Aldersgate Enrichment Center
Strategic Alternatives
By: Marshall Thornhill
Strategic & Global Management
Rawls College Of Business
Texas Tech University
STRATEGIC ALTERNATIVES
!1
Executive Summary“
Aldersgate Enrichment Center is a 30-year-old faith-based non-profit organization tucked
away in quaint little Central Texas town called Early, Texas. Aldersgate was founded by a group
of Methodist Men in 1987 to enrich the lives of adults with special needs. What started as a 2-
man operation serving five adults with special needs, or associates, has blossomed into a 160-acre
campus that staffs 25 full-time staff and serves over 100 associates.
Aldersgate is able to serve these associates in multiple facets but for the purposes of this
project, we are going to focus on two: the vocational program and the residential program. The
vocational program is designed to give adults with special needs the opportunity to work in a safe,
friendly, and judge-free environment at their own pace and comfortably at their level of
functionality. We have staff that are dedicated to working with firms in the area such as Kohler
Co., 3M, TxDOT, and many others to find “work” that can be contracted out to Aldersgate and
performed on our campus. We have varying levels of work based on the different levels of
functionality of our associates. Our residential program is composed of two assisted-living
facilities that are home to 21 adults with special needs. Each home has four wings that include
three bedrooms and a shared bathroom. All bedrooms include furniture and a personal sink.
These facilities not only provide food and shelter to adults with special needs but our 24-hour
staff also work to teach each individual basic personal skills such as table manners, hygiene, and
budgeting. Our residents enjoy social time in the common areas of the houses as well as leisure
activities like weekly trips to the movies, bowling, shopping, and much more.
Because Aldersgate is a private organization and does not accept state funds, there is a lot
of freedom in how the organization is run. This has many benefits but also opens the door for a
lot of downfalls as well. For example, there is not a whole lot of structure or formalities within
this organization. This leads to communication issues, confusion about employees’ roles within
the organization, lack of strategies and clear long-term goals, and other inefficiencies. The
intention of this project is to utilize a SWOT analysis for Aldersgate to determine key issues
inhibiting the organization from potential success. Then we will provide potential solutions and
determine that the most beneficial strategic alternative is an organizational restructure.
Implementing this strategic alternative will improve Aldersgate’s position as an organization and
give it the most potential for long-term success.
STRATEGIC ALTERNATIVES
!2
Outlook Profile
In order to master the end goal of determining a strategic alternative, first we must identify
and understand the organization’s current strategy and where it stands amongst its industry so
that we can realize Aldersgate’s competitive advantages. First, let’s take a look at Aldersgate
Enrichment Center’s current strategy. As I’ve mentioned before, this is a very small, private
organization and there are few formalities. So, if you were to search Aldersgate’s website you
would not find a statement of its current strategy. If you asked the staff, they would not be able to
tell you a clear current strategy. As a matter of fact, the only individual that might be able to give
you an answer about Aldersgate’s current strategy is the executive director herself. Her answer
would be to hire caring individuals who are display characteristics of patience and compassion so
as to maintain a safe, comfortable community for our associates. Also to build and maintain
strong relationships with key personnel of local industries so as to keep contracting and
outsourcing jobs at the forefront of their mind. Lastly, produce a quality product that our
customers can rely on time after time. Most importantly, Aldersgate prides itself on its judge-free
Christian environment and strives to make that their number one priority at all times, even if that
means foregoing some business or grant opportunities. In general, Aldersgate’s strategy is to
differentiate themselves from the competition by being an all-inclusive community for a narrow
market which is serving adults with special needs. By contracting and outsourcing work from
local industries, paying minimum wage, offering a residential program, and life-skills training
Aldersgate sets themselves apart from the competition. As a whole, there is nothing exactly like
Aldersgate within the state of Texas. Sure there are other communities that provide assisted living
to adults with special needs. There are also other organizations that provide vocational
opportunities to these same adults. But nowhere in Texas is there a singular organization that
offers both vocational and residential opportunities to adults with special needs on one campus.
