246 ENTREPRENEURSHIPCase Study: EMC Site Expansion
Dr. Anthony Petrillo founded the Emergency Medical Center as a free-standing emergency cen-
ter (FEC). The FEC concept, relatively new at the time, is a cross between a physician’s office
and a hospital emergency room. The typical FEC offers extended hours (8 a.m. to 11 p.m.), has
lab and X-ray facilities, and will treat any non-life-threatening trauma or medical problem on a
no-appointment basis.
The EMC opened in 1982 and grew rapidly its first year. Then Dr. Petrillo learned that a good
location had become available in another section of the same city, so he considered opening a sec-
ond center. Based on a study of traffic patterns and population density in the area, proximity to
area hospitals, and the sales experience gained in EMC #1, sales forecasts for EMC #2 were pre-
pared. After leasehold improvements, equipment costs, and operating expenses were estimated,
opening EMC #2 looked like a good idea.
The facility opened with a fanfare of advertising and press releases. Sales immediately exceeded
the first month’s forecast, but after several months of continued growth, sales (that is, patient vis-
its) leveled off below the break-even point. Forecasted growth did not occur, and cumulative oper-
ating losses mounted. Remedial action was taken in the form of intensified advertising. A person-
al selling program was directed at area businesses whose personnel might need treatment for work-
related injuries. Neither effort stimulated the necessary growth. Less than a year after its opening,
EMC #2 closed and consolidated its operations with the original—and still successful—EMC #1.
Convinced, in spite of EMC #2’s failure, that multiple sites could offer important economic
advantages in terms of advertising, purchasing, and management, Dr. Petrillo continued to seek
feasible locations for a second EMC facility. Eventually, a real estate developer contacted him
about a site being developed in a small town about 22 miles outside the city where EMC #1 was
located. The development was situated at the intersection of an interstate and a state highway in
a town with one general hospital, a student health service on a university campus, and about 18
private physicians’ offices. The developer and several of his financial backers believed that the
community’s growth warranted additional medical facilities. They were planning to construct
single-story building on the site and were willing to finish a 2,000-square-foot section to Dr.Case Questions
1.What was the primary challenge for J & R’s Web-based marketing strategy?- How did it meet this challenge?
- What challenges does J & R face for the future?
- How is J & R meeting this future challenge? What additional recommendations do
you have?
APPENDIX
SOURCE: This case was written by Kenneth E. Marino for his book Forecasting Sales and Planning Profits(Chicago: Probus 1984).
It is reprinted here with the generous permission of its author.