FACULTY OF BUSINESS AND MANAGEMENT

BBPS4103
STRATEGIC MANAGEMENT

Name: LIOW SOON SENG

Matric Number:

NRIC :

H/P: 013-7458858

E-mail:liow@oum.edu.my

Tutor’s Name: Madam Yeoh Siok Tee

Learning Centre: PPT Batu Pahat

SEPTEMBER 2009 SEMESTER

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 Table of Content

1.0 Introduction Page 3 -- 5

2.0 Corporate Core Values Page 6

3.0 SWOT Analysis Page 7 - 10

4.0 Impact of External Threat Page 11

5.0 Recommended Strategy Implementation Page 12 – 13

based on its Strength and Opportunities

6.0 Recommended Solutions to Weakness and Threats Page 14 - 15

7.0 Conclusion Page 15

8.0 References Page 16

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1.0 Introduction

This case analysis examines the external analysis of the environment, the

internal analysis of the organization and industry analysis of a private hospital in

Malaysia. Its analyses SUNWAY MEDICAL CENTREL ( “SunMed” ) by showing the

analysis of its immediate opportunities and threats, strength and weakness, and

further providing the alternative strategies in order to position itself vis-à-vis the other

competitors, capitalize on the sector’s growth potential and strengthen market

position in the industry.

The Healthcare Industry

The private healthcare in Malaysia has been growth at the tremendous rate

for the past decade. According to Malaysia Health minister, Dato Liow Tiong Lai on

his recent speech at ASIA HEALTH 2009 CONFERENCE in August 2009, there was

an increase the number of private hospital beds from 1,171 in 1980 to 11,689 in the

year of 2008, in term of numbers of private hospital in the same period, with less than

50 hospital to current 240 hospital and keep increasing. Currently there are about

25% of the total hospitals beds are in the private sector which share 43% of total

healthcare expenditures. The private healthcare industry is dominate by Kumpulan

Perubatan Johor (KPJ) and Pantai group, which control some 19% and 16%

respectively of the market, the remaining market shares distribute among others 238

private hospitals, as most others private healthcare groups with associate hospital at

various location in Malaysia, Sunway Medical Central have only one single medical

hospital centralised in Petaling Jaya with market share of less than 1%.

The Company Background

The Sunway Group is one of Malaysia’s most widely recognized and

diversified conglomerates of established businesses covering civil engineering and

construction, property development, leisure, entertainment, healthcare and

education. The group encompasses two Main Board listed companies, Sunway

Holding Berhad and Sunway City Berhad. Sunway Holding Berhad core business is

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in construction, building, manufacturing and quarry while Sunway City Berhad is

involved in property business investment and also in hospitality, healthcare and

education industries.

Sunway Medical Centre (SunMed) is one of the private hospital offering

specialized and tertiary medical care services in Malaysia, this medical specialist

centre is under one of the business sector of Sunway City Berhad. It located at

strategic and well-developed township in Bandar Sunway, Petaling Jaya, Selangor.

Under its latest major expansion and renovations plans for the hospital building, the

hospital areas are expanded from 22,219M² to 60,803M². The medical centre

equipped with advanced medical technology with professional clinical expertise and

experience nursing staff for various healthcare needs.

The Vision

The vision of Sunway Medical Centre is:-

 To be a world class, health care organization of choice

This vision statement defines this health care organization’s focus on the

clear direction to steer the organization into future to be a world class healthcare

organization of choice, to meet this vision, its must have excellent services in term of

quality and its competitiveness, this vision provides the direction which is vital for

identifying successful strategies for the organization.

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 The Mission

The mission of Sunway Medical Centre is:

We committed to provide:-
 To provide professional, innovative quality services that exceeds customer
expectation.
 To provide value added services.
 To provide modern, comprehensive and safe facilities and environment.
 To provide continuous development of human capital.
 To provide satisfactory return to shareholders.

This mission statement showing Sunway Medical Centre commitment in

translating their vision of the organization into the reality by prioritized their

professionalism in quality services that exceeds customer expectation, quality

services here means provides the best medical treatments that is exceed the

standard expectation and values by customers. Through their modern,

comprehensive facilities and competent human resources, provides the customers

with safe and comfortable environment. At the same time, it also has duty to fulfill the

expectation of its shareholder on satisfactory return.

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2.0 Corporate Core Values

The corporate Values of Sunway Medical Centre are:-

 Customer Service Excellence – To meet and exceed customer’s

expectation by providing professional and comfortable healthcare

services start from admission to recovery process.

