CASE STUDY:APOLLO HOSPITALS OF              INDIA               PRESENTED BY:           SEBY AUGUSTINE(31)          SAURAB...
INDUSTRY ANALYSIS
About the Industry Health   status varied Lag in availability of medical personnel &  facilities  Country               ...
 Health care provided by   State Government   National Government By 1995, existence of150 Corporate comprehensive  ho...
Porter’s 5-force model                   Threat of                  Substitutes     Bargaining                 Bargaining ...
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 pro...
Competition - Intense   Large number of players in the industry   Govt. Hospitals – A strong competition   High exit ba...
Bargaining power of suppliers-High   Referral doctors served as a major source of    customer base.
Bargaining power of Buyers-Limited   No substitute
About the Company   Founded in 1983 by Dr. Pratap C. Reddy   First Corporate hospital in India     Comprehensive     F...
   Management Philosophy       Clear Vision       High quality medical care “With a human face”   Had no models to emu...
Critical Success Factors (CSFs)   CSF, sometimes referred as to strategic    factors are those which are crucial for    o...
Probability of                                 Impact on business   Impact                     High             Medium    ...
CSFs for Apollo HospitalsProbability of                        Impact on   Impact                              business   ...
ENVIRONMENTAL   THREATS ANDOPPORTUNITY PROFILE      (ETOP)
Market Environment   Enormous , unmet demand for high quality health care among    Indians   Hospital Sector     Privat...
Technological Environment   Expensive but no large scale sudden changes
Economic Environment   Economic Development pursued by Indian    Government after independence     Central planning    ...
Regulatory Environment   A new round of changes : Introduction of new industrial    policy by Prime Minister   Dismantli...
Political Environment   Politics had no great role in the industry.   Although lobbying could be used as an    influence...
Socio-cultural Environment   World’s largest democracy   Variety of     Economic   levels     Social status     Cultu...
International Environment   High quality medical care available    internationally as compared to India   Brain Drain - ...
Environmental Sector   Nature of            Impact of Each Factor                        ImpactMarket                     ...
STRATEGIC ADVANTAGE    PROFILE (SAP)
Financial capability factors   Initial skepticism faced       Convincing investors that a super- specialty hospital was ...
Apollo Hospitals MadrasYear       1985   1986   1987      1988       1989      1991      1992       1993       1994Shareho...
Marketing Capability Factors   Marketing capability factors could be    segregated into four basics categories:     Prod...
   Product     High quality services as compared to competitors     Specialized services     High success rate meeting...
   Promotion     Creating  awareness : An initial challenge     Concern on ethical propriety     Focused on encouragin...
   Promotion     Aimed marketing effort at women     Marketing programs       Referrals       Hospital   capabilities...
   Promotion     ApolloHeartbeat : A quarterly news paper     Low priced check- up packages     Advertising   of Speci...
   Price     Higher   prices in comparison to the competitors.
Operational Capability Factors   Effective utilization of equipments   Average stay of the patient is less in    compari...
   High success rate   A well maintained library provided access to    key medical journals & reference books from    ar...
Personnel Capability Factors   Top caliber renowned doctors and surgeons       120 doctors from U.K. and North America ...
   Wages     Apollo hospital : 10-20% higher than local private      hospitals     Government Hospitals : Paid slightly...
Information capability Factors   Recording of complaints in a computer    database that revealed the patterns by     Loc...
General Management CapabilityFactors   Clear vision of Dr. Reddy from the beginning   Advanced medical care possible at ...
   Employees       Motivation       Culture       Compensation Hospitality Value       Total opportunity cost     ...
   High standard and stress on hospitality    towards patient   Emphasis on the fact that every employee    contributed ...
Capability factor        Competitive Strength/WeaknessFinancial capability     Readiness of investors to invest, growth   ...
STRENGTHS, WEAKNESS,  OPPORTUNITIES AND       THREATS   (SWOT ANALYSIS)
Strengths   Professional and personal contacts of Dr Reddy   Colleagues and technology- A central source of    satisfact...
Weaknesses   No models to emulate   Questions about quality control in non-medical    areas     Quantitative  measures ...
Opportunities   To spread the Apollo brand name across India   To create joint ventures with international    medical ce...
