Profamilia: Planning for Survival
Q. Referring to the case, analyze the situation and suggest the solution for Profamilia.
Dr.Tomayo established Profamilia in 1966 with the objective to dispense family planning, sexual and reproductive health programs throughout the Colombian population, in particular among economically less-forward class, providing high quality service. After foundation, it continued to develop with the support from USAID and various international organizations. But in the early 1990s, USAID, which was the principle international donor of Profamilia, cut down on its financial support. In addition, the Law 100 was enacted. This caused the crisis to the organization from then. Since then, Profamilia, which was relying largely on international donations, had to convert from donation-based financing to sales-based financing. As a result, Law 100 had to come to a situation in which it had to give up its relative monopoly in the field of family planning and compete severely with other rivals.
Since relying on donation cannot sustain the company, one certainly has to make profit by providing service and selling products. However, I recommend a solution that doesn’t damage the initial objective, which is social function, and make profit at the same time.
In the case of family planning, the company has to focus on providing service in rural and marginalized urban areas where the demand has not yet been satisfied, instead of competing severely with other competitors that provide similar services. In these marginal areas, there is high level of demand but due to the far distance and high transportation cost, people are not able to visit the clinic by themselves. Therefore, Profamilia uses its unique system, mobile brigade, to provide the service to these areas.
As seen in Exhibit 4, Profamilia provides too many services starting from family planning to overall functions of a hospital, legal service, etc. It is true that various