 Effective teamwork – Working together to achieve common goal,

objectives or business results inline with the corporate mission by our

delicate and experienced staffs of all processes, regardless of what

levels they belongs.

 Quality consciousness – Doing the right things right, every time.

Based on this quality policy, we always look for further improvement on

all the processes in order to provide best healthcare practices.

 Motivating Leadership – Effectively lead, inspire and mentor staff to

achieve organization goals and objectives. All leaders will create a good

surrounding or environment and emphasis good moral values in leading

his teams meeting the organisation’s goals.

 Result Driven – Ensure short term and long term goals are met in a

timely manner. Always aims for further achievement in order to stayed

competitive in the healthcare service industry.

The corporate values of Sunway Medical centre reflects the value and

priorities of their strategic decision through their customers by providing excellence

and quality professional services that exceed customer’s expectation; to achieve this,

its must have an effective management team which have common goals and quality

consciousness. A motivating leadership is able to lead them to success; and finally a

result driven evaluation for their performance. Fulfill and exceed customers

expectation is the priority

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3.0 SWOT Analysis

The following SWOT analysis will focus on identifying and evaluating external

environment of internal organizational factors that have direct or indirectly impact on

the organization performance. Sunway Medical Centre need to analysis the

opportunities and threats which emerged from external environment, as well as

internal organisation’s strength and weakness in order to formulate a strategic plan

according to these changes.

Opportunities

Current global economic downturn have made people in developed country

like USA, Canada and UK to cross boarder to seek affordable and low cost

healthcare in developing country like in Malaysia, Thailand and India, as a result,

Medical Tourism is fast booming and get attention in Developing country. According

to the report from Association of Private Hospital Malaysia, the revenue from health

tourism was increase and growing at 30% a year from year 2000 to 2007, and

forecast to continue until year 2010, it is expected total of RM584 million in medical

revenue will be generated.

In the social perspective, Malaysia’s population is expected to grows from

current about 26 million to 32 million by 2020, the healthcare sector is expected

continue to grow. On top of this, a large portion of older age of 65 years and above

population will increase the demand for healthcare services. The country’s healthcare

expenditure is expected to grow from the current 3% of GDP to 6% of GDP by 2020.

Together with rising household income and improved life quality, private hospitals like

Sunway Medical Centre may benefit by capture this business segment opportunities.

Changing in lifestyle are boosting the spending on healthcare, this is due to

unhealthy urbanized fast food which causes obesity problem, as well as increasing

number of smokers, all these leading to lifestyle related diseases like respiratory

diseases and cancer, diabetes, high blood pressure and heart-related diseases,

while treatment for all these will increase healthcare spending and demanding,

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Sunway Medical Centre may benefits from this trends, at the same time, private

hospitals may have more people looking for preventive healthcare services due to

awareness in health prevention.

The advancement of technology had gives various opportunities for the

growth in healthcare industry. The high technology facilities enable more critical

sickness and dieses can be cure, as well as more advance diagnosis and prevention

measures which diversify healthcare industry into more important business

segments. The fast advancement of information communication technology enable

private hospitals advertised effectively, through the web portal, patients can accesses

the essential. The intensive development of pharmaceutical and medical related

activities are creating new products and services, Sunway Medical Centre may not

directly involved but will benefits indirectly for their business sector.

Threats

The global economic downturn had resulting decline in purchasing power, this

indirectly affecting patients seeking medical treatment when this groups of patients

try to seeks medical assistance from public hospitals, the private healthcare sector

like Sunway Medical Centre may see a lower than expected patients visits and

admission, at the same time, increasing number of new setting up private hospitals

will further threaten the patients source for Sunway Medical Centre, all of these

factors will further lead to lower utilization of expensive medical equipment facilities,

as well as high wages human resources for this sector, all of these will added up and

increase the hospital’s operation cost causes the hospital can’t offers their services

with a competitive price, this will be major threat to Sunway Medical Centre.

Another threat for Sunway Medical Centre is the brain drain where lack of

qualified doctors and specialists, this situation worsen when many new private

hospitals from oversea are setting up their branches in Malaysia, for example The

Columbia Asia Medical group are setting up another 4 medical centres in the country,

this will casing the shortage of human resources in medical sector especially the

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experienced doctors, this may become key threat for Sunway Medical Centre of any

expansion plan, as well as existing human resource for its hospital.

From political perspective, under the Private Hospital Act 1971, government is

monitoring and regulates private hospitals operation, this act set certain requirement,

for example, all recruitment of nurses must least 60% from local, and this may lead to

difficulty for private hospital in human resources recruitment. Government

intervention in healthcare industry is more on social goals. However, excessive

regulation may become threats for continual growth in the healthcare industry which

will become another threat for Sunway Medical Centre.