This is what makes Aldersgate so desirable for families and/or caretakers of our associates. We
have been given references for associates from all over the state of Texas and work closely with
the Texas Department of Aging & Disabilities (DADS) to maintain a waitlist for our residential
community. People want to come to Aldersgate because it is all-inclusive. There are no confusing
bus routes to remember for associates to get from home to work, there is no threat of being taken
advantage of by neighbors or fellow citizens. At Aldersgate, our associates work, play, worship
STRATEGIC ALTERNATIVES
!3
and reside all on one campus. As for competitive advantages, Aldersgate does have a few. First,
we do business locally only with local organizations. This allows us to cut shipping costs out of
the equation. Next, as a faith-based non-profit organization, we benefit from many hours of
volunteer labor. Many local churches, youth groups, and Greek organizations utilize Aldersgate
as their philanthropy. This helps us immensely by increasing our inventory without paying for
labor costs. Now, this is not something that we rely on heavily because it is not frequent and
definitely not dependable. We also have the luxury, or blessing I might say, of having over 1,000
people in our annual donor base. These groups, businesses, and individuals donate to Aldersgate
because they believe in our mission and the work that we are doing for our associates. These
funds allow use to update our facilities and improve our associates’ well-being in any way that our
donors see fit. Obviously, our competitors incur the same costs but do not have this same income
stream to utilize for them. Lastly, the land that our 160-acre campus sits on was a donation to
help start the organization 30 years ago. Our land and all of the facilities that sit on it are
completely paid for and we, therefore, have much lower overhead costs than our competitors.
As wonderful as Aldersgate sounds, there are current issues affecting the organization’s
performance. Without a doubt, the most pressing issue that I have found is that Aldersgate has hit
a plateau of growth and revenue. With that, we limit the number of people we are able to serve.
We also limit our resources by cutting administration expenses and asking our staff to double of
up on responsibilities. Another key issue is that there is no formal structure or hierarchy. This is
extremely significant when it comes to executing an organization’s strategy. A company must
have an organizational chart that is clear and concise for all of it’s employees to understand.
Without that, it becomes disorganized chaos. The next most important issue is Aldersgate’s
internal and external communication. This is key in keeping each department and staff in sync
throughout day-to-day operations. It is also extremely significant to keeping upper and lower
management on the same page. Lastly, it promotes efficiency by eliminating errors,
misjudgments, and other discrepancies. Also, the organization is very centralized and relies
heavily on the decisions and actions of the executive director. This creates a very dependent staff
and prevents the employees from becoming accountable and more loyal to the organization by
feeling like they have small ownership of any part of it. All of these issues lead to severe
inefficiencies in Aldersgate’s business.
STRATEGIC ALTERNATIVES
!4
All in all, Aldersgate has very little vision for its future and where it is headed. The mindset
within the organization, to the knowledge of the staff, is that Aldersgate stands to keep it’s doors
open and continue to serve adults with special needs. Of course, there are long-term goals such
as independent living communities and a leisure and therapeutic center to improve the associates’
quality of lives. But, as Harnish states in Scaling Up, “Goals without routines are wishes; routines
without goals are aimless.” There is currently no strategic plan to get to that point. Aldersgate’s
current strategy has had some success. This is completely to the credit of the staff and how much
passion they have for what they do and the well-being of the associates. Which, to some extent, is
a part of the current strategy. There is little to no competition, so it is hard to determine an intra-
industrial success rate of Aldersgate’s current strategy. However, with a strong balance sheet, little
turnover, and a waiting list of associates who have a desire to be a part of Aldersgate, there seems
to be some success. Fortunately, I believe there is room for a lot more success if a strategic
alternative can be proposed and executed to help Aldersgate change courses from a stagnant to
slight improvement in five years to a great improvement and large scale growth within five years.
