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“But we have to grow with or without the three million!” said Cristina, “Elena has already started coaching our franchisees and Teresa is about to start her inspection visits. I agree it would be easier if we owned the centers, but our strategy of constantly introducing treatment and services innovation is a winner.”
“I agree,” said Jesus, “The franchisees are meeting their economic targets. Our differentiating factor lies in constantly providing new services.”
They both looked at Cathy. She was Vitalia’s R&D department but also personally involved in the process of franchisee selling .To free her from that would mean more time to innovate. They had frequently discussed whether to stop growing and consolidate what they already had, and this new investor could be a way to achieve growth and consolidate.
“Well,” Cathy said, “I think we need to explore other avenues with the investor. What could we offer him? How much power are we willing to give him? Should we forget about him and speed up the master franchise? Let’s all think about it for a couple of days.”
Cathy walked towards her own Madrid center, just a block away from headquarters. The original center with 2,100 square feet was now an impressive 7,500 square feet with spectacular windows overlooking two of Madrid’s principal roads. She could see Vitalia’s neon sign with the green clover logo flashing in the night.
“I’ve fulfilled part of my dream,” she thought, “Now I need to keep on growing. I have requests from Latin America and from other countries throughout Europe. Should I convince the investor to create a new company to attack these markets or should I concentrate on Spain first? Am I willing to lose my freedom? Am I trying to grow too quickly and are we handicapping our future?”
Analyze Vitalia’s alignment with the Six Factors [5] and its business model
What advice do you have for Cathy Hoffman regarding her growth strategy on the basis of this analysis? Assume she will need to give up 40% of the firm in exchange for the €3 million.
[5] For more information, see Regina E. Herzlinger, “Innovating in Health Care—Framework,” HBS No. 314-017 (Boston: Harvard Business School Publishing, 2005), revised 2014.
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