Description
The PPT covering the analysis on Apollo hospitals.
CASE STUDY: APOLLO HOSPITALS OF INDIA
PRESENTED BY: SEBY AUGUSTINE(31) SAURABH NINAMA(23) VINOD VASAVA(37) POOJA TANNA(35)
INDUSTRY ANALYSIS
About the Industry
? Health
status varied ? Lag in availability of medical personnel & facilities Country Per 1,000,000 population
Doctor
India U.K 407 1615
Nurse
214 7891
Hospital beds
1600 8000
U.S.
2380
3204
5900
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
?
Porter’s 5-force model
Threat of Substitutes
Bargaining power of Suppliers
Forces of competition
Bargaining Power of Buyers
Threat of New Entrants
Threat of Substitutes- limited
? ?
No substitute for medical care A basic requirement
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
Competition - Intense
? ? ?
Large number of players in the industry Govt. Hospitals – A strong competition High exit barriers (due to high capital investment)
Bargaining power of suppliersHigh
?
Referral doctors served as a major source of customer base.
Bargaining power of BuyersLimited
?
No substitute
About the Company
? ?
Founded in 1983 by Dr. Pratap C. Reddy First Corporate hospital in India ? Comprehensive ? For profit Grew out of Dr. Reddy’s own practice
?
?
Obstacles
? ?
Regulatory Financial
?
Combination of professional management structure and entrepreneurial approach
?
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
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.
Probability of Impact High High Critical
Impact on business Medium High Low Low
Medium
Low
High
To be watched
High
Low
Low
Low
CSFs for Apollo Hospitals
Probability of Impact High High Medium Low Market, Quality, Regulatory Technological Impact on business Medium International Socio-cultural, Economic Low Political
ENVIRONMENTAL THREATS AND OPPORTUNITY PROFILE (ETOP)
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
?
Technological Environment
?
Expensive but no large scale sudden changes
Economic Environment
?
Economic Development pursued by Indian Government after independence
? Central
planning ? Import substituting industrialization
?
Liberal economic reforms in 1980
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
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.
Socio-cultural Environment
? ?
World’s largest democracy Variety of
? Economic
levels ? Social status ? Cultural Group
?
Co-existence of poor and middle class
International Environment
?
?
High quality medical care available internationally as compared to India Brain Drain - A big issue
Environmental Sector Market Technological Economical Regulatory Political Socio-cultural International
Nature of Impact
Impact of Each Factor Enormous , unmet demand for high quality health care among Indians Expensive but no large scale sudden changes
Economic Development, Liberal economic Reforms
New Industrial Policy, Rao reforms, Dismantling of licensing requirements Politics had no great role in the industry World’s largest democracy, Co-existence of poor and middle class High quality medical care available
STRATEGIC ADVANTAGE PROFILE (SAP)
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
Apollo Hospitals Madras Year 1985 1986 1987 1988 1989 1991 1992 1993 1994
Sharehold 39,13 45,91 ers’ 5 0 Equity
48,732
52,181
54,098
54,178
54,178
54,178
106,319
Apollo Hospitals Hyderabad Year Shareholders’ Equity 1990 78,476 1991 83,082 1992 83,310 1993 83,650 1994 153,731
Marketing Capability Factors
?
Marketing capability factors could be segregated into four basics categories:
? Product ? Promotion ? Price
?
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
?
?
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
?
Promotion
? Aimed
marketing effort at women ? Marketing programs
? Referrals
? Hospital
capabilities
? Awareness
? Public ? Local
programs
schools
?
Promotion
? Apollo
Heartbeat : A quarterly news paper ? Low priced check- up packages
? Advertising
of Special priced diagnostics
packages
?
Price
? Higher
prices in comparison to the competitors.
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
? ?
?
High success rate A well maintained library provided access to key medical journals & reference books from around the world Online bibliography search system
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 “Apollo’s large ambitions” in each employee Strong sense of Community
?
Wages
Apollo hospital : 10-20% higher than local private hospitals ? Government Hospitals : Paid slightly higher than Apollo
?
? ?
Employee benefits Induction manual : Dr. Reddy’s view of relationship with employee
Information capability Factors
?
Recording of complaints in a computer database that revealed the patterns by
? Location ? Type
of Complaint
General Management Capability Factors
? ?
?
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
?
Employees
?
?
?
Motivation Culture Compensation
Hospitality ? Value
?
? ? ?
Total opportunity cost Quality assurance CHANGE
?
?
? ?
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 Apollo’s operations geared towards providing outstanding value to patients.
Capability factor
Competitive Strength/Weakness
Financial capability
Marketing capability Operational capability
Readiness of investors to invest, growth potential of the company and the sector
High quality service, Effective Promotion Program, High prices Effective utilization of equipments, Lessened duration of average stay per patient
Personnel capability
Growth opportunities for employees, Employee participation, Top caliber medical personnel
Computerized database of complaints with a efficient retrieval system Clear vision, Team oriented culture, Open and constructive organisational
Information Management Capability General Management Capability
STRENGTHS, WEAKNESS, OPPORTUNITIES AND THREATS (SWOT ANALYSIS)
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
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?
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
Threats
? ?
Competition for some skilled staff like nurses Emigration
doc_769544553.pptx
The PPT covering the analysis on Apollo hospitals.
