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1. CASE STUDY:APOLLO HOSPITALS OF INDIA PRESENTED BY: SEBY
AUGUSTINE(31) SAURABH NINAMA(23) VINOD VASAVA(37) POOJA
TANNA(35)
2. INDUSTRY ANALYSIS
3. About the Industry Health status varied Lag in availability
of medical personnel & facilities Country Per 1,000,000
population Doctor Nurse Hospital beds India 407 214 1600 U.K 1615
7891 8000 U.S. 2380 3204 5900
4. Health care provided by State Government National Government
By 1995, existence of150 Corporate comprehensive hospitals
Estimation of 250 private hospitals by the year 2000 Out-of-pocket
payment by patients Emerging middle class Upcoming markets
5. Porters 5-force model Threat of Substitutes Bargaining
Bargaining Forces of power of Power of competition Suppliers Buyers
Threat of New Entrants
6. Threat of Substitutes- limited No substitute for medical
care A basic requirement
7. Threat of New Entrants- High High capital costs Long
gestation periods (2 to 4 years) Industry- an attractive
proposition due to High growth potential of the sector Stimulation
to private sector An estimation of having approx 150 corporate
hospitals by 1995 250 private hospitals by 2000
8. Competition - Intense Large number of players in the
industry Govt. Hospitals A strong competition High exit barriers
(due to high capital investment)
9. Bargaining power of suppliers-High Referral doctors served
as a major source of customer base.
10. Bargaining power of Buyers-Limited No substitute
11. About the Company Founded in 1983 by Dr. Pratap C. Reddy
First Corporate hospital in India Comprehensive For profit Grew out
of Dr. Reddys own practice Obstacles Regulatory Financial
Combination of professional management structure and
entrepreneurial approach
12. Management Philosophy Clear Vision High quality medical
care With a human face Had no models to emulate. Apollo hospital
organized around 5 stars Medical Personnel Medical Technology
Employees Hospitality Value
13. Critical Success Factors (CSFs) CSF, sometimes referred as
to strategic factors are those which are crucial for organizational
success. When strategists consciously look for such factors and
take them into consideration for strategic management, they are
likely to be more successful while putting in relatively lesser
effort.
14. Probability of Impact on business Impact High Medium Low
High Critical High Low Medium High High Low Low To be watched Low
Low
15. CSFs for Apollo HospitalsProbability of Impact on Impact
business High Medium Low Market, Quality, High International -
Regulatory Socio-cultural, Medium - - Economic Low Technological -
Political
17. Market Environment Enormous , unmet demand for high quality
health care among Indians Hospital Sector Private Nursing Homes
Government Hospitals Factors Rates No. of beds Services Technology
& Settings, facilities
18. Technological Environment Expensive but no large scale
sudden changes
19. Economic Environment Economic Development pursued by Indian
Government after independence Central planning Import substituting
industrialization Liberal economic reforms in 1980
20. Regulatory Environment A new round of changes :
Introduction of new industrial policy by Prime Minister Dismantling
of licensing requirement Elimination of Government monopolies,
reduced tariffs and liberalized foreign investment Stimulation of
private sector growth Rao reforms leads to immense market
excess
21. Political Environment Politics had no great role in the
industry. Although lobbying could be used as an influence Lobbying:
Presenting the idea to Prime Minister Liberalization of hospital
sector, allowing broad access to financing and encouraging hospital
development.
