Aravind Eye Care System Is it Blue Ocean Move ? Prepared by: Mahipal G. Chauhan Nirav Jadav
Flow of Presentation:About Aravind eye care systemMissionMile stonePre Aravind eye care systemPre BUMPost BUMERRC ModelStrategic CanvasProfit ModelThree tiers of Non CustomerSequences of BOSSix Conventional ModelWhy Blue ocean move?Bibliography
About Aravind Eye Care:Aravind Eye Hospital was founded in 1976, by Dr. G. Venkataswamy, a manknown to most of us simply as Dr. V.He started with 11 bed hospital in rented house.Over the years, this organization has evolved into a sophisticated systemdedicated to compassionate service for sight. The Aravind Eye Care System now serves as a model, for India, and the rest ofthe world.Aravind Eye Hospitals try to maintain a ratio of 1:2 between paying and freepatients, which keeps the enterprise financially viable.
Aravind eye care System: 5 owned hospitals 4 managed hospitals A training institute Eye bankResearch labDrug and eye care equipment manufacturing arm (Aurolab)An international training facility (LAICO) which consults and trains eye hospitalsin other developing countriesConducts over 285,000 eye surgeries and provides over 2.4 million persons withoutpatient eye care per year at the 5 Aravind owned hospitals
Relevance37 million people are blind worldwide.India has 12 million blind people, more than any other country, and 200 millionpeople in need of eye care.In India, simple cataract surgery can restore vision to 7.5 million blindpeople, while refraction and a pair of spectacles can restore vision to 2.4 millionpeople.Cost Advantage and AffordabilityCosts are kept low through: Manufacturing its own intraocular lenses (IOLs) used in cataract surgery (outsourcing not an option as no affordable lenses being manufactured at time) High surgeon productivity: 2600 surgeries/doctor/yearEye care is made affordable through cross-subsidisation: charging patients able topay (~30% of patients) and using the collected fees to subsidize poor patients(~70% of patients)
Four Actions Framework +Eliminate/Reduce/Raise/Create Grid Raise Eliminate Quality Benchmark Emotional Facility for Masses Focus on Primary health care Create Manufacturing own eye care equipment and Reduce lenses Cost Create eye care Professional team Price Research industry for Eye and Diabetes.
Strategic Canvas:6543 Govt.Hospital Private Hospital Aravind eye care210 Price Quality Facility Technology Reach Home delivery Education service institute
Profit Model of Blue Ocean Strategy The profit model of blue ocean strategy shows how value innovation typically maximizes profit by using the three levers of strategic price, target cost, and pricing innovation. The Strategic Price ($50 to $ 300) The Target Profit (25$) The Target Cost (25$) Streamlining and Cost Partnering Innovations Pricing Innovation
Three Tiers of Noncustomers High end Customers Middle Class Below Poverty Line People
Sequence of Blue Ocean Strategy Buyer utility Work on Purchase, Delivery ,Convenience , Use and Risk No-- Rethink Yes Price Low Price No-- Rethink Yes Cost Self training, IOL manufacturing , Research study , Decrease time No-- Rethink Yes Adoption Increase man power efficiency , Technological innovation No-- Rethink Yes A Commercially Viable Blue Ocean Idea
Why Blue Ocean Move? Create uncontested market space Make the competition irrelevant Create and capture new demand Break the value-cost trade-off Align the whole system of a firm’s activities in pursuit of differentiation and low cost Better Eye care specialist made.