Strategic management paper on a tertiary level hospital

Case Study: MAKATI MEDICAL CENTER
Arianna S. Abundo, 2020
Strategic Management

1 About MMC
2 Industry and Competitor Analysis
3 Internal and Company Analysis
4 Strategy Formulation
5 Strategic Plans and Objectives
6 Monitoring and Control
7 Contingency Plans

I
V
About MMC

MMC at a glance
600
Bed capacity
Level 1 million
Annual patient count
25 specialties
51 sub-specialties
25 specialties
51 sub-specialties
3700
Employees
35.4%
2018 market
share

Philippines
5
Joint Commission
International (JCI)-
Accredited
Organizations in
ASEAN
Myanmar
1
Vietnam
4
Thailand
67
Cambodia
1
Malaysia
13
Singapore
21 Indonesia
31
Brunei
2

To be the Philippines’ undisputed leading
medical center by 2018 and competitive with
the best in the world by 2020, staffed with
highly experienced/highly qualified medical and
healthcare practitioners, enabled by state-of-
the-art diagnostic and medical/surgical
equipment and a cadre of well-trained
professional support staff. Our patients and
their families should experience the highest level
of satisfaction with the healthcare services we
provide.
Current Vision
To provide our patients with safe, effective,
appropriate and meaningful healthcare
environment, delivered by the most competent,
caring and compassionate team of medical
professionals and support staff.
Core Values summarized by the overarching
value called Malasakit: integrity, transparency,
compassionate care, service excellence,
respect, teamwork, accountability,
professionalism, safety, and quality of life.
Current Mission

To be the Philippines’ undisputed leading
academic medical center by 2020 and
competitive with the best in the world by 2024.
Proposed Vision
Does it clearly answer the question, what
do we want to become?
Is it concise enough yet inspirational?
Is it aspirational?
Does it give clear indication as to when it
should be obtained?

Makati Medical Center exists to provide our patients (1) with safe, effective, appropriate and
meaningful healthcare (2) of the highest standards, both within the Philippines (10) and
internationally (3). We are committed to providing the best patient experience through state-
of-the-art healthcare (4) delivered by the most competent, caring, and compassionate medical
team (7). The company aims to create an optimal environment for working (8), with
continuous enhancement of current processes and integration of new strategies to ensure
financial and operational success (5).
Makati Medical Center is guided by compassion (9), with an overall philosophy of malasakit (6)
in all the work that we do. This approach can be further divided into our ten Core Values:
integrity, transparency, compassionate care, service excellence, respect, teamwork,
accountability, professionalism, safety, and quality of life.
Proposed Mission
1. Customers
2. Products and services
3. Markets
4. Technology
5. Concern for survival, growth, and
profitability
6. Philosophy
7. Self-concept
8. Concern for employees
9. Concern for public image
10. Concern for nation building

I
V
Industry and
Competitor
AnalysisArianna S. Abundo, 2020

10Macro-Environmental Analysis
Economic
HMOs
Strong regional
economy driving
greater total
healthcare
expenditures
PHP:USD exchange
rate
Increasing number of
business alliances
Real estate trends
Entry of
conglomerates into the
hospital industry
Social/Cultural
Prevalence of
NCDs
Population growth
trends
Attrition of
medical
professionals
Health
consciousness of
the populace
Technologic
Advances in
medical
technology
Digitalization of
hospital records
Environmental
Exposure to
disaster risk
Universal Health
Care Act
(RA 11223)
ASEAN Mutual
Recognition
Arrangement on
Medical
Practitioners
Occupational
Health and Safety
Act (RA 11058)
Political/Legal

PHP 7.33B
PHP 5.49B
PHP 7.08B
The Industry is defined as private pay tertiary level hospitals in Metro Manila with 500 beds or more. Key
competitors are St. Luke’s Medical Center in Bonifacio Global City (SLMC-BGC) and The Medical City in Ortigas
(TMC-MAIN). These industry players are similar in terms of international accreditation, bed capacity, business
model, organizational structure, service capacity, and medical staff.
Industry Players
5 billion
6 billion
7 billion
8 billion
MMCTMC-MAIN
27.7% 35.4%
SLMC-BGC
36.9%

Porter’s Five Forces
Philippine
Healthcare
Industry
Threat of new entrants
Moderate threat
Large-scale entry is difficult. New entrants must
compete with the strong reputation of established
healthcare providers, as well as fulfill regulations
and extensive capital requirements.
Supplier Power
Moderate
Supplier power is increased because
pharmaceuticals and medical devices are
necessary, thus allowing suppliers to negotiate
higher prices. However due to the extensive
number of firms distributing drugs and
medical devices, and the high competition to
gain hospital business, there is a weakened
net bargaining power.
Threat of substitution
Weak threat
There are very few alternatives to healthcare services,
with alternative treatments largely unproven.
Competitive Rivalry
Moderate competition
Larger hospitals compete on efficiency,
quality of care, and price. Due to their size,
they benefit from scale economies and can
negotiate competitively on pricing.
Overall strong growth of expenditure has
alleviated rivalry in recent years.
Buyer Power
Moderate
Key buyers range from individual consumers to
large-scale health insurance companies
(government-funded PhilHealth and private
insurance plans).
Buyer power is weakened because healthcare
services are essential for health and survival.

PreviousNext
13
Competitor size
Hard to exit
Lack of
diversity
Low cost switchingNumber of players
Similarity of
players
Undifferentiated
product
100
80
60
40
20
Relative Strength: 0 (weak) to 100 (strong)
Rivalry of competition
The Philippine public health system is decentralized, with over 1000
autonomous local health systems segregated by geography. This increases
rivalry of competition, as providers compete for investment and patients.
Current and forecasted strong growth of the sector, along with rising income
and population growth will alleviate rivalry.
Many hospitals offer similar services, which increases rivalry among
competitors. However, those that are able to obtain specialized equipment or
offer specialist care will have a competitive edge. Ancillary health services
have fewer points of differentiation and will compete on care and price.
Intra-segment rivalry exists, with large hospitals facing increased rivalry
from smaller clinics for outpatient care. Large hospitals have the competitive
advantage in terms of inpatient care, because they have significant capital
which allows for greater negotiation efforts with suppliers.
Large buyers (i.e. insurance companies) have high switching costs, while
individual consumers face far fewer switching costs.
There are high exit costs for the healthcare provider sector overall.

PreviousNext
14
Distribution accessible
Little regulation
Low cost-
switching
Market growthScale unimportant
Suppliers
accessible
Undifferentiated
product
100
80
60
40
20
The Filipino healthcare providers sector grew at a CAGR of 9.2% from 2014 to
2018, increasing from USD $9.9 billion in 2014 to USD $14.1 billion in 2018.
This increased investment will attract new entrants.
New entrants will find it easiest to enter on a small scale. Outpatient care
currently accounts for 22.2% of total revenues of Filipino healthcare providers
(2018), indicating that there is room for new entrants in the sector.
Conversely, large-scale ventures require significant capital for land,
buildings, and expensive healthcare equipment.
There is also increased pressure on new entrants to comply with policies
set by the Department of Health (DOH), with the threat of litigation costs and
added insurance acting as barriers to new entry.

PreviousNext
15
100
80
60
40
20
Differentiated input
Forward
integration
Importance of
quality/cost
No substitute inputsOligopoly threat
Player
independence
Supplier size
Switching costs
Bargaining power of suppliers
The key suppliers in the healthcare sector are pharmaceutical
companies, healthcare equipment suppliers, and qualified staff.
Due to the large number of players, availability of generic substitutes
for innovator products, and the low switching cost from one
manufacturer to another, pharmaceutical companies have weak
bargaining power.
Healthcare equipment suppliers have moderate bargaining power. The
availability and quality of equipment are essential to the practice of
medicine, and providers on suppliers for steady delivery of products.
Many processes must be completed before a product enters the market,
and thus suppliers are able to maintain high prices. However,
conversely, there are many large distributors and competition among
them is fierce. Switching costs may be high or low depending on the
complexity of the product.
Qualified staff have strong bargaining power, with the availability of
high quality medical staff providing labor being essential to medicine.

