ASSINGNMENT :-2 Health care sector

Challenges & opportunity to Private Investors

1. Although private investments growing in various segments of healthcare sector, longer term, direct investment not as forthcoming as PE, IPO, and VC based investments. 2. Regulatory, infrastructural, human-resource, and other constraints are affecting direct investments. 3. Primary study conducted in 2007 (funded by WHO and Ministry of Health) on Foreign Investment in Hospitals: Status and Implications illustrates a range of challenges affecting organic investments in the Indian hospitals segment. Findings on foreign investment in Indian hospitals 1. Regulatory environment very liberal for foreign investment in hospitals 2. Since January 2000 up to 100 percent FDI allowed under automatic route in hospitals in India 3. Regulatory environment for other forms of foreign financing quite liberal 4. FIIs and private equity funding permitted under FDI, with certain conditions 5. FIIs and private equity funds can individually purchase up to 10% and collectively up to 24% of paid up share capital of company via open offers or private placement or through stock exchange 6. Proprietary funds, foreign individuals, foreign corporate can register as sub account and invest via 7. FII subject to 10% and 5% limits 8. Foreign venture capital investments also allowed Status of other forms of investment Non-debt based foreign financing present via: 1. 2. 3. 4. Private equity (funds) with stakes of 15-26% Development agencies Investment arms of foreign government Around 50% of financing via long term domestic borrowing

Challenges External constraints a. Healthcare undergoing reform and internal problems in overseas economies. b. Number of potential players who could invest is limited. c. Requirement of localized and in-depth knowledge of host country market. d. Difficulties in setting up individually as an overseas investor e. Difficulties in establishing and maintaining joint ventures f. Competing destinations g. Lower attractiveness of India as an investment destination due to perceptions of red-tape, lack of policy clarity, lack of transparency, and problems of efficiency Domestic constraints a. Initial and post establishment related operational issues adversely affect returns to investment in hospitals in India b. Features of investment make it unattractive for foreign investment c. High cost of setting up hospitals and capital intensity d. Land & Equipment e. Long gestation period of such investment f. Relatively low returns on such investment g. Low asset turnover (below 1 or 2 for major hospitals) h. Profits of 13% or less after several years i. Depreciation of assets j. High interest costs of debt financing k. Margins squeezed by very high operating costs

Retail
Challenges before the growth of retail management:
After discussing the factors responsible for the growth of retails sectors , there are also a lots of Challenges before them. Some of the challenges which are facing by these sectors are: 1. Corporate initiates: The retailers in India have to learn the overall management of retailing that are practised in other parts of world. they have to induce the new retail formats, enhance shopping experience as well as to understand the regional customers attitudes to retailing. 2. Trained manpower: The retailing sectors are still facing the problems of trained manpower. These sectors have shortage of trained manpower who can manage the retailing well and can understand the peculiarities of Indian customers which make it a very unpredictable a lot. 3. Local vendors: The biggest challenges for the growth of retail management is local vendors who are well expert in fulfilling the large section of lower class people demands. 4. Government regulations:- This sector is still facing the problem of FDI(foreign direct investment) which is very essential for growing of this sectors. The government has allowed only 51% FDI in direct retailing & 100% FDI in cash-andcarry which prevents it to become frilly flourished sectors. Besides these, there is different structure of sales tax in different states. 5. Lack of proper understanding by public: - There is lack of proper understanding by public & public groups about its positive effects. There are no actions taken by media or government or intelligential in order to popularise or spread the goods & pros of these sectors. 6. Lack of good and reputed Institutes: In India, there is shortage of good & reputed institutes in retail management which can provide the quality of knowledge and education at par with global standards.

Opportunities or Road ahead

The BMI India retail report for the first-quarter of 201 1 forecasts that total retail sales will grow from us$ 392.63 billion in 2011 to us$ 674.37 billion by 2014. Strong underlying economic growth, population expansion, the increasing wealth of individuals and the rapid construction of organized retail infrastructure are key factors behind the forecast growth in retail management. With the

