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

Porters 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. Reddys 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

Worlds 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 Worlds largest democracy, Co-existence of poor and middle class High quality medical care available