PreviousNext
16
Buyer
independence
100
80
60
40
20
Backwards integrationUndifferentiated product
Tendency to
switch
Buyer sizeProduct
dispensability
Price sensitivity Financial
muscle
Oligopsony threat Low cost switching
Bargaining power of buyers
The key buyers in the healthcare sector range from small (individual
consumers) to large (insurance companies).
With the passing of the Universal Health Care Act (RA 11223), strong
efforts have been made to enroll Filipino citizens in government-funded
PhilHealth to provide comprehensive care and easy access to medical
services. Private health insurance plans have also become popular in the
last decade, particularly as an employee benefit.
While public hospitals are funded by the government, private hospitals
are funded by payments made by patients and insurers. Contracts made
between hospitals and large insurance companies strongly impact their
revenues, as high price sensitivity of these companies could suppress
profit margins.
With the exception of some products and services (i.e. elective
treatments), generally services provided by the healthcare sector are
essential which reduces buyer power.
Both individuals and large insurance companies may incur switching
costs.

PreviousNext
17
100
80
60
40
20
Beneficial alternative
Cheap alternativeLow cost switching
Threat of substitutes
Due to the essential nature of healthcare, there are few substitutes for
medical care.
One alternative may be preventive, or proactive, healthcare such as
healthy lifestyle change. This may be a substitute by preventing
occurrence or progression of many disease.
Alternative medicine can also be seen as a potential substitute for
traditional, evidence-based medicine. However, the utility of these
substitutes are low and alternative care may not be sufficient for cure.
There are also fewer regulations in place to determine efficacy and safety.
Despite the rise in preventive healthcare and existence of alternative
medicine, ultimately healthcare is still reliant on curative care and the
threat of substitutes is assessed as weak.

Summary of Porter’s Five Forces
Philippine
Healthcare
Industry
→ MODERATE
Supplier Power
→ MODERATE
Threat of substitution
→ WEAK
Competitive Rivalry
→ MODERATE
Buyer Power
→ MODERATE
Overall, with a CAGR of 9% and the moderate
threat of new entrants and substitutes, the
Philippine healthcare industry can be
considered moderately attractive.
In terms of competitiveness, the industry is
moderately competitive. This is supported by
the overall ratings for rivalry among existing
competitors and bargaining power of suppliers
and buyers.

Competitive Profile Matrix
1. High quality of patient care
experience
2. Strong financial position
3. Extensive roster of medical
professionals and available specialized
services
4. Medical device innovation
5. Affiliation with third party payors
6. Price competitiveness
7. Brand awareness and marketing
8. Geographic location and accessibility
9. Well-maintained facilities and
adequate availability
TOTAL
0.14
0.14
0.14
0.13
0.13
0.08
0.08
0.08
0.08
1.00
Critical Success Factor
Importance
Weight
MMC
Rating Score
3
3
2
3
3
3
4
4
2
0.42
0.42
0.28
0.39
0.39
0.24
0.32
0.32
0.16
2.94
SLMC-BGC
Rating Score
4
4
4
4
4
2
3
3
4
0.56
0.56
0.56
0.52
0.52
0.16
0.32
0.32
0.32
3.68
TMC-MAIN
Rating Score
2
2
3
2
2
4
2
2
3
0.28
0.28
0.42
0.26
0.26
0.32
0.32
0.24
0.24
2.38

Makati Medical Center faces a substantial threat
from St. Luke’s Medical Center (BGC) for the
following reasons:
1. SLMC-BGC provides comparable, if not better,
client care to the same target demographic
2. SLMC-BGC may choose to price services
competitively (low- to medium-probability)
3. SLMC-BGC has the financial muscle to undertake
aggressive modernization
4. SLMC-BGC can undertake geographic expansion
west or south of Makati
5. SLMC-BGC has the physical space to expand its
facilities
SLMC-BGC 3.68
MMC 2.94
TMC-MAIN 2.38
Results of CPM

External Factor
Evaluation (EFE) Matrix
Opportunities Importance Weight Rating Weighted Score
O1 Day-time population of 4.7 million and an
additional night-time market contributed by the BPO
industry
0.10 3 0.30
O2 Increasing healthcare expenditure from HMOs
and private sources
0.10 4 0.40
O3 Rise of self-contained communities or townships 0.10 2 0.20
O4 Rise in business alliances 0.10 4 0.40
O5 Shifting health needs of the population 0.05 3 0.15
O6 Advances in technology 0.05 3 0.15
O7 Health consciousness of the populace 0.05 3 0.15
TOTAL OPPORTUNITIES SCORE 0.55 1.75

External Factor
Evaluation (EFE) Matrix
Threats Importance Weight Rating Weighted Score
T1 Increased competition for medical professionals 0.10 2 0.20
T2 Rapid obsolescence of medical equipment 0.10 3 0.30
T3 Conglomerates and real estate developers that
are expanding their own hospital networks
0.10 1 0.10
T4 Increased investment in public health care 0.05 2 0.10
T5 Volatile exchange rate and depreciating peso 0.05 3 0.15
T6 Exposure to geological hazards 0.05 2 0.10
TOTAL THREATS SCORE 0.45 0.95

Importance Weight Weighted Score
Total Opportunities Score 0.55 1.75
Total Threats Score 0.45 0.95
TOTAL EFE SCORE 1.00 2.70
With an EFE score of 2.70, Makati Medical Center’s response to opportunities and threats
in its macro-environment is within acceptable level.
The firm has largely made efforts to capitalize on opportunities yet takes a passive
approach to looming threats.
In order to more aggressively respond to the macro-
environment, the firm must continue its efforts in capturing all
opportunities while striving to go beyond the actions of its
competitors in response to threats.

Internal Audit
and Company
AnalysisArianna S. Abundo, 2020

Internal Factor
Evaluation (IFE) Matrix
Strengths Importance Weight Rating Weighted Score
S1 Strong brand 0.15 4 0.60
S2 Business systems in place 0.15 4 0.60
S3 Competitive pricing vs. industry leader 0.10 3 0.30
S4 Profitable operations 0.10 3 0.30
S5 Strong ties with third party payors 0.10 3 0.30
S6 High quality of patient care experience 0.05 4 0.20
S7 Updated medical devices 0.05 3 0.15
TOTAL STRENGTHS SCORE 0.70 2.45

Internal Factor
Evaluation (IFE) Matrix
Weaknesses Importance Weight Rating Weighted Score
W1 Decreasing relative market share 0.10 1 0.10
W2 Lack of expansion sites 0.05 1 0.05
W3 Lack of medical research program 0.05 1 0.05
W4 Outdated facilities compared to competitor
facilities
0.05 1 0.05
W5 Fewer subspecialties compared to competitor 0.05 2 0.10
TOTAL WEAKNESSES SCORE 0.70 0.35 0.95

Importance Weight Weighted Score
Total Strengths Score 0.70 2.45
Total Weaknesses Score 0.30 0.35
TOTAL IFE SCORE 1.00 2.80
With an IFE score of 2.80, Makati Medical Center has a relatively strong internal position.
It has been able to generate considerable company strengths while minimizing its
weaknesses, placing it in a good competitive position to capture opportunities and
minimize the impact of threats.
In terms of future direction, the firm must capitalize on its
strengths to regain the greatest market share, and remedy
internal weaknesses by looking into expansion and increased
investments into research and physical facilities.

Strategy
Formulation

SWOT Matrix
STRENGTHS
WEAKNESSES
Decreasing
relative
market share
Lack of
medical
research
program
Fewer
sub-
specialties
Lack of
expansion
sites
Outdated
facilities
Strengths - Weaknesses
Strong
brand
Business
systems
in place
Competitive
pricing
Profitable
operations
Strong ties
with 3rd
party payors
High
quality of
patient
care
Updated
medical
devices

Increased competition for medical
professionals
Rapid obsolescence of medical equipment
Conglomerates and real estate developers
expanding their own hospital networks
Increased investment in public health care
Volatile exchange rate and depreciating
peso value
Exposure to geological hazards
T1
T2
T3
T4
T5
T6
Daytime population of 4.7 million and an
additional nighttime market contributed by
the BPO industry
Increasing healthcare expenditure from
HMOs and private sources
Rise of self-contained communities or
townships offer more expansion
opportunities
Rise in business alliances
Shifting health needs of the population
Advances in technology
Health consciousness of the populace
O1
O2
O3
O4
O5
O6
O7
OPPORTUNITIES THREATS
SWOT Matrix
Opportunities - Threats