Strength

Being one of the subsidiary companies in SUNWAY GROUP, Malaysia’s

most widely recognized and diversified conglomerates with a multitude of established

businesses, Sunway Medical Centre have strength derived from its parental

company’s perceptive and transparent policies and visionary leadership, as well as

financial stability for future development. SUNWAY is well known recognized brand

name in property, construction and leisure sectors, Sunway Medical Centre is directly

benefited from this by delivering same level of quality services as its sister

companies did, this become one of the strength in marketing their products and

services.

The successes of SUNWAY GROUP came from their visionary leadership

management and perceptive corporate policies. Sunway Medical Centre is definitely

inherited the good management approaches and corporate polices into their

organization management, this will be their major strength in management.

Sunway Medical Centre is using Total Quality Management ( TQM ) approach

in their operational activities, many accredited awards received acknowledge their

continuous improvement in operational excellence and patient safety, example ISO

9001:2008, MS ISO15189 and Malaysian Society for Quality in Health ( MSQH)

accredited private hospital certification in process and medical testing standard in

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patient safety, Asia Hospital Management award, .and many others, this TQM

approach is one of their strength in their total services and operational functions.

Beside marketing through conventional advertising media and internet,

Sunway Medical Centre also have advantage of it wide marketing chains network

from its sister companies in other sector, example in healthcare tourism segment,

both Sunway Group’s leisure and entertainment sector may inter-related and

complimenting each others.

In the research and development, Sunway Medical Centre is an institution

affiliated to Tan Sri Jeffrey Cheah School of Medicine, Monash University Malaysia,

only a few of Malaysia private hospitals have affiliated to medical institution, example

University Malaya Specialist Centre S/B and Kumpulan Perubatan Johor ( KPJ ).

This is one of the strength not only in medical research and development, but also

provided the medical human resources needs where most of private hospitals are

facing the human resources shortages.

Weakness

Being a single location hospital in Petaling Jaya, Sunway Medical Centre

having a weakness in getting the potential patients nearby, as compare to others

hospitals like Kumpulan Perubatan Johor and Pantai group which have many

hospitals covering most strategic cities in Malaysia, this weakness become more

critical in term of patients sources when other private specialist hospitals nearby try

to capture same area patients source, the competition will become fierce. In term of f

medical services ranges that offers in private healthcare, compare to these industry

key players like Pantai’s Group which offers wide range of medical services through

its group’s hospitals, Sunway Medical Centre have weakness in offering

comprehensive range of medical services due to its single location medical centre.

In Malaysia, ratio of doctors and patients still very low compare to developed

country, public and private hospitals are facing the doctor shortage, Sunway Medical

Centre too facing shortage of medical personals and brain drain problem especially

the highly experience medical specialists.

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4.0 Impact of External Threat

One of major threat of Sunway Medical Centre is the competitive demand and

shortage of medical human resources in healthcare industry, this brain drain problem

where lack of qualified doctors, specialists and experienced nurses keep continuing

with opening of new private hospitals, many Malaysia doctors and specialists are

choose to adopted for oversea that have better remuneration packages and quality of

life, similarly for many highly qualified nurses also choose to higher remuneration

offers country like in the Middle East.

This threat is giving great impact for Sunway Medical Centre competitiveness in

the industry. Shortage of experienced medical doctors and nurses will seen as

hindrance against any expansion plan for Sunway Medical Centre, as well as existing

services offering. Some of special medical treatments may unable to perform or

delayed due to lacks of specialist doctors, the patients will gradually turn away to

others medical specialist hospital for treatment, this will definitely affecting hospital’s

business revenue and performance.

Competition among private hospitals will be challenging which will become

more demanding and complex in achieving its organization performance, as such,

Sunway Medical Centre must have strategic plan management with more creative

and innovative in order to remain competitive and sustain their competitive over

others in this industry.

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5.0 Recommended Strategy Implementation

Based on its Strength and Opportunities

After the opportunities, threats, strength and weakness of Sunway Medical

centre had been identified from SWOP analysis, few recommendations of strategies

can be implemented in future that can ensure organization success and superior

performance.

As mentioned earlier in SWOT analysis, the booming growth of healthcare

tourism in developing countries particularly in Malaysia provided good opportunities

for private healthcare hospitals especially to Sunway Medical Centre, this market

segment have high market growth rate where government forecast there will be 30%

increase annually of people entering country for medical purposes, and by year 2010,

the segment is expected to bring in some MYR 2.0 billion in revenue. With such big

market, Sunway Medical Centre must capture more market share by combining the

strength of its sister company in hospitality and leisure sector by linking up the hotel

accommodation together with health screening and medical check-up..

