changing the sales strategy, but also 3 other critical areas such
as the companys structure, the people involved directly and indirectly and
the process. The key is to increase revenue by aligning these four areas by
setting specific, measurable goals and tactics. These three recommendations
have been identified:
1. Dominate the Tri-State Area:
Global Source entered the industry with a clear and powerful sales strategy,
but unfortunately did not have the necessary financial means to back up
their preposition. When looking at the market opportunities, they overlooked
a major opportunity, which they only considered to be a stepping-stone to
generate enough capital. Although the domestic market may have not
seemed to be as affluent as the international market, Siddiqi was able to
secure the Department of Veterans Affairs (VA). The collaboration with this
extremely important client for domestic travel staffing, does not only serves
as an excellent reference account, but it also opened a window of opportunity
for further expansion as the VA owned a network of 163 hospitals worldwide.
Another excellent opportunity that should be seized is the tri-state area of
New York/New Jersey/Connecticut that has up to 500 hospitals most of
which have not been qualified as prospects yet. Giving the fact that 80% of
Global Sources revenue was derived from the top three largest New York
hospitals, gives them the enough credibility to approach the many prospects
in the tri-sate area. Furthermore, by firstly focusing on existing accounts,
especially in markets where Global Sources has already gained access to,
increases the chances of attaining more market share, increasing revenue
streams, raising brand awareness and driving competition away. By secondly,
having a large clientele and raised enough capital, cross-border expansion is
more likely to be successful. Therefore, the aggressive account acquisition
that Global Source has been exercising on international accounts should be
put to an end, as this is not only an strength-sapping process for the sales
personnel, but also puts a strain on the companys expenses.
2. Simple Service Offerings:
Global Source provides their clients with three service options: an
international, a domestic or a combination of both staffing service. As the
article states that the combination package was only favorable amongst few
clients and that many hospitals were accustomed to dealing with separate
companies for international and domestic staffing, makes this option
redundant. Since this option has not been requested that often, costs can be
cut by completely eliminating it from their service offerings. Even if the
savings are minimal, the company can still benefit from any cost reduction,
considering their current financial state.
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3. Future Collaboration:
The article mentions that recently an IT company has approached Global
Source to form a strategic alliance. Their technology-based vendor
management system should serve as assistance when dealing with clients
and provide an additional source of revenue. This tool will definitely be
necessary and beneficial for Global Source as market dynamics are
constantly changing. In addition to this the company could use the extra
boost in revenues given their current financial situation. Nevertheless, since
there is an extremely high market share acquisition potential in the tri-statearea it would be wise to pursue this option thoroughly and reject the IT
companys offer at this moment. Once Global Source has made a financial
turnaround they should definitely negotiate a new deal with the IT company
as technology is a given in any industry. In addition to this, if Global Sources
turnaround has gained them enough credibility, they will be able to alter the
profit-sharing terms to work in their favor.
When it comes to the evaluation of the available options, there are three
options for Global Source Health Care to allocate its sale resources:
Continue aggressive account acquisition
Cross-selling existing account
Penetrate existing accounts
So, lets have a deeper look on each options and see which benefits and
limitations that Global Source have for each options.

Continue aggressive account acquisition: Cold calling hospitals, continue

current sales strategy
It was small chance to acquire new accounts due to the increase of number
of hospitals put news contracts on hold. Therefore, expanding the account
base quickly was a good choice. The Department of Veterans Affairs (VA) was
one of the most important contracts for domestic travel staffing. VA owns
network of 163 hospitals. VA is the excellent reference account for Global
Source Healthcare to expand its struggling domestic staffing business.
Nevertheless, there are too many competitions. The needs of large number
of nurses for the VA systems had to be considered. Another point is that it
would be at the expenses of taking away effort from competitive advantage.
VA is only large business prospect.

Penetrate existing accounts: Up-selling to current accounts

On the supply side, hospitals are hesitant to bring on new staffing
companies. Global Source is secondary vendor in marketplace for domestic
staffing and can be easily replaced. Siddiqi wanted to emphasis on
relationship-building. Sales people would have to allocate much more time to
contacting hospitals on daily basis for job openings and for regular meeting
clients in person.

On the international recruitment side, there is not enough expenses or

resources to recruit large international staffing because of the logistics of
international recruitment were quite complex and needed constant attention.

Cross-selling existing account

Obtaining international recruitment contracts by cross-selling the other
service to clients help entrench Global Source in current account and reduce
the likelihood of being eliminated from domestic staffing. It would also
maximize the revenue potential from each client. It is also easy to up-sell
existing international recruitment clients on domestic staffing.
However, it is complex process that many hospitals are unfamiliar with.
Clients need to be educated on benefits of international recruitment. Client
relationships were too new and fragile, and pursuing this venture would
further dilute the companys resources, time and focus.
As for the implementation, the Global Source can take two options into
consideration, naming international and domestic staffing breakdown.
However, the latter option has low staffing margins (10-15%) and the market
is very competitive, so it would be better to choose the international market.
The competitive advantage in international staffing of nurses is an important
aspect of the international staffing breakdown. What is more, the untapped
Indian market can also be considered as plus, since the competition has
difficulty in understanding the local dynamics of the Indian market.
Furthermore, there is the established strategic alliance with a CGFNS testpreparation company in Bangalore.
Since market is of vital importance, a company cannot be successful without
knowing which market it operates. Due to the fact that the company was
only able to sustain in the domestic market by offering discount-billing rates
to contracts, cash supply became one of the firms main issues. First and
foremost, the company should take the number of cash flow revenue into
consideration. Low-skilled workers should be trained and motivated, although
the firm should not spend too much money on that. Meaning that the
company should focus on the training of the low-skilled workers while trying
to minimize its spending.
To sum it up, in contrast Siddiqi decision to enter the domestic staffing
market, the company should try to enter the international market, since it is
less saturated than the domestic market. Cash flow revenue and motivating
workers are crucial when it comes to making the company more successful.
So in order to make Global Source more effective, these changes should be
taken into consideration.