SWOT Matrix
SO Strategies
S
Strengths
O
Opportunities
S0 Strategies
SO1: Replicate niche, off-site centers (such as the
Women’s Comprehensive Center) in its present market
and in regions with high disposable income, and adopt
premium pricing. (S1, S6, O3, O5)
SO4: Develop comprehensive, affordable bundled service
packages for employee annual physical exams for
corporate partner needs. (S3, S5, S6, S7, O1, O4)
 S1: Strong brand
 S2: Business systems in place
 S3: Competitive pricing (vs. industry leader)
 S4: Profitable operations
 S5: Strong ties with third party payors
 S6: High quality of patient care experience
 S7: Updated medical devices
 O1: Daytime population of 4.7 million and an
additional nighttime market contributed by the
BPO industry
 O2: Increasing healthcare expenditure from
 O3: Rise of self-contained communities or
townships offer more expansion opportunities
 O4: Rise in business alliances
 O5: Shifting health needs of the population
 O6: Advances in technology
 O7: Health consciousness of the populace
SO2: Open Makati Med-branded regional and satellite
clinics. (S1, O5, O6, O7)
SO3: Develop a content-driven website and app similar
to Mayo Clinic to encourage patients to consult with
physicians. (S1, O5, O6, 07)

SWOT Matrix
WO Strategies
W
Weaknesses
O
Opportunities
W0 Strategies
WO1: Set up hospital branches in Central Luzon and
Calabarzon region with 300 beds or more. (W1, W2, O2, O3)
WO4: Establish the hospital as an academic hub through
increased research exposure. (W3, W5, O6)
 W1: Decreasing relative market share
 W2: Lack of expansion sites
 W3: Lack of medical research program
 W4: Outdated facilities compared to competitor
 W5: Fewer subspecialties compared to
competitor
 O1: Daytime population of 4.7 million and an
additional nighttime market contributed by the
BPO industry
 O2: Increasing healthcare expenditure from
 O3: Rise of self-contained communities or
townships offer more expansion opportunities
 O4: Rise in business alliances
 O5: Shifting health needs of the population
 O6: Advances in technology
 O7: Health consciousness of the populace
WO2: Partner with more HMOs to have exclusive hospital
wings to give members priority and privileged treatment. (W4,
O2, O4)
WO3: Expand the Strategic Hospital Alliance Program to
include more regional and international hospital partners.
(W2, O4)
WO5: Establish linkages with government agencies and
organizations of Filipino expatriates for medical tourism. (W1,
O4)

SWOT Matrix
ST Strategies
S
Strengths
T
Threats
ST Strategies
ST1: Partner with real estate developers that do not
have their own associated hospital networks to establish
a presence in self-contained communities. (S3, S6, T3)
ST4: Minimize currency risk by exercising foreign
exchange options. (S4, T5)
 S1: Strong brand
 S2: Business systems in place
 S3: Competitive pricing (vs. industry leader)
 S4: Profitable operations
 S5: Strong ties with third party payors
 S6: High quality of patient care experience
 S7: Updated medical devices
 T1: Increased competition for medical
professionals
 T2: Rapid obsolescence of medical equipment
 T3: Conglomerates and real estate developers
 T4: Increased investment in public health care
 T5: Volatile exchange rate and depreciating peso
value
 T6: Exposure to geological hazards
ST2: Strengthen existing employee incentives,
compensation, and rewards programs to increase
employee satisfaction and lower attrition rates. (S4, T1)
ST3: Develop strategic alliances and partnerships with
foreign institutions to offer more specialized training,
care, and biomedical equipment. (S1, S6, S7, T2, T4)

SWOT Matrix
WT Strategies
W
Weaknesses
T
Threats
WT Strategies
WT1: Form and strengthen current strategic alliances
with academic centers and learning institutions to
provide direct and unique employment opportunities.
(W3, W5, T1, T4)
WT4: Develop a robust medical research department
with a required set of publications per department per
year. (W3, T1, T4)
 W1: Decreasing relative market share
 W2: Lack of expansion sites
 W3: Lack of medical research program
 W4: Outdated facilities compared to competitor
 W5: Fewer subspecialties compared to
competitor
WT2: Develop stronger partnerships with medical
schools to allow for more clinical rotations and increased
exposure of training physicians. (W3, W5, T1, T4)
WT3: Develop a Disaster Assistance and Preparedness
Program (DAPP), investigate possible evacuation sites,
and run regular drills. (W4, T6)
 T1: Increased competition for medical
professionals
 T2: Rapid obsolescence of medical equipment
 T3: Conglomerates and real estate developers
 T4: Increased investment in public health care
 T5: Volatile exchange rate and depreciating peso
value
 T6: Exposure to geological hazards

1
2
3
4
Grouping of
Strategies
Backward Integration
Product Development
Market Penetration
Market Development
5 Diversification
6 Retrenchment
SO3: Develop a content-driven
website and app similar to Mayo
Clinic to encourage patients to
consult with physicians.
ST2: Strengthen existing employee
incentives, compensation, and
rewards programs to increase
employee satisfaction and lower
attrition rates.
WT1: Form and strengthen current
strategic alliances with academic
centers and learning institutions to
provide direct and unique
employment opportunities.
WT2: Develop stronger
partnerships with medical schools
to allow for more clinical rotations
and increased exposure of training
physicians.

1
2
3
4
Grouping of
Strategies
Product Development
Market Penetration
Market Development
5 Diversification
6 Retrenchment
SO1: Replicate niche, off-site centers
(such as the Women’s Comprehensive
Center) in its present market and in
regions with high disposable income, and
adopt premium pricing.
SO4: Develop comprehensive, affordable
bundled service packages for employee
annual physical exams for corporate
partner needs.
WO2: Partner with more HMOs to have
exclusive hospital wings to give members
priority and privileged treatment.
WO4: Establish the hospital as an
academic hub through increased research
exposure.
WT4: Develop a robust medical research
department with a required set of
publications per department per year.
ST3: Develop strategic alliances and
partnerships with foreign institutions to
offer more specialized training, care, and
biomedical equipment.Arianna S. Abundo, 2020

1
2
3
4
Grouping of
Strategies
Product Development
Market Penetration
Market Development
5 Diversification
6 Retrenchment
WO1: Set up hospital branches in
Central Luzon and Calabarzon
region with 300 beds or more.
WO3: Expand the Strategic
Hospital Alliance Program to
include more regional and
international partners.
ST1: Partner with real estate
developers that do not have their
own associated hospital networks
to establish a presence in self-
contained communities.

1
2
3
4
Grouping of
Strategies
Product Development
Market Penetration
Market Development
5 Diversification
6 Retrenchment
SO2: Open Makati Med-branded
regional and satellite clinics.

1
2
3
4
Grouping of
Strategies
Product Development
Market Penetration
Market Development
5 Diversification
6 Retrenchment
Related Diversification
WO5: Establish linkages with
government agencies and
organizations of Filipino expatriates
for medical tourism.
Unrelated Diversification
WT3: Develop a Disaster
Assistance and Preparedness
Program (DAPP), investigating
possible evacuation sites, and run
regular drills.

1
2
3
4
Grouping of
Strategies
Product Development
Market Penetration
Market Development
5 Diversification
6 Retrenchment
ST4: Minimize currency risk by
exercising foreign exchange
options.

Strategic Position and Action Evaluation
Market share -2
Quality of patient care -1
Strategic location and
accessibility -3
Physician roster -3
Information technology -2
Utilization rate -6
TOTAL -17
Average -2.8
Liquidity +5
Profitability +6
Sales growth +5
Leverage +5
Cash flow +5
TOTAL +26
Average +5.2
Industry Position (IP)
SPACE Matrix
Stability Position (SP)
Industry growth +6
Industry profit margins +6
Rivalry of competition +3
Barriers to exit +3
Substitutes +6
TOTAL +24
Average +4.8
Competitive Position (CP)
Technological changes -7
Foreign exchange rate -4
Household income and
health expenditures -1
Non-communicable
diseases (NCDs) -2
Environmental risks -4
TOTAL -18
Average -3.6
Financial Position (FP)

Organizations that fall in the aggressive quadrant
are in an excellent position to use internal
strengths to take advantage of external
opportunities, overcome internal weaknesses, and
avoid external threats.
Makati Medical Center is a financially strong firm
that has achieved many competitive advantages in
a growing and stable industry.
FP
SP
IPCP
SPACE Matrix
CONSERVATIVE AGGRESSIVE
DEFENSIVE COMPETITIVE
(2.0, 1.6)