expanding middle and upper class consumer base, there will also be opportunities in Indias tier ii and iii cities. Mass grocery retail (MGR) sales in India are expected to undergo enormous growth over the forecast period. BMI predicts that sales through MGR outlets will increase by 145 per cent to reach us S 21.35 billion by 2014. According to a Mekinsey & company report titled the great Indian bazaar: organized retail comes of age in India, organized retail in India is expected to increase from 5 per cent of the total market in 2008 to 14 - 18 per cent of the total retail market and reach us$ 450 billion by 2015. Furthermore, according to a report titled India organized retail market 2010, published by knight frank India in may 2010 during 20 10-12, around 55 million square feet (sq ft) of retail space will be ready in Mumbai, National capital region (NCR), Bengaluru, Kolkata, Chennai, Hyderabad and Pune. Besides, between 2010 and 2012, the organized retail real estate stock will grow from the existing 41 million sq ft to 95 million sq ft. Driven by the growth of organized retail coupled with changing consumer habits, food retail sector in India is set to be more than double to usS 150 billion by 2025, according to a report by KPMG. Indias retail market is expected to be worth about usS 410 billion, with 5 per cent of sales through organized retail, meaning that the opportunity in Tndia remains immense. Retail should continue to grow rapidlyup to usS 535 billion in 2013, with 10 per cent coming from organized retail, reflecting a fastgrowing middle class, demanding higher quality shopping environments and stronger brands, according to the report expanding opportunities for global retailers, released by A T Kearney. Foreign direct investment (FDI) inflows between April 2000 and October 2010, in single-brand retail trading, stood at us$ 197.04 million, according to the department of industrial policy and promotion (DIPP). Carrefour, the worlds second-largest retailer, has opened its first cash-and-carry store in India in New Delhi. Germany-based wholesale company metro cash & carry (MCC) opened its second wholesale centre at Uppal in Hyderabad, taking to its number to six in the country. Electronic retail chain major, next retail India, plans to open 400 showrooms across the country during January-march 2011 increasing the total number of retail stores to 1,000 by the end of the fiscal year 2010-11. Jewellery retail store chain Tanishq plans to open 15 new retail stores in various parts of the country in the 2011-12 fiscal. V mart retail ltd, a medium-sized hypermarket format retail chain, is set to open

40 outlets over the next three years, starting with 13 stores in 2011, in tier-u and tier-ui cities. Reliance retail, the wholly owned subsidiary of Mukesh Ambanis reliance industries, is set to open 150 stores by the end of march 2011 and double the number of stores across the country in all formats within five years. Future value retail, a fliture group venture, will take its hypermarket chain big bazaar to smaller cities of Andhra Pradesh, with an investment of around us$ 1.54 million to us S 4.41 million depending on the size and format. RPG-owned Spencers retail plans to set up 15-20 new stores in the country in 2011-12. Spar hypermarkets, the global food retailing chain of the Dubai-based landmark group, expects to start funding its India expansion beyond 2013 out of its local cash flow in the country. So far, the landmark group has invested usS 51.31 million in setting up five hypermarkets and plans to pump in another usS 51.31 million into the next phase of expansion. Leading watchmaker titan industries limited plans to invest about us S 21.83 million for opening 50 premium watch outlets Helios in next five years to attain a sales target of us S 87.31 million. British high street retailer, Marks and Spencer (M&S) plans to significantly increase its retail presence in India, targeting 50 stores in the next three years. Spains Tnditex, Europes largest clothing retailer opened the first store of its flagship zara brand in India in June 2010. It flirter plans to open a total of five zara outlets in India. Bharti retail, owner of easy day storesupermarkets and Hyper martsplans to invest about us$ 2.5 billion over the next five years to add about 10 million sq fi of retail space in the country by then, according to a company spokesperson. Uk-based tesco will open its first store in India this year in partnership with the tata groups retail arm trent ltd. Its the right format for a country like India because (the country) has a large number of mom- and-pop stores, hotels, restaurants and institutions, said Mediratta of Bharti Walmart. Its a great model and we are bullish on this. India has an estimated 12 million mom-and-pop stores, or neighbourhood retail shops that are a target for most of the wholesale stores, along with hotels, restaurants and other businesses.

Call center
The Challenge & opportunity of Moving Forward of call center
The question remains as to who will bear the cost of improvements required to strengthen all factors necessary to ensure the sustainability of the Philippines competitive advantage in the call center industry. Some call centers have shouldered the cost themselves, offering free in- house training for new hires. Still others have established joint efforts with existing universities and the Technical Education and Skills Development Authority (TESDA) to incorporate call centeroriented training requirements in their curricula and courses. Call centers have established personnel development initiatives, e.g., in-house training and evaluation, to enhance skill, and compensation and benefits initiatives, e.g., higher allowances, all-expense paid holidays and vacations, career development planning, etc., to curb attrition rates, ensure greater stability of the workforce size, and lessen the poaching of call center agents. More call centers are also contributing to the development of the countryside, more specifically the locations outside Metro Manila such as Laguna, Baguio, La Union, Cebu, Davao, Cagayan de Oro, Iloilo, etc. Geographical diversification, i.e., expanding call center operations to provinces, w i l l p r o v i d e more labour supply, and breathing room to answer to the intense scrambling for office space in Metro Manila. Call center operations will also encourage infrastructure development in other metro cities, with the possibility of replicating the development in the cities of Metro Manila in infrastructure and skill to the countryside areas. Another opportunity available to the sector is value diversification. Indias move towards strengthening non-voice services was not lost on Philippine ears. In its forecast towards 2010, the Department of Trade and Industry (DTI) expressed its target to increase the share of other BPO services in the total BPO revenue pie while decreasing dependence on call centers, which might now be showing signs of decline. The semiconductor industry in its peak of growth during the mid-1980s also prompted recommendations toward diversification towards higher-value processes. At the time, the sector primarily consisted of lowlevel technology- supported processes, mainly automated simple assembly of semiconductor devices and product testing. Even now, industry activity in highlevel.