Mantrita Round 2 Team: FaMouS

Team Members:
Ashutosh Kaushik Ridhi Bhatnagar
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AGENDA
Start-up Healthcare Industry - Overview
Alternative Medicine Industry - Overview Why Alternative Medicine ? Growth Drivers & Service Differentiation Market Entry Strategy
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Phase 1: Market Assessment Phase 2: Business Case Development Phase 3: Implementation Roadmap Phase 4: Go LIVE !! Phase 5: Sustain Competition

START UP.

SECTOR

Healthcare

SUB-SECTOR Alternative Medicine

OBJECTIVE

Strategize for a start-up to enter the alternative medicine industry

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VALUE PROPOSITION

One-stop solution for various ailments & health consultancy through natural methods

Healthcare Sector - Overview

Market
Size - US$ 40 billion

Expenditure
5.5 % of GDP in 2009

Growthdrivers
Demand-supply gap Preference for private treatment Incentives by government Strong economic growth Higher public spending Private investments in healthcare Increased penetration of health insurance Emergence of new models of healthcare delivery

Keyplayers
Apollo Hospitals Enterprise Ltd

Size will grow to US$ 78.6 billion by 2012

FDI between 2000 and 2010 : Drugs and pharmaceuticals sector - US$ 1.82 billion Hospitals and diagnostic centres - US$ 955.10 million

Expected to increase by 14% p.a.

Expected to constitute 6.1% of the countrys GDP Public sector likely to contribute 15-20 % of required investment

Fortis Healthcare Ltd

Max Hospitals CARE Hospitals, Manipal Group of Hospitals Aravind Eye Hospitals

Source: www.ibef.com

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Overview of Alternative Medicine Industry

Definition
Broad range of healing philosophies, approaches and therapies that exist largely outside the institutions where conventional health care is taught and provided.

Size

ISM (Indian Systems of Medicine) pharmaceutical industry in India is estimated to be worth Rs 4,200 crore

Practices

Ayurveda, Siddha, Unani, Homeopathy, Naturopathy, Tibetan, Reiki, Chiropractice

Market

Ayurveda accounts for more than 80% of market share. Nearly 10,000 licensed private manufacturers of ISM drugs in India (more than 500 in Ayurveda, 300 in Unani and 200 in Siddha)

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Why Alternative Medicine ?

India considered as a strong base of alternative healing therapies Advantages Cost-effective High Efficacy low toxicity Ease of administration Relative safety (few adverse effects) renders them invaluable as viable alternatives to conventional medicine.

Growing Health & Wellness Awareness among youth & working class Large scale Side Effects of Allopathic medicines and a reinstated belief in ancient & natural methods of medication

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Medical Tourism Alternate medicine (Ayurveda and Yoga) - most popular. Breakup of tourists spending on medical tourism Rs 40,000- Rs120,000 on an average amount spent on alternative treatment - Rs10,000-Rs35,000

Growth Drivers & Service Differentiation

Growth Drivers Rising Income Insurance Coverage Increasing Awareness Quality consciousness Preventive Focus on health

Healthcare Industry
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Start-up will provide: New healthcare Service Delivery Mechanism Quality Assurance Enhanced Accountability Proving better alternatives

Market Entry Strategy

PHASE 1
Market assessment

PHASE 5
Sustain Competiton

PHASE 2
Business Case Development
.

PHASE 4 PHASE 3
Implementation Roadmap Go Live
.

1. Market Assessment (1/4)

Regulatory Scenario

Competitive Scenario

Customer Scenario

Regulatory Assessment (2/4)

Quality Council of India (QCI) s National Accreditation Board for Hospital and Healthcare Providers (NABH) accreditation for the wellness center required Once accredited, accreditation valid for 3 years. NABH conducts a regular surveillance of the accredited organization. The surveillance visit will be planned during the 2nd year. The wellness & healthcare sector has been unregulated and subject to quackery.
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Sector is looking at building up credibility for their services through a self-regulatory process of accreditation. The Federation of Indian Chambers of Commerce and Industry (FICCI) has worked jointly with NABH on the standards.

Competitive Landscape (3/4)

Indirect Competitors: Dabur India Ltd., Sri Baidyanath Ayurvedic Bhawan Ltd., Zandu Pharmaceutical Works, The Himalaya Drug Company, Vicco Laboratories, The Emami Group Some Well known Ayurvedic Centers: Arya Vaidya Sala, Kottakkal, Kerala Ayurvedic Natural Health Center, Goa, India National Institute Of Ayurveda, Jaipur Institute of Post Graduate Teaching and Research in Ayurveda, Jamnagar, Gujarat M A Podar Hospital Worli Mumbai Poovar Island Resort Kerala Somathiram Spa, Trivendrum, Kerala Ayurveda Gram Bangalore, Karnataka CVN Kalari Centre for Ayurveda Ananda Ayurveda Spa,Hrishikesh, Uttarakhand Atma Santulan Kendra, Lonavala, Pune
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Customer Assessment (4/4)

Target Customers Health conscious consumers seeking well being People looking for solutions to lose weight, to slow the effects of aging, to relieve pain or discomfort, to manage stress People looking for ways to partake in the use of natural supplements to improve their health Medical Tourists