• Market penetration
• Market development
• Product development
• Backward integration
• Forward integration
• Horizontal integration
• Diversification
FP
SP
IPCP
SPACE Matrix
CONSERVATIVE AGGRESSIVE
DEFENSIVE COMPETITIVE
(2.0, 1.6)
Relevant Strategies:

BCG Growth-Share Matrix
❖ Using net profit margin, the profitability for SLMC-BGC is 25% while MMC is at 8%.
❖ No data was available regarding the profitability of each segment.
MMC Relative Market Share
1.0
0.92
Inpatient
Outpatient
MMC Market
Share
SLMC-BGC
Market Share
MMC Relative
Market Share
Industry Growth
Rate (‘17-’18)
Inpatient 36% 35% 1.0 15.2%
Outpatient 35% 38% 0.92 8.6%
20
30
40
Inpatient Outpatient
MMC SLMC-BGC
Market share per segment
(2018)
Industry Growth Rate
(2017-2018)
INPATIENT
OUTPATIENT
15.2%
8.6%

MMC Market
Share
SLMC-BGC
Market Share
MMC Relative
Market Share
Industry Growth
Rate (‘17-’18)
Inpatient 36% 35% 1.0 15.2%
Outpatient 35% 38% 0.92 8.6%
Question Mark
Products with high market
growth but low market share
and uncertain growth rate.
Dogs
Products that should be taken
off market if not profitable.
Cash Cows
Very profitable products w/
strong market growth and
high and stable market share.
Relative Market Share
MarketGrowthRate
High
Low
LowHigh
Invest
Slim
Skim
Divest
Stars
Potentially profitable products
with high market share in a
rapidly growing market.
+20
0
-20
1.0 0.50 0.0
Inpatient
Outpatient

MMC Market
Share
SLMC-BGC
Market Share
MMC Relative
Market Share
Industry Growth
Rate (‘17-’18)
Inpatient 36% 35% 1.0 15.2%
Outpatient 35% 38% 0.92 8.6%
MarketGrowthRate
High
Low
LowHigh
Invest
Slim
Skim
Divest
+20
0
-20
1.0 0.50 0.0
Inpatient
Outpatient
Relevant Strategies:
• Forward integration
• Backward integration
• Horizontal integration

MMC Market
Share
SLMC-BGC
Market Share
MMC Relative
Market Share
Industry Growth
Rate (‘17-’18)
Inpatient 36% 35% 1.0 15.2%
Outpatient 35% 38% 0.92 8.6%
MarketGrowthRate
High
Low
LowHigh
Invest
Slim
Skim
Divest
+20
0
-20
1.0 0.50 0.0
Inpatient
Outpatient
Stars
Potentially profitable products with high market share in
a rapidly growing market.
• These divisions represent the firm’s best
long-run opportunities for growth and
profitability
• High relative market share
• High industry growth rate
• These segments should receive substantial
investment to maintain or strengthen their
dominant positions

Internal-External (IE) Matrix
LowMediumHigh Strong Average Weak
ExternalFactorEvaluation
Internal Factor Evaluation
I II III
IV V VI
VII VIII IX
2.80
2.70
Hold and maintain strategies are recommended:

Future Market Growth: RAPIDGrand Strategy Matrix
• The entire Philippine healthcare provider sector has
experienced massive growth over a 4-year period
(2014-2018: between 7.4% and 10.4%)
• Forecasted to continue growing between 8.2% and 9.2%
• Stimulated by economic growth, higher employment
levels, social insurance contributions, and increased
demand and interest in the industry
Competitive Position: STRONG
• MMC is the second leading firm in the industry, with a
CPM rating of 2.94 (SLMC-BGC: 3.84)
• With an EFE score of 2.70 and an IFE score of 2.80, the firm
is able to respond to external threats and deal with internal
weaknesses
RAPID MARKET GROWTH
SLOW MARKET GROWTH
STRONG
COMPETITIVE
POSITION
WEAK
COMPETITIVE
POSITION
QUADRANT IQUADRANT II
QUADRANT IVQUADRANT III

Grand Strategy Matrix
RAPID MARKET GROWTH
SLOW MARKET GROWTH
STRONG
COMPETITIVE
POSITION
WEAK
COMPETITIVE
POSITION
QUADRANT IQUADRANT II
QUADRANT IVQUADRANT III
Firms in Quadrant I are in an excellent strategic
position to continue concentrating on current
markets and products.
Recommended strategies:

Summary of Strategies
SWOT SPACE BCG IE GRAND TOTAL
Backward integration
Forward integration
Horizontal integration
Product development
Market penetration
Market development
Related diversification
Unrelated diversification
Retrenchment
Divestiture
Liquidation
3
2
2
5
5
4
2
1
1
0
0
Market penetration 5

QSPM
Quantitative Strategic Planning Matrix
Key Factors Weight
Product
Development
Market
Penetration
Market
Development
AS TAS AS TAS AS TAS
OPPORTUNITIES
O1: Daytime population of 4.7 million and an additional nighttime market
contributed by the BPO industry
0.10 3 0.3 4 0.4 2 0.2
O2: Increasing healthcare expenditure from HMOs and private sources 0.10 4 0.4 4 0.4 4 0.4
O3: Rise of self-contained communities or townships offer more expansion
opportunities
0.10 4 0.4 2 0.2 4 0.4
O4: Rise in business alliances 0.10 4 0.4 4 0.4 4 0.4
O5: Shifting health needs of the population 0.05 4 0.2 4 0.2 4 0.2
O6: Advances in technology 0.05 4 0.2 4 0.2 4 0.2
O7: Health consciousness of the populace 0.05 4 0.2 4 0.2 4 0.2
Subtotal 0.55 2.1 2.0 2.0

Key Factors Weight
Product
Development
Market
Penetration
Market
Development
THREATS
T1: Increased competition for medical professionals 0.10 2 0.2 2 0.2 2 0.2
T2: Rapid obsolescence of medical equipment 0.10 4 0.4 2 0.2 3 0.3
T3: Conglomerates and real estate developers expanding their own hospital
networks
0.10 3 0.3 2 0.2 4 0.4
T4: Increased investment in public health care 0.05 4 0.2 4 0.2 3 0.15
T5: Volatile exchange rate and depreciating peso value 0.05 - - - - - -
T6: Exposure to geological hazards 0.05 - - - - - -
Subtotal 0.45 1.1 0.8 1.05
QSPM

Key Factors Weight
Product
Development
Market
Penetration
Market
Development
STRENGTHS
S1: Strong brand 0.15 4 0.6 4 0.6 4 0.6
S2: Business systems in place 0.15 3 0.45 3 0.45 4 0.6
S3: Competitive pricing (vs. industry leader SLMC-BGC) 0.10 4 0.4 4 0.4 4 0.4
S4: Profitable operations 0.10 4 0.4 4 0.4 4 0.4
S5: Strong ties with third party payors 0.10 3 0.3 3 0.3 3 0.3
S6: High quality of patient care experience 0.05 3 0.15 4 0.2 4 0.2
S7: Updated medical devices 0.05 4 0.2 3 0.15 3 0.15
Subtotal 0.55 2.1 2.0 2.0
QSPM

Key Factors Weight
Product
Development
Market
Penetration
Market
Development
WEAKNESSES
W1: Decreasing relative market share 0.10 4 0.4 3 0.3 4 0.4
W2: Lack of expansion sites 0.05 1 0.05 3 0.15 3 0.15
W3: Lack of medical research program 0.05 2 0.1 3 0.15 2 0.1
W4: Outdated facilities compared to competitor 0.05 4 0.2 2 0.1 2 0.1
W5: Fewer subspecialties compared to competitor 0.05 3 0.15 3 0.15 1 0.05
Subtotal 0.30 0.9 0.85 0.8
TOTAL 1.00 6.6 6.15 6.5
QSPM

Strategic
Plan and
ObjectivesArianna S. Abundo, 2020

Strategic Challenge
MMC exists within an industry
exhibiting a 3-year CAGR of 9.0%.
Rapid Industry
Growth
Moderate overall risk from rivalry of
competition, threat of new entrants and
substitutes, and bargaining power of
suppliers and buyers
Competitive
Environment
Proposed Vision: To become the
Philippines’ undisputed leading
academic medical center by 2020
and competitive with the best in the
world by 2024.
Network
Expansion
Strengths: Strong brand reputation, state-of-
the-art medical devices, streamlined business
processes
Weaknesses: Landlocked, outdated facility,
lack of a robust research division, fewer
specialties and sub-specialties.
Competitive
Position
Opportunities: Rise in business alliances, HMO
partnerships, changing needs of the population
Threats: Increased investment in public health
care, risks of healthcare personnel shortage, and
conglomerates and real estate developers
expanding their hospital networks
Opportunities
& Threats

