1. The Mayo Clinic would like to further strengthen their brand image and equity. Define the management-decision problem.

William and Charles Mayo began practicing medicine in the 1880s in Rochester, Minnesota. They were quickly recognized as extremely talented surgeons, and they gained so many patients that they were forced to think about expanding their practice. Around the turn of the century, the Mayo brothers began inviting others to join their practice. The partnerships that the Mayos entered into created one of the first private group practices of medicine in the United States. In 1919, the Mayo brothers turned their partnership into a not-for-profit, charitable organization known as the Mayo Foundation. All proceeds beyond operating expenses were to be contributed to education, research, and patient care. The Mayo Clinic (www.mayoclinic.org) has been operating in this fashion ever since. The Mayo Clinic’s primary value is, “The needs of the patient come first.” Its mission is, “Mayo will provide the best care to every patient every day through integrated clinical practice, education, and research.”
As of 2011, more than 3,700 physicians and scientists and more than 52,000 allied health staff worked at the original Mayo Clinic in Rochester and newer clinics in Jacksonville, Florida, and Phoenix/Scottsdale, Arizona. Collectively, the three clinics treat more than half a million people each year. Philanthropy is a big part of the Mayo Clinic. From the Mayos’ donations in 1919, philanthropy has been deeply rooted in the Mayo Clinic’s operations. In 2009, 118,000 donors provided $236 million in contributions, private grants, and endowments. These donations are used heavily in research and education, and Mayo’s capital expansion depends on these investments.
Total revenues for 2009 were $7.58 billion and net income from current activities was $333 million.