CASE STUDY: APOLLO HOSPITALS OF INDIA
PRESENTED BY: SEBY AUGUSTINE(31) SAURABH NINAMA(23) VINOD VASAVA(37) POOJA TANNA(35)
INDUSTRY ANALYSIS
About the Industry
? Health
status varied ? Lag in availability of medical personnel & facilities Country Per 1,000,000 population
Doctor
India U.K 407 1615
Nurse
214 7891
Hospital beds
1600 8000
U.S.
2380
3204
5900
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
?
Porter’s 5-force model
Threat of Substitutes
Bargaining power of Suppliers
Forces of competition
Bargaining Power of Buyers
Threat of New Entrants
Threat of Substitutes- limited
? ?
No substitute for medical care A basic requirement
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
Competition - Intense
? ? ?
Large number of players in the industry Govt. Hospitals – A strong competition High exit barriers (due to high capital investment)
Bargaining power of suppliersHigh
?
Referral doctors served as a major source of customer base.
Bargaining power of BuyersLimited
?
No substitute
About the Company
? ?
Founded in 1983 by Dr. Pratap C. Reddy First Corporate hospital in India ? Comprehensive ? For profit Grew out of Dr. Reddy’s own practice
?
?
Obstacles
? ?
Regulatory Financial
?
Combination of professional management structure and entrepreneurial approach
?
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
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.
Probability of Impact High High Critical
Impact on business Medium High Low Low
Medium
Low
High
To be watched
High
Low
Low
Low
CSFs for Apollo Hospitals
Probability of Impact High High Medium Low Market, Quality, Regulatory Technological Impact on business Medium International Socio-cultural, Economic Low Political
ENVIRONMENTAL THREATS AND OPPORTUNITY PROFILE (ETOP)
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
?
Technological Environment
?
Expensive but no large scale sudden changes
Economic Environment
?
Economic Development pursued by Indian Government after independence
? Central
planning ? Import substituting industrialization
?
Liberal economic reforms in 1980
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
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.
Socio-cultural Environment
? ?
World’s largest democracy Variety of
? Economic
levels ? Social status ? Cultural Group
?
Co-existence of poor and middle class
International Environment
?
?
High quality medical care available internationally as compared to India Brain Drain - A big issue
Environmental Sector Market Technological Economical Regulatory Political Socio-cultural International
Nature of Impact
Impact of Each Factor Enormous , unmet demand for high quality health care among Indians Expensive but no large scale sudden changes
Economic Development, Liberal economic Reforms
New Industrial Policy, Rao reforms, Dismantling of licensing requirements Politics had no great role in the industry World’s largest democracy, Co-existence of poor and middle class High quality medical care available
STRATEGIC ADVANTAGE PROFILE (SAP)
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
Apollo Hospitals Madras Year 1985 1986 1987 1988 1989 1991 1992 1993 1994
Sharehold 39,13 45,91 ers’ 5 0 Equity
48,732
52,181
54,098
54,178
54,178
54,178
106,319
Apollo Hospitals Hyderabad Year Shareholders’ Equity 1990 78,476 1991 83,082 1992 83,310 1993 83,650 1994 153,731
Marketing Capability Factors
?
Marketing capability factors could be segregated into four basics categories:
? Product ? Promotion ? Price
?
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
?
?
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
?
Promotion
? Aimed
marketing effort at women ? Marketing programs
? Referrals
? Hospital
capabilities
? Awareness
? Public ? Local
programs
schools
?
Promotion
? Apollo
Heartbeat : A quarterly news paper ? Low priced check- up packages
? Advertising
of Special priced diagnostics
packages
?
Price
? Higher
prices in comparison to the competitors.
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
? ?
?
High success rate A well maintained library provided access to key medical journals & reference books from around the world Online bibliography search system
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 “Apollo’s large ambitions” in each employee Strong sense of Community
?
Wages
Apollo hospital : 10-20% higher than local private hospitals ? Government Hospitals : Paid slightly higher than Apollo
?
? ?
Employee benefits Induction manual : Dr. Reddy’s view of relationship with employee
Information capability Factors
?
Recording of complaints in a computer database that revealed the patterns by
? Location ? Type
of Complaint
General Management Capability Factors
? ?
?
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
?
Employees
?
?
?
Motivation Culture Compensation
Hospitality ? Value
?
? ? ?
Total opportunity cost Quality assurance CHANGE
?
?
? ?
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 Apollo’s operations geared towards providing outstanding value to patients.
Capability factor
Competitive Strength/Weakness
Financial capability
Marketing capability Operational capability
Readiness of investors to invest, growth potential of the company and the sector
High quality service, Effective Promotion Program, High prices Effective utilization of equipments, Lessened duration of average stay per patient
Personnel capability
Growth opportunities for employees, Employee participation, Top caliber medical personnel
Computerized database of complaints with a efficient retrieval system Clear vision, Team oriented culture, Open and constructive organisational
Information Management Capability General Management Capability
STRENGTHS, WEAKNESS, OPPORTUNITIES AND THREATS (SWOT ANALYSIS)
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
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?
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
Threats
? ?
Competition for some skilled staff like nurses Emigration
doc_769544553.pptx