Corporate Strategic Objective
Functional Strategic Objective: Organizational Growth
Functional Strategic Objective: Finance
Functional Strategic Objective: Marketing3
2
1
Recommended
Objectives
Expand services and promote brand growth to position MMC as the undisputed leading
internationally-accredited private, tertiary hospital of choice in the country with a market share
of at least 40% by the end of 2022.
Achieve a 4-year average revenue growth between 12% and 14% CAGR, generate PHP11.5B
in gross revenues, PHP1.57B in net operating profit, and PHP1.05B in net profit by 2022.
Establish a strong brand identity as an academic institution at the forefront of medical
development and research by 2022.
Attain a roster of 1,600 affiliated board-certified physicians practicing across at least 150
specialties and subspecialties by 2022.
4

Corporate
Strategic
Objective
Expand services and promote brand growth to position Makati
Medical Center as the undisputed leading internationally-
accredited private, tertiary hospital of choice in the country
with a market share of at least 40% by the end of 2022.
• Patient Confidence Remains High: The firm’s ability to
provide quality patient care is solidified with consistent
JCI re-accreditation and numerous awards received
• Improvements to be Addressed: In recent years, MMC
has lagged behind competitors in terms of infrastructure,
physical facilities, and service offerings
• Failure to Capitalize: MMC’s strong brand should be
used to promote growth to reach a growing population
with varying needs
• Reaching a 40% Market Share: With a rapidly growing
Philippine healthcare industry and promising business
operations, an increase of roughly 5% is a realistic goal

Finance
Objective
Achieve 4-year average revenue growth between 12% to 14%
CAGR, generate PHP 11.5 billion in gross revenues, PHP 1.57
billion in net operating profit, and PHP 1.05 billion in net
profit by 2022.
• Keys to Strong Financial Positioning: Increasing revenues
and profitability will aid in brand growth through expansion.
• Maintain Status Quo, Stay in Second Place: Assuming an
industry rate of 9% and 2018 market share of 35.6%, the firm
is projected to have a gross revenue of nearly PHP 10B by
2022.
• Implementing Strategies to See Financial Improvements:
Proposed strategies predict year-on-year growth rates of
10% to 16%, leading to a future 4-year CAGR of 13.83%
(2019-2022) and doubling of net profit margins to PHP
1.05M in 2022.
• Growth Trends: Initial dip in 2019 then slow growth as
expansion begins, followed by the most rapid growth by end
of 2020 and going into 2021.

Marketing
Objective
Establish a strong brand identity as an academic institution at
the forefront of medical development and research by 2022.
• Room for Improvement: Results of the Internal Audit
indicate that a majority of research is done to fulfill
academic requirements.
• Research Engagement Improves Health Services
Performance: Out of 33 papers studied, 28 described
positive performance as a result of research with 17
reporting direct consequences as a result of research
interventions (Hanney, et al., 2015).
• Understanding Potential: In order to achieve real
transformation in the research landscape, hospital
administration must develop staff capacity and promote
a culture that supports research and research use.

Organizational Growth
Objective
Attain a roster of 1,600 affiliated board-certified physicians
practicing across at least 150 specialties and subspecialties
by 2022.
• Competition is Fierce: An extensive roster of physicians
can provide an advantage for competing firms that offer
similar products.
• Necessary Requirements: These physicians must be
actively practicing at the hospital and have received their
diplomate status in their respective specialty societies as
well as further subspecialties.
• A Multitude of Benefits: Patients are more likely to
gravitate to institutions that offer their desired services,
while physicians will want to train and practice at an
institution that can offer prestige through modern
advances in medicine.

Strategy 1
Replicate niche, off-site centers in
its present market and in regions
with high disposable income and
adopt premium pricing.
Strategy 2
Develop strategic alliances and
partnerships with foreign
institutions to offer more
specialized training, care, and
biomedical equipment.
Strategy 3
Set up hospital branches in Central
Luzon and Calabarzon regions
with 300 beds or more.
Strategy 4
Open Makati Med-branded
Recommended Strategies
Category Strategy
Contribution to total
growth rate
2020 2021 2022
Product
Development
Strategy 1 3% 3% 3%
Strategy 2 1% 2% 2%
Market
Penetration
Strategy 3 - - -
Market
Development
Strategy 4 7% 10% 11%
Total annual growth rate 11% 15% 16%

• 2018: The Women’s Comprehensive Center was
established for dedicated women’s services
• Key differences:
-Non-hospital environment
-Focused target demographic
• Changing population trends could determine other
potential key populations (geriatrics, adult males,
pediatrics, LGBTIQ+)
• Benefits of off-site centers:
-Caters to specific needs
-Offers the ultimate convenience for busy patients
Replicate niche, off-site
centers in its present
market and in regions
with high disposable
income and adopt
premium pricing.
Develop strategic alliances
and partnerships with foreign
Set up hospital branches in
1

• Strategic Hospital Alliance Program (SHAP) extends
MMC services to the rest of the country
-Over 100 partners in 2018
-Accounted for nearly 47% of hospital-wide revenue
• Joining the Mayo Care Clinic Network
-Largest not-for-profit, academic health systems
serving more than 1.5 million patients across the US
and over 140 countries
• Benefits of membership:
-Telemedicine (eConsults, AskMayoExpert)
-Business Advice (Healthcare Consulting)
-Multidisciplinary Panel (eTumor Board conferences)
Develop strategic
alliances and partnerships
with foreign institutions
to offer more specialized
training, care, and
2
centers in its present market
and in regions with high
disposable income and adopt
premium pricing.

• Both are areas with high potential:
-2018 GDP per capita of PHP100,000 and above
-Calabarzon: forecasted CAGR of 1.7% between
2020 and 2025
-Highest estimated populations by 2025
• A growing population will add strain to an already
existing shortage of hospitals
-Population is forecasted to grow from 105 million
in 2018 to 142 million by 2045
-Current doctor ratio is 1:33,000 (global average
1:6,600)
• Currently not recommended due to the large costs
and heavy competition associated
premium pricing.
Set up hospital
branches in Central
Luzon and Calabarzon
3

• Investing outside hospital walls to “follow the
patient”
-Large players are investing heavily in regional and
satellite clinics to match the strong demand for
outpatient services
-Patients increasingly want cheaper and more
convenient care
• Key factors of outpatient clinics:
-Typically generate lower revenue but provide higher
profit and require less capital to build and run
-Technology improvements will shift more
procedures to outpatient basis
-The firm can determine how to most efficiently
distribute its resources between facility types
premium pricing.
Open Makati Med-
branded regional and
satellite clinics.
4

Jan NovOctFeb Mar Apr May Jun Jul Aug Sep Dec
Draft a CAPEX plan for
proposed centers, with
feasible number of sites
for first round.
Strategy 1: Replicate niche, off-site centers in its present market and in regions
with high disposable income, and adopt premium pricing.
Seek out, negotiate, and formalize agreements
with new investors and MMC.
Secure borrowings from the bank.
Formalize rental
agreements.
Identify suitable
locations for clinics.
Determine personnel
requirements.
Identify competitor
offerings.
Conduct research and feasibility assessment
with formal market research.
Finance construction
of off-site centers.
Purchase equipment.
Provide assessment of strategy effectiveness, computation of ROI, and timely updates on budget.
Identify and recruit
physicians in key
specialties, along with allied
health professionals.
Establish training programs.
Form Construction Committee
and commence construction once
all equipment and requirements
are complete.
Formulate strategic marketing
campaign that includes launch
activities and service pricing.
Assign clinic
spaces.
Finalize doctors’ schedules
and division of tasks and
responsibilities.
Launch fully operational
off-site clinics.
Ensure proper implementation and operational efficiency.
Conduct continuing post-launch
promotional events and sales activities.
Conduct post-launch assessment.
Jan2020
Finance – Operations – Marketing

Jan NovOctFeb Mar Apr May Jun Jul Aug Sep Dec
Seek out and negotiate
new partnerships with
institutions or companies.
Strategy 2: Develop strategic alliances and partnerships with foreign institutions
to offer more specialized training, care, and biomedical equipment.
Formalize agreements
between MMC and institutions.
Ensure proper funding for activities and timely updates on budget (cost management).
Negotiate partnership arrangements
with foreign institutions.
Develop new product offerings to
address specific needs of target
market.Conduct research and feasibility assessment
with formal market research.
Brainstorm target demographic.
Formulate strategic marketing
campaign that includes launch
activities.
Launch
partnerships.
Conduct continuing post-launch
promotional events and sales activities.
Conduct post-launch assessment.
Jan2020
Finance – Operations – Marketing
Provide assessment on effectiveness of strategies and computation of ROI.
Determine staffing requirements.
Establish training
programs.
Develop network referral systems.