22. Socio-cultural Environment Worlds largest democracy Variety
of Economic levels Social status Cultural Group Co-existence of
poor and middle class
23. International Environment High quality medical care
available internationally as compared to India Brain Drain - A big
issue
24. Environmental Sector Nature of Impact of Each Factor
ImpactMarket Enormous , unmet demand for high quality health care
among IndiansTechnological Expensive but no large scale sudden
changesEconomical Economic Development, Liberal economic
ReformsRegulatory New Industrial Policy, Rao reforms, Dismantling
of licensing requirementsPolitical Politics had no great role in
the industrySocio-cultural Worlds largest democracy, Co-existence
of poor and middle classInternational High quality medical care
available
25. STRATEGIC ADVANTAGE PROFILE (SAP)
26. Financial capability factors Initial skepticism faced
Convincing investors that a super- specialty hospital was viable in
India A capital of $4.6 M issued through shares Colleagues
contributed to 40% of stock By 1995, growth and potential of the
company attracted foreign institutional investors. Financial
performance had not been affected by competition despite the
appearance of 5 other private hospitals in Madras Readiness of
investor to invest
28. Marketing Capability Factors Marketing capability factors
could be segregated into four basics categories: Product Promotion
Price
29. Product High quality services as compared to competitors
Specialized services High success rate meeting the international
standards(88%) High sanitary standards Quick diagnosis Providing
six categories of Rooms (Ranging from
30. Promotion Creating awareness : An initial challenge Concern
on ethical propriety Focused on encouraging awareness of preventive
health measures Goal of developing long term trusting relationship
with patients
31. Promotion Aimed marketing effort at women Marketing
programs Referrals Hospital capabilities Awareness programs Public
Local schools
32. Promotion ApolloHeartbeat : A quarterly news paper Low
priced check- up packages Advertising of Special priced diagnostics
packages
33. Price Higher prices in comparison to the competitors.
34. Operational Capability Factors Effective utilization of
equipments Average stay of the patient is less in comparison to
competitors Apollo : 7 Days Other hospitals : 9 Days Govt. : 12
Days Quick diagnosis & treatment
35. High success rate A well maintained library provided access
to key medical journals & reference books from around the world
Online bibliography search system
36. Personnel Capability Factors Top caliber renowned doctors
and surgeons 120 doctors from U.K. and North America Employees: The
Middle Star for Apollo Team spirit An understanding about Apollos
large ambitions in each employee Strong sense of Community
37. Wages Apollo hospital : 10-20% higher than local private
hospitals Government Hospitals : Paid slightly higher than Apollo
Employee benefits Induction manual : Dr. Reddys view of
relationship with employee
38. Information capability Factors Recording of complaints in a
computer database that revealed the patterns by Location Type of
Complaint
39. General Management CapabilityFactors Clear vision of Dr.
Reddy from the beginning Advanced medical care possible at high
quality and With a human face Apollo is organized around 5 stars
Medical Personnel Medical Technology
40. Employees Motivation Culture Compensation Hospitality Value
Total opportunity cost Quality assurance CHANGE
41. High standard and stress on hospitality towards patient
Emphasis on the fact that every employee contributed materially to
patients experience at Apollo Team oriented culture Apollos
operations geared towards providing outstanding value to
patients.
42. Capability factor Competitive Strength/WeaknessFinancial
capability Readiness of investors to invest, growth potential of
the company and the sectorMarketing capability High quality
service, Effective Promotion Program, High pricesOperational
capability Effective utilization of equipments, Lessened duration
of average stay per patientPersonnel capability Growth
opportunities for employees, Employee participation, Top caliber
medical personnelInformation Computerized database of
complaintsManagement with a efficient retrieval
systemCapabilityGeneral Management Clear vision, Team oriented
culture,Capability Open and constructive organisational
43. STRENGTHS, WEAKNESS, OPPORTUNITIES AND THREATS (SWOT
ANALYSIS)
44. Strengths Professional and personal contacts of Dr Reddy
Colleagues and technology- A central source of satisfaction at
Apollo Academic Support Consultants reputation Effective
application of latest medical technology Perceived by consultants
as a more attractive option compared to the Govt. hospitals
45. Weaknesses No models to emulate Questions about quality
control in non-medical areas Quantitative measures of Quality were
needed. Test results came slowly Cleanliness of cafeteria- A
question?
46. Opportunities To spread the Apollo brand name across India
To create joint ventures with international medical centres To
cater to the growing middle class market Venturing into diverse
business like Insurance and creating a hybrid of insurance and
medical care
47. Threats Competition for some skilled staff like nurses
Emigration