Threats   Competition for some skilled staff like nurses   Emigration
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Apollo hospitals presentation (etop & sap)

  1. 1. CASE STUDY:APOLLO HOSPITALS OF INDIA PRESENTED BY: SEBY AUGUSTINE(31) SAURABH NINAMA(23) VINOD VASAVA(37) POOJA TANNA(35)
  2. 2. INDUSTRY ANALYSIS
  3. 3. About the Industry Health status varied Lag in availability of medical personnel & facilities Country Per 1,000,000 population Doctor Nurse Hospital beds India 407 214 1600 U.K 1615 7891 8000 U.S. 2380 3204 5900
  4. 4.  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
  5. 5. Porter’s 5-force model Threat of Substitutes Bargaining Bargaining Forces of power of Power of competition Suppliers Buyers Threat of New Entrants
  6. 6. Threat of Substitutes- limited No substitute for medical care A basic requirement
  7. 7. 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
  8. 8. Competition - Intense Large number of players in the industry Govt. Hospitals – A strong competition High exit barriers (due to high capital investment)
  9. 9. Bargaining power of suppliers-High Referral doctors served as a major source of customer base.
  10. 10. Bargaining power of Buyers-Limited No substitute
  11. 11. 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
  12. 12.  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
  13. 13. 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.
  14. 14. Probability of Impact on business Impact High Medium Low High Critical High Low Medium High High Low Low To be watched Low Low
  15. 15. CSFs for Apollo HospitalsProbability of Impact on Impact business High Medium Low Market, Quality, High International - Regulatory Socio-cultural, Medium - - Economic Low Technological - Political
  16. 16. ENVIRONMENTAL THREATS ANDOPPORTUNITY PROFILE (ETOP)
  17. 17. 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
  18. 18. Technological Environment Expensive but no large scale sudden changes
  19. 19. Economic Environment Economic Development pursued by Indian Government after independence  Central planning  Import substituting industrialization Liberal economic reforms in 1980
  20. 20. 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
  21. 21. 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.
  22. 22. Socio-cultural Environment World’s largest democracy Variety of  Economic levels  Social status  Cultural Group Co-existence of poor and middle class
  23. 23. International Environment High quality medical care available internationally as compared to India Brain Drain - A big issue
  24. 24. Environmental Sector Nature of Impact of Each Factor ImpactMarket Enormous , unmet demand for high quality health care among IndiansTechnological Expensive but no large scale sudden changesEconomical Economic Development, Liberal economic ReformsRegulatory New Industrial Policy, Rao reforms, Dismantling of licensing requirementsPolitical Politics had no great role in the industrySocio-cultural World’s largest democracy, Co-existence of poor and middle classInternational High quality medical care available
  25. 25. STRATEGIC ADVANTAGE PROFILE (SAP)
  26. 26. 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
  27. 27. Apollo Hospitals MadrasYear 1985 1986 1987 1988 1989 1991 1992 1993 1994Sharehold 39,13 45,91 48,732 52,181 54,098 54,178 54,178 54,178 106,319ers’ 5 0Equity Apollo Hospitals Hyderabad Year 1990 1991 1992 1993 1994 Shareholders’ Equity 78,476 83,082 83,310 83,650 153,731
  28. 28. Marketing Capability Factors Marketing capability factors could be segregated into four basics categories:  Product  Promotion  Price
  29. 29.  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
  30. 30.  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
  31. 31.  Promotion  Aimed marketing effort at women  Marketing programs  Referrals  Hospital capabilities  Awareness programs  Public  Local schools
  32. 32.  Promotion  ApolloHeartbeat : A quarterly news paper  Low priced check- up packages  Advertising of Special priced diagnostics packages
  33. 33.  Price  Higher prices in comparison to the competitors.
  34. 34. 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
  35. 35.  High success rate A well maintained library provided access to key medical journals & reference books from around the world Online bibliography search system
  36. 36. 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
  37. 37.  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
  38. 38. Information capability Factors Recording of complaints in a computer database that revealed the patterns by  Location  Type of Complaint
  39. 39. General Management CapabilityFactors 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
  40. 40.  Employees  Motivation  Culture  Compensation Hospitality Value  Total opportunity cost  Quality assurance  CHANGE
  41. 41.  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.
  42. 42. Capability factor Competitive Strength/WeaknessFinancial capability Readiness of investors to invest, growth potential of the company and the sectorMarketing capability High quality service, Effective Promotion Program, High pricesOperational capability Effective utilization of equipments, Lessened duration of average stay per patientPersonnel capability Growth opportunities for employees, Employee participation, Top caliber medical personnelInformation Computerized database of complaintsManagement with a efficient retrieval systemCapabilityGeneral Management Clear vision, Team oriented culture,Capability Open and constructive organisational
  43. 43. STRENGTHS, WEAKNESS, OPPORTUNITIES AND THREATS (SWOT ANALYSIS)
  44. 44. 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
  45. 45. 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?
  46. 46. 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
  47. 47. Threats Competition for some skilled staff like nurses Emigration

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