Strategy 3: Set up hospital branches in Central Luzon and Calabarzon region with
300 beds or more.
Strategy 4:
Open Makati Med-branded regional and satellite clinics.
▪ Currently not recommended
▪ Will have departmental action plans similar to Strategy 1

Financial
Projections
NARRATIVE ON ASSUMPTIONS
YEAR 3
Clinics are fully operational by Q1
Desired growth rate is achieved by Q4
YEAR 2
Construction of clinics begins in Q2
Strategic alliances and partnerships
launch in Q3
Opening of clinics targeted for Q3
YEAR 1
Growth will remain slow until the end of
2019 (prior to implementation of
strategies)
LOW 10%
MEDIUM 15%
HIGH 16%
13.38%
Future assumed
4-year CAGR
(2019-2022)
There is an expected increase in
operating expenses from:
• Addition of approximately 20 personnel per proposed
clinic (by end of Year 2)
• Operating expenses of proposed clinics (by end of Year 2)
• A 30% increase in advertising expenses
• Training of hospital staff (i.e. continuing education
courses)
Threats that could slow down
revenue growth and reduce market
share:
• Inability to adequately staff new clinics due to increased
competition for medical professionals
• The opening of rival off-site and satellite clinics by
conglomerates and real estate developers
• Implementation of the Universal Health Care Law will
have increased investment in public healthcare (2020
onwards)

Financial
Projections
Income and
Expenses
Financial
Position
Cash Flow
Expected growth due to macro-environmental forces and the firm’s
intensive expansion strategies (robust clinic network, new product
development). The trend yields an assumed 4-year CAGR of nearly
14%.
Gross revenues
Decreasing trend due to the firm’s minimizing of discounts offered in
order to retain larger profits.
Discounts and free services
Due to increase in manpower, opening of additional clinics, and
depreciation of new equipment. Cost of sales will represent 55% of
total gross revenues by 2022, down from 57% in 2018 as a result of
effective cost management.
Cost of services
Due to increase in back office expenses (finance, HR, general
management, utilities) and volume of operations. Administrative
expenses as a percentage of gross revenues will show a decreasing
trend (from 23.5% in 2019 to 22.5% in 2022) as the firm becomes
more efficient.
Administrative expenses
There will be no change in other income. A 20% increase in interest
(income) expenses is likely due to debt financing arrangements.
There is an income tax expense of 30%.
Others
2020 2022
10.50% 9.70%
2020 2022
10% 15%
+11%
+15%
+16%
2020 2021 2022
Year on year growth trends
2020 2022
9% 14%

Financial
Projections
Financial
Position
Will decrease from 2019 to 2020 owing to the financing of clinics;
from 2020 onwards there will be a steady increase after completion
of expansion.
Cash and cash
equivalents
A 40 days average collection period (up slightly from 39 days) will
result in an increase from 12 to 16% (2020 to 2022) in net receivables.
Receivables,
net
An increase of 11 to 15% (2020 to 2022) is mainly related to the
increasing needs of the new clinics opening by end of 2020. The
average inventory period will be 30 days.
Inventories,
net
There will be a decrease of 10% as the firm will focus on cash items
during its expansion rather than those which cannot be converted to
cash.
Prepayments
and other
current assets
Will see an increase of 25%, 10%, and 10% (2020, 2021, and 2022,
respectively). This is related to the total acquisition of PHP 2.8B
(2020), PHP 1.8B (2021), and PHP 2B (2022) for the opening of new
clinics to improve product development and market development.
Property and
equipment
- A 5% decrease in other non-current assets due to the firm’s focus
on cash items.
- Trade and other payables maintained, with current suppliers
having 75 days payable.
- Income tax is assumed to be evenly incurred during the year.
- A total of PHP 2.15B in borrowings will be made in the next 3 years
to finance brand expansion.
- Retirement benefit obligation will increase by 5% based on annual
salary growth of employees.
Others

Financial
Projections
Cash Flow
Cash Inflows
Cash outflows will see a large increase in 2020 due to
payments for property and equipment needed to establish
the new clinics.
Cash Outflows
The firm is expected to show an increasing ending cash
balance from 2020 to 2022, as the effects of all the
implemented strategies and recommendations manifest.
Cash Balance
The bulk of cash inflows will initially come from the release of
bank borrowings, with a growing amount coming from
hospital revenues by the end of 2020 as the off-site and
satellite clinics become fully operational.
Bank Borrowings
2020 PHP 1.05 billion
2021 PHP 550 million
2022 PHP 550 million

Financial
Projections
HISTORICAL (2016-2018) AND PROJECTED STATEMENTS OF INCOME
In PHP, thousands 2016 (Actual) 2017 (Actual) 2018 (Actual)
2019
(Projected)
2020
(Projected)
2021
(Projected)
2022
(Projected)
Gross revenues 5,906,167.00 6,375,792.00 7,076,833.00 7,807,242.59 8,628,087.40 9,919,936.65 11,514,856.34
Less: Discounts and free services 608,413.00 629,500.00 742,699.00 823,664.09 905,949.18 991,993.67 1,116,941.06
Net revenues 5,297,754.00 5,746,292.00 6,334,134.00 6,983,578.50 7,722,138.22 8,927,942.99 10,397,915.27
Less: Cost of services 3,391,634.00 3,619,950.00 3,983,756.00 4,372,055.85 4,810,158.73 5,505,564.84 6,333,170.98
Gross profit 1,906,120.00 2,126,342.00 2,350,378.00 2,611,522.65 2,911,979.50 3,422,378.14 4,064,744.29
Less: Administrative expenses 1,430,923.00 1,570,238.00 1,611,152.00 1,834,702.01 2,001,716.28 2,281,585.43 2,590,842.68
Other income, net 85,452.00 108,354.00 100,747.00 100,747.00 100,747.00 100,747.00 100,747.00
Profit from operations 560,649.00 664,458.00 839,973.00 877,567.64 1,011,010.22 1,241,539.71 1,574,648.61
Less: Interest (income) expense 64,010.00 61,445.00 47,009.00 39,957.65 47,949.18 57,539.02 69,046.82
Profit before income tax 496,639.00 603,013.00 792,964.00 837,609.99 963,061.04 1,184,000.70 1,505,601.79
Less: Income tax expense 155,236.00 183,300.00 244,572.00 251,283.00 288,918.31 355,200.21 451,680.54
Profit for the year 341,403.00 419,713.00 548,392.00 586,326.99 674,142.73 828,800.49 1,053,921.25

Financial
Projections Projected Profit and Loss
Revenue CAGR
Historical CAGR: 9%
14%
Net Profit CAGR
Historical CAGR: 27%
22%
FY 2019 – PHP 6.98 B
FY 2020 – PHP 7.72 B
FY 2021 – PHP 8.92 B
FY 2022 – PHP 10.40 B
FY 2019 – PHP 877 M
FY 2020 – PHP 1.01 B
FY 2021 – PHP 1.24 B
FY 2022 – PHP 1.57 B
FY 2019 – PHP 586 M
FY 2020 – PHP 674 M
FY 2021 – PHP 829 M
FY 2022 – PHP 1.05 B
COS CAGR
Historical CAGR: 8%
13%
2019 2020 2021 2022
Cost of Services
Year on Year Growth
2019 2020 2021 2022
Net Revenues
Year on Year Growth
FY 2019 – PHP 4.37 B
FY 2020 – PHP 4.81 B
FY 2021 – PHP 5.51 B
FY 2022 – PHP 6.33 B
Operating Profit
CAGR
Historical CAGR: 22%
22%
2019 2020 2021 2022
Operating Profit
Year on Year Growth
2019 2020 2021 2022
Net Profit
Year on Year Growth

