Heaven Vet Clinic operates veterinary services. The seven clinics in Klang Valley offer a variety of services including general health checks, surgery, lab tests, pet hotel and grooming for small animals. The small animals include cats and dogs. About 90% of the business is the service of vaccination, neuter, soft tissue surgery, diagnostic test, lion-cut, ear-cleaning, shampoo and bath and pet boarding. The main goals of the founder, Dr Wan are growth and profitability; growth now and profitability later. He sees the business as vet services in which other clinics provide essentially the same services, and the competition is on price and quality. From his nine years in the business, he knows that any services provided has to be high quality small animals' health care or it will lose customer promptly. Therefore, he maintains high quality services as a necessary component of his business, and uses price and customer services to gain competitive advantage. The medications prescribed are also non generic drugs, The strategy has worked well for Dr Wan as he has been able to grow from a single clinic nine years back to seven clinics at present around Bangi, Putrajaya, Ampang and Petaling Jaya. The additional branches are managed by his extended family like his siblings, cousins and uncles. To achieve a competitive price, Dr Wan watches the costs carefully and limits the amount of profit margin that he expects from each client transaction. He looks for only an 8% markup over the total costs of the service. This policy has meant that initially his take-home profits were not great, but the low fees charged has enabled him to attract clients and to grow the business. Total profits have increased as the business has grown. To enhance his low-price approach, he has devised efficient techniques to provide his service, and he urged his employee to follow his techniques to be very efficient to their time and use of materials. He also has a profit-sharing plan that rewards each branch clinic employee when cost-per-service declines at that branch. Required: a) Briefly explain the strategy that Dr Wan implement to run his business. (4 marks) b) Dr Wan's pricing and employee-incentive policies support this strategy. Comment on the statement. (4 marks) c) Discuss the potential problems Heaven Vet Clinic may encounter despite the above statement in (b) above. (6 marks)