Prior to my arrival, the organization used only word-of-mouth and physical mailboxes to
place typed and printed memos as forms of communication. There was no company email
system at all. If Aldersgate was communicating with a customer, state representative, or
associates’ families then they were doing it from personal email addresses. Also, there was no
team huddles, monthly meetings, or retreats. Currently, there is no type of formal planning or
agenda. The executive director meets with each individual manager (and sometimes each staff) to
discuss weekly or often daily agendas. Therefore, none of the departments are in sync or
understand what each other is doing unless they happen to discuss it informally in passing.
STRATEGIC ALTERNATIVES
!5
Internal & External Analysis
To fully understand Aldersgate Enrichment Center and its position in its product market,
we must do an analysis from both the external and internal perspectives. First, let’s take a deeper
look at the external perspective of Aldersgate. It is important to understand how Aldersgate
stands to do in its product market. That specific market would be serving individuals (particularly
adults) with special needs within Texas by offering both vocational and residential opportunities. “
“To do this, I am going to use Michael Porter’s 5-Forces Model. We are going to examine
each of the five forces for Aldersgate’s current situation as well as its situation in the near future
which we are going to express numerically as 3-5 years. Let’s first take a look at Aldersgate’s
current rivalry among competitors. As previously mentioned, to our knowledge Aldersgate only
has one other organization within the state of Texas that would be considered a direct
competitor. With Texas being such a vast area to cover and the competing organization being
located over 300 miles away, the force of a rivalry is extremely low. As far as Aldersgate’s
competitive rivalry in 3-5 years goes, I am going to say will be unchanged and will be extremely
low as well. There is just far too much distance between these two organizations to ever cause a
rivalry to form. Next, lets take a look at the threat of new entrants into the market. Aldersgate
has had it’s doors open for 30 years now and has never seen another competing organization
open anywhere in the area that might take business away. Therefore, currently and in the near
future Aldersgate’s threat of a new entrant into the market is low. Let’s move on to the threat of
substitute products. Currently, Aldersgate faces an average threat from substitute products. There
are other organizations available that offer some vocational work. Some organizations simply
offer “day-hab” or caring for these individuals during the day while the caretaker works.
Sometimes, that is all that the family or caretakers needs is just an organization that will care for
their special needs individual while they go to work or tend to other important matters. Then,
some organizations offer life-skills development and residential opportunities such as assisted
living facilities. So there is an average threat that families or caretakers can utilize multiple
organizations to fulfill what Aldersgate comprehensively does. In the near future, I do not see that
threat increasing any and it will continue to stay. With a narrow market, there is not a whole lot
of appealing business opportunities and in order for people to “piece together” what Aldersgate
does, they would have to solely use local organizations. That makes the market even more narrow
STRATEGIC ALTERNATIVES
!6
for these substitute organizations because they will be serving an extremely narrow market of
special needs adults in a small community in central Texas. The bargaining power of buyers
offers a very low threat to Aldersgate. Our strategy is to differentiate ourselves and serve a narrow
market. That, on top of our decent-sized waiting lists really gives buyers no room to bargain. We
can just as easily pass on one buyer and move on to the next because we are a rare commodity
and are in high demand. This situation will not change for a very long time, so Aldersgate will
not see a threat from buyer bargaining power in the near future either. If we were to solely take a
look at our vocational program with this same lens, however, we would see an average threat to
bargaining power of the buyer. This is because there are a handful of competing organizations in
the area that offer the same product as us from a contracting standpoint. For example, we have a
contract with TxDOT to pick up litter and do all the landscaping for highways and roadside
parks in Brown County as well as seven surrounding counties. There are other businesses that
offer that same product and there is an average threat that TxDOT could come back to us when
it is time to renew our contract and “price shop” with the other businesses to drive us to offer a
lower cost. As industries continue to move to the central Texas area, I predict that the bargaining
power of buyers will become a higher threat in the near future. Again, however, this is solely