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2. Business Case Development (1/5)

Market Attractiveness

Enviromental Analysis

Economic Analysis

Business Case Development (2/5)

Market Attractiveness

EASE OF ENTRY SUPPLIER POWER (medium) BUYER POWER (high)

(Low)

LEVEL OF COMPETITION (Low)

StartUp

AVAILABILITY OF SUBSTITUTES (High)

Business Case Development (3/5)

Environment Analysis
Ministry of Health and Family Welfare to promote Indian Systems of Medicine Proposal to spend Rs. 922 crores in this regard Incentivising Alternative Medicine Medical Tourism - $2 bn industry by 2012 $ 1bn size of Indian Ayurveda Market Healthy growth rate of 20% per annum High demand among foreign countries

Political

Economic

Technologic al

India possesses necessary technological expertise in this regard Central Council For Research In Ayurveda & Siddha (CCRAS) R&D Telemedicine

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Social

Traditional Indian therapies a positive outlook Free from side effects of allopathic medicines Deeply rooted in the family culture owing to deep historical roots

Business Case Development (4/5)

Business Model
Value proposition Defining Target Group

One-stop destination for natural solutions to all health related issues Our Wellness Center will include a spa along with consultation in the following alternative medicines:
Ayurveda (diagnosis + medicines) Yoga Acupuncture/acupressure Naturopathy Chiropractice

Health conscious consumers

seeking well being People looking for solutions to lose weight, to slow the effects of aging, to relieve pain or discomfort, to manage stress
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Tele-consultation to far-off and foreign clients Dietary consultation

People looking for ways to partake in the use of natural supplements to improve their health.

Business Case Development (5/5)

Economic Analysis
COST: (per annum basis) REVENUE: sales ratio(per month) FIXED COSTS :Rent for building = Assume 50K per month = Signing Contract amount Ayurved specialist = Signing Contract amount Yoga specialist = Signing Contract amount Thereuptist = Signing Contract amount dietician = Signing Contract amount Spa specialist = Promotions cost on Radio = @ 3000 per 20 sec slot; 5 slots per day, per channel ( for 1 month teaser campaign and on 1 channels) Fixed Operating Expenses = including electricity and others Furniture and equipment Total Fixed Costs VARIABLE COSTS :variable component to Ayurved Specialist per consultation (20% of revenue) variable component to Yoga Specialist per consultation (20% of revenue) variable component to Thereuptist per consultation (20% of revenue) variable component to dietician per consultation (20% of revenue) variable component to Spa Specialist per consultation (20% of revenue) telemedicine call charges (@ avg Re1 per minute; 15 min per consultation) Total Variable Costs 600000 240000 120000 120000 120000 120000 450000 100000 200000 2070000 Rent from the shop Ayurved consultation Therapeutic treatmnt Dietary consultation Yoga Spa tele consultancy 120000 per year 500 500 150 500 1000 1000 5 3 3 4 3 3 total monthly sales annual sales Projected 50 30 30 40 30 30 210 2520

100 100 100 30 200 15 545

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1st year calculation: Let x be the multiplication factor, so total sales = 21x contribution margin = (400*50)+(400*30)+(120*30)+(400*40)+(800*30)+(985*30) = 105150 per m contribution margin for 1st year = (105150*12)+120000 = 1381800 total fixed costs = 3420000 Net loss in 1st year = 1381800-2070000= - 688200 In the second year, only fixed cost = rent + operating = 70000 assuming sales growth of 15% per annum , new sales = 2900 approx contribution margin for second year = (105120*1.15*12)+120000 = 1342976 Net Gain 2nd year = 1272976 Clearly the firm breaks even in 2nd year Similarly net gain in 3rd year = 1718255

3. Implementation Roadmap (1/2)

PRE LAUNCH STRATEGY

LAUNCH

Implementation Roadmap (2/2)

Pre Launch & Launch
A Teaser Campaign to be launched 1 month prior to inauguration Billboards and newspapers 1st 25 days - Generate lot of hype around a quack with claims of treatment of all ailments Last 5 days Ambush our own campaign with the message no quack works, only genuine practitioners are reliable XYZ provides a one stop Indian solution to all health problems

PRE LAUNCH STRATEGY

LAUNCH STRATEGY

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Free diabetes diagnosis test for 1st day clients Special Health Check Ups at attractive rates for attendees of inaugural function Special Discounts for customers who enroll on the first day for Yoga Classes

4. GO LIVE
Human Resources - Practitioners will be recruited from Indian Board of Alternative Medicines, Calcutta Operations Consultation in different alternative practices Tele-medicine Conducting health workshops in schools, colleges & offices

5. Sustaining Competition Future Roadmap ...

Quality of Service
High Responsiveness Proper Customer Care Value Delivery and follow up Accuracy and Completeness

Environment
Herbal & Ayurvedic Awareness against use of chemicals Environmental norms and standards

Future Plans
E diagnostics with more IT infrastructure in place Expansion in India & Abroad Mobile Vans for rural areas

THANK YOU
WELLNESS