Financial
Projections
HISTORICAL (2016-2018) AND PROJECTED STATEMENTS OF FINANCIAL POSITION
ASSETS (in PHP, thousands) 2016 (Actual) 2017 (Actual) 2018 (Actual)
2019
(Projected)
2020
(Projected)
2021
(Projected)
2022
(Projected)
Current assets
Cash and cash equivalents 707,970.00 553,957.00 546,361.00 941,894.44 409,341.00 505,280.61 674,351.30
Receivables, net 574,912.00 689,362.00 766,081.00 855,588.23 945,543.82 1,087,116.35 1,261,902.06
Inventories, net 250,760.00 259,754.00 318,409.00 359,347.06 395,355.51 452,512.18 520,534.60
Prepayments and other current
assets 54,907.00 67,638.00 49,706.00 44,735.40 40,261.86 36,235.67 32,612.11
Total current assets 1,588,549.00 1,570,711.00 1,680,557.00 2,201,565.12 1,790,502.20 2,081,144.81 2,489,400.07
Non-current assets
Property and equipment, net 7,909,781.00 8,159,946.00 8,200,319.00 8,446,328.57 10,557,910.71 11,613,701.78 12,775,071.96
Investment in a subsidiary 1,800.00 1,800.00 835.00 835.00 835.00 835.00 835.00
Other non-current assets 131,693.00 131,693.00 130,741.00 124,203.95 117,993.75 112,094.06 106,489.36
Total non-current assets 8,043,274.00 8,293,439.00 8,331,895.00 8,571,367.52 10,676,739.47 11,726,630.85 12,882,396.32
TOTAL ASSETS 9,631,823.00 9,864,150.00 10,012,452.00 10,772,932.64 12,467,241.67 13,807,775.65 15,371,796.39

Financial
Projections
LIABILITIES AND EQUITY (in PHP,
thousands) 2016 (Actual) 2017 (Actual) 2018 (Actual)
2019
(Projected)
2020
(Projected)
2021
(Projected)
2022
(Projected)
Liabilities
Current liabilities
Trade and other payables 892,187.00 1,006,429.00 1,002,701.00 1,275,361.20 1,399,700.34 1,600,099.37 1,833,701.44
Income tax payable 53,508.00 58,771.00 69,412.00 62,820.75 72,229.58 88,800.05 112,920.13
Borrowings, current portion 214,000.00 229,000.00 274,000.00 274,000.00 324,000.00 374,000.00 424,000.00
Dividends payable 81,143.00 93,812.00 119,169.00 100,000.00 200,000.00 250,000.00 300,000.00
Other current liabilities 11,685.00 11,874.00 12,038.00 11,436.10 10,864.30 10,321.08 9,805.03
Total current liabilities 1,252,523.00 1,399,886.00 1,477,320.00 1,723,618.05 2,006,794.22 2,323,220.50 2,680,426.60
Non-current liabilities
Borrowings, net of current portion 1,017,500.00 788,500.00 514,500.00 514,500.00 1,514,500.00 2,014,500.00 2,514,500.00
Provision 102,630.00 117,421.00 100,961.00 100,961.00 100,961.00 100,961.00 100,961.00
Retirement benefit obligation 106,260.00 147,012.00 256,012.00 268,812.60 282,253.23 296,365.89 311,184.19
Deferred income tax liabilities, net 919,366.00 891,461.00 849,450.00 764,505.00 688,054.50 619,249.05 557,324.15
Total non-current liabilities 2,145,756.00 1,944,394.00 1,720,923.00 1,648,778.60 2,585,768.73 3,031,075.94 3,483,969.33
TOTAL LIABILITIES 3,398,279.00 3,344,280.00 3,198,243.00 3,372,396.65 4,592,562.95 5,354,296.44 6,164,395.93

Financial
Projections
Equity 2016 (Actual) 2017 (Actual) 2018 (Actual)
2019
(Projected)
2020
(Projected)
2021
(Projected)
2022
(Projected)
Share capital 335,535.00 338,462.00 339,737.00 339,737.00 339,737.00 339,737.00 339,737.00
Capital in excess of par value 1,571,963.00 1,616,896.00 1,639,701.00 1,639,701.00 1,639,701.00 1,639,701.00 1,639,701.00
Treasury shares -15,036.00 -15,036.00 -15,036.00 -15,036.00 -15,036.00 -15,036.00 -15,036.00
Revaluation surplus 2,358,885.00 2,349,618.00 2,340,351.00 2,340,351.00 2,340,351.00 2,340,351.00 2,340,351.00
Remeasurements on retirement benefits 86,058.00 62,855.00 -16,060.00 -16,060.00 -16,060.00 -16,060.00 -16,060.00
Retained earnings 1,896,139.00 2,167,075.00 2,525,516.00 3,111,842.99 3,585,985.72 4,164,786.21 4,918,707.46
Total equity 6,233,544.00 6,519,870.00 6,814,209.00 7,400,535.99 7,874,678.72 8,453,479.21 9,207,400.46
TOTAL LIABILITIES AND EQUITY 9,631,823.00 9,864,150.00 10,012,452.00 10,772,932.64 12,467,241.67 13,807,775.65 15,371,796.39

Financial
Projections
Current Assets: 4% CAGR
Total Assets: 13% CAGR
Current Liabilities: 16% CAGR
Total Liabilities: 22% CAGR
Projected Assets and Liabilities
2019 2020 2021 2022
Current
Assets
Year on
Year
Growth
Historical CAGR: 3%
Historical CAGR: 2%
Historical CAGR: 9%
Historical CAGR: -3%
FY 2019 – PHP 2.20 B
FY 2020 – PHP 1.79 B
FY 2021 – PHP 2.08 B
FY 2022 – PHP 2.49 B
FY 2019 – PHP 10.8 B
FY 2020 – PHP 12.5 B
FY 2021 – PHP 13.8 B
FY 2020 – PHP 15.4 B
2019 2020 2021 2022
Current
Liabilities
Year on
Year
Growth
FY 2019 – PHP 1.72 B
FY 2020 – PHP 2.01 B
FY 2021 – PHP 2.32 B
FY 2022 – PHP 2.68 B
2019 2020 2021 2022
Total
Liabilities
Year on
Year
Growth
FY 2019 – PHP 3.37 B
FY 2020 – PHP 4.59 B
FY 2021 – PHP 5.35 B
FY 2022 – PHP 6.16 B
2019 2020 2021 2022
Total
Assets
Year on
Year
Growth

Financial
Projections
HISTORICAL (2016-2018) AND PROJECTED STATEMENTS OF CASH FLOWS
2019
(Projected)
2020
(Projected)
2021
(Projected)
2022
(Projected)
Cash flows from operating activities
Profit before income tax 496,639.00 603,013.00 792,964.00 837,609.99 963,061.04 1,184,000.70 1,505,601.79
Add (deduct) adjustments for:
Provisions/write-offs/impairments 83,351.00 91,469.00 115,790.00 115,790.00 115,790.00 115,790.00 115,790.00
Depreciation and amortization 470,087.00 490,444.00 520,485.00 536,099.55 670,124.44 737,136.88 810,850.57
Interest expense 64,010.00 61,445.00 47,009.00 39,957.65 47,949.18 57,539.02 69,046.82
Retirement benefit expense 47,140.00 34,605.00 39,341.00 41,308.05 43,373.45 45,542.13 47,819.23
Reversal of long outstanding payables 0.00 -7,275.00 0.00
Loss (gain) on disposal of property and equipment -330.00 4,395.00 500.00
Loss (gain) on sale of investment property
Equity in net losses of JVs
Interest income -3,543.00 -2,342.00 -6,274.00 -6,274.00 -6,274.00 -6,274.00 -6,274.00
Dividend income -4,200.00 0.00 0.00 - - - -
Unrealized foreign exchange (gain) loss -4,568.00 340.00 -1,211.00 -1,211.00 - - -
Operating income before working capital
charges
1,148,586.00 1,276,094.00 1,508,604.00 1,563,280.24 1,834,024.11 2,133,734.72 2,542,834.41