Oversea patients may not come alone for medical purposes, they will have

companied by their relatives or next of kin, a package combining healthcare,

hospitality, travel and leisure will be seen attractive for them. Furthermore, Sunway

Medical Centre have cost advantage compare to competitor in neboring country like

Singapore which have higher medical cost, as well as Thailand where political

instability make them less competitive.

Changing life style and unhealthy eating habits have caused rapid growth of

many critical diseases which some cases may required advanced and expensive

medical equipment facilities, some of this special equipment facilities still not

available in Malaysia, even local patients need to seek this special medical treatment

in Singapore or Australia, Sunway Medical Centre should grasps the opportunities of

this increasing patients source by upgrading its medical facilities into more advance

and high technology nature so that can compete with its rivalry. Based on its strong

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financial track records shown by Sunway’s Group, financially should be its strength

compare to others specialist hospitals in investing in high technology medical

facilities.

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6.0 Recommended Solutions to Weakness and Threats

As previously mentioned in analysis, being a single hospital in one location, its

have disadvantage of limited number of patients or customers source. If Sunway

Medical Centre focuses on this special medical services and treatment which other

hospitals can’t offer, definitely it will offset this weakness. While others private

hospitals all are offering almost same medical treatment, Sunway Medical Centre

should aims for niche market which the key idea is specialization, invest in special

medical equipments for special critical diseases treatment where other hospitals can’t

offer. In the Blue Ocean business strategy concern, Sunway Medical Centre need to

develop uncontested market space and make competition irrelevant, instead swim to

“ red ocean “ of offering services that have high competition, this niche services

should introduce where other competitors have not yet step in.

The brain drain where shortage of qualified nurses, doctors and specialists

become key threat for Sunway Medical Centre, the situation keep worsen when

number of newly set-up hospitals keep increasing. To overcome this brain drain

problem, Sunway Medical Centre may consider the strategies to allow doctors or

specialists to have their private wing or clinics in the hospital, this will allow doctors or

specialists to earn extra income while serving to the hospital. Some private hospitals

are implemented this strategy, as well as public hospital where brain drain happened

most critical here. In addition to this, Sunway medical centre should consider profits

sharing for employees by giving company’s share or rewards based on department

performance, so that all employees will have feeling of sense of belonging.

In the operational perspective, Sunway Medical Centre must improve its

operational efficiency by maximize the use of Information Communication

Technology (ICT) into their process. For example by ultilised the internet online

facilities, the patient will access the information of required specialist doctor, pre-

registered and make appointment online prior to admission. This will not only shorten

the waiting time for patients, it also simplified the hospital’s admission process and

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manpower required, this indirectly offset the problem of manpower shortage. Sunway

Medical Centre must apply ICT approaches comprehensively into their organization

like in finance, operational process and human resource.

7.0 Conclusion

Growth in private healthcare sector is expected to continue as demand for

medical healthcare is increase, mainly due to an aging population and changing

lifestyle. On the other hand, healthcare tourism is fast developing sector in healthcare

industry which have large market potential in earning revenue, Sunway Medical

Centre, combining its group’s strength in travel, leisure and hospital sectors, should

focus its strategy on capturing market share of this healthcare tourism, which is

expected to be a main growth driver for this industry.

Considering its strength and weakness compare with key players or

competitors in the industry, Sunway Medical Centre should opted for the Blue Ocean

business strategy by aims for niche market which the key idea is specialization,

invest in special medical equipments for special critical diseases treatment where

other hospitals can’t offer locally.

Sunway Medical Centre must continue deliver high quality of healthcare

services responds to external and internal challenges maximize the use of ICT in

their operations and re-engineering organization management is necessary to

enhance and improve their competitiveness advantages and generate greater

revenue.

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8.0 References

 http://www.sunway.com.my/

 http://www.sunway.com.my/sunmed/main.asp

 http://www.sunway.com.my/sunmed/vision.htm. Retrieved on 10.10.2009.

 http://www.hospitals-malaysia.org/index.cfm?menuid=4. Retrieved on 5.10.2009.

 Gan, K.K (2007) PINK OF HEALTH: A research of the local healthcare industry

AmResearch Sdn Bhd. http://kpj.listedcompany.com/misc/analyst/am170107.pdf

Retrieved on 5.10.2009.

 BBPS4103 Strategic Management, (version May 2009) Open University Malaysia

Module, UNITEM Sdn Bhd.

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