Financial
Projections
2019
(Projected)
2020
(Projected)
2021
(Projected)
2022
(Projected)
Operating income before working capital charges 1,148,586.00 1,276,094.00 1,508,604.00 1,563,280.24 1,834,024.11 2,133,734.72 2,542,834.41
Add (deduct): Decrease (increase) in current assets
Receivables -40,785.00 -206,755.00 -188,302.00 -89,507.23 -89,955.60 -141,572.52 -174,785.72
Inventories -30,881.00 -8,287.00 -61,310.00 -40,938.06 -36,008.46 -57,156.67 -68,022.42
Prepayments and other current assets 16,932.00 19,896.00 27,645.00 27,645.00 1,027,645.00 4,026.19 3,623.57
Add (deduct): Increase (decrease) in current liabilities
Trade and other payables 66,532.00 23,868.00 66,057.00 272,660.20 124,339.14 200,399.03 233,602.07
Other current liabilities -364.00 189.00 164.00 -601.90 -571.81 -543.21 -516.05
Add (deduct): (Increase) decrease in other non-current
assets -87,540.00 0.00 952.00 6,537.05 6,210.20 5,899.69 5,604.70
Add (deduct): Increase (decrease) in other non-current
liabilities -8,879.00 11,979.00 -16,460.00 -16,460.00 -16,460.00 -16,460.00 -16,460.00
Cash from operations 1,063,601.00 1,116,984.00 1,337,350.00 1,722,615.31 2,849,222.59 2,128,327.22 2,525,880.55
Interest received 3,536.00 2,472.00 5,687.00 -6,274.00 -6,274.00 -6,274.00 -6,274.00
Contributions to retirement fund -20,000.00 -27,000.00 -35,629.00 -37,410.45 -39,280.97 -41,245.02 -43,307.27
Benefits paid from book reserve -7,448.00 - - - -
Income taxes paid -148,809.00 -192,026.00 -238,150.00 -382,119.30 -1,504,514.47 -541,940.64 -635,007.84
Net cash from operating activities 898,328.00 900,430.00 1,061,810.00 1,296,811.56 1,299,153.15 1,538,867.56 1,841,291.44

Financial
Projections
2016 (Actual) 2017 (Actual) 2018 (Actual)
2019
(Projected)
2020
(Projected)
2021
(Projected)
2022
(Projected)
Cash flows from investing activities
Investments in subsidiaries
Payments for property and equipment -674,249.00 -656,454.00 -629,803.00 -782,109.12 -2,781,706.58 -1,792,927.95 -1,972,220.75
Downpayments paid in advance to suppliers for
equipment -23,113.00 -32,627.00 -9,713.00
Proceeds from disposal of property and equipment 631.00 9,163.00 1,135.00
Dividends received 4,200.00
Net cash used in investing activities -692,531.00 -679,918.00 -638,381.00 -782,109.12 -2,781,706.58 -1,792,927.95 -1,972,220.75

Financial
Projections
2016 (Actual) 2017 (Actual) 2018 (Actual)
2019
(Projected)
2020
(Projected)
2021
(Projected)
2022
(Projected)
Cash flows from financing activities
Payment of borrowings -149,000.00 -214,000.00 -229,000.00
Proceeds from borrowings 300,000.00 - 1,050,000.00 550,000.00 550,000.00
Interest paid -59,492.00 -60,427.00 -48,931.00
Dividends paid -122,409.00 -149,347.00 -177,833.00 -119,169.00 -100,000.00 -200,000.00 -250,000.00
Proceeds from issuance of common shares 30,514.00 47,860.00 24,080.00
Net cash used in financing activities -387.00 -375,914.00 -431,684.00 -119,169.00 950,000.00 350,000.00 300,000.00
Net cash flow 205,410.00 -155,402.00 -8,255.00 395,533.44 -532,553.43 95,939.60 169,070.69
Add: Cash and cash equivalents, beginning 502,091.00 707,970.00 553,957.00 546,361.00 941,894.44 409,341.00 505,280.61
Effect of exchange rate changes on cash and cash
equivalents 469.00 1,389.00 659.00
Cash and cash equivalents, ending 707,970.00 553,957.00 546,361.00 941,894.44 409,341.00 505,280.61 674,351.30

Monitoring
and Control

Balanced Scorecard Strategy Map
VISION: To be the Philippines’ undisputed leading
academic medical center by 2020 and competitive with
the best in the world by 2024.
Financial
Customer
Internal
Process
Learning &
Growth
Achieve a 4 year average
revenue growth between 12
to 14% CAGR by 2022
Generate PHP 11.5B in gross
revenues by 2022
Generate PHP 1.57B in net
operating profit by 2022
Generate PHP 1.05B in net
profit by 2022
High-quality, convenient, and
compassionate patient-
centered care
Provide state-of-the-art
technology and treatment for
patients
Increase market share to 41%
Build MMC’s brand as an
academic institution at the
forefront of research
Improve and expand access
to care across wider
geographic regions
Initiate Kaizen activities to
gain greater efficiencies and
improved service delivery
Collaborate effectively with
community stakeholders to
improve partnerships
Develop clinical standards
and disseminate tools and
best practices
Strengthen consultant roster
by increasing number of
specialists and subspecialists
Leverage information
technology for improved
decision-making
Improve employee morale and
satisfaction through support
and career opportunities
Develop a competent
workforce skilled in leadership,
management, and finance

Objectives Increase sales and profitability
KPI’s Revenue Operating income Net profit
Targets
PHP 11.5B in gross
revenues
PHP 1.57B in net
operating profits
PHP 1.05B in net profit
Initiatives
- Hospital network expansion
- Increase product offerings through strategic partnerships
Financial Perspective
Balanced Scorecard Perspective

Objectives Increase market share Expand product offerings
KPI’s Number of customers Number of product launches
Targets 41% market share
At least 3-5 new product launches
per year
Initiatives
- Promote high-quality medical care
- Increase number of corporate accounts
- Intensify multi-channel messaging
- Strengthen network referral system
- Customer profiling to determine
market needs
- Strengthen foreign partnerships
- Invest in technology
Customer Perspective

Objectives Expand market reach
Increased efficiency of
business processes
Improved referral
network
Improved research
development
KPI’s
Number of new clinics
opened
Fully integrated and
implemented HIS
Number of partnered
facilities
Number of research
publications and
partnerships
Targets
≥3 new clinics opened per
year
100% usage
≥3 memberships to
foreign healthcare
networks
≥3 research publications
per year in every
department
Initiatives
- Establish off-site clinics
- Design unique offerings
for target populations
- Recruit key specialists
- Initiate Kaizen activities for
TQM
- Reassess redundant
applications
- Data analytics to
understand patient
behavior
- Assure financial
viability and
sustainability
- Improve brand
attractiveness and
awareness
- Widen partnerships
with academic
institutions
- Support more
academic initiatives
Internal Processes

Objectives Expand roster of active consultants
Develop leadership, management,
and financial competence
Provide continuing professional
education (CPE)
KPI’s Number of affiliated physicians Number of training sessions
Number of employees completing CPE
training
Targets
1,600 physicians practicing across
≥150 specialties and
subspecialties
90% of all top- and middle-
managers completing all training
sessions/year
85% of all medical and allied health
professional staff completing ≥1 CPE
training/year
Initiatives
- Recruit key specialists through
special clinical privileges,
employment, and payment
- Develop a robust training
program
- Implement leadership,
management, and financial
skills training
- Offer incentives and rewards
- Partner with training
institutions
- Implement in-house CPE training
opportunities
- Provide protected time for
employees to pursue training
- Offer incentives and rewards
Learning & Growth

Balanced Scorecard Performance DashboardFinancialCustomer
InternalProcessesLearning&Growth
Objectives Target Current
Expand roster of active
consultants
1600 physicians
705
physicians
Develop leadership,
management, and
financial competence
≥90% attendance of
training sessions
93%
attendance
Provide continuing
professional education
85% completion of
≥1 CPE training/year
Not
disclosed
How we maintain our learning and growth strategies
Expand market reach 3 clinics/year None
business processes
100% integration/
implementation of HIS
85%
Improved referral
network
3 foreign memberships Local only
Improved research
development
3 research
publications/dept/year
Not
disclosed
Initiatives and strategies designed to increase internal performance
Increase market share 41% 35.4%
Expand product
offerings
5 product
launches/year
Not disclosed
How we increase success and maintain our strategies
Increase revenue PHP 11.5 B PHP 7.08 B
Increase net profit PHP 1.05 B PHP 548 M
Increase operating
margin
PHP 1.57 B PHP 840 M
How we maintain our learning and growth strategies
Vision,
Goals, and
Strategies

Balanced Scorecard Performance Dashboard
Objectives Target KPI Responsible Parties When
Increase revenue PHP 11.5 billion
PHP 11.5B or more
PHP 6 B to 11.4 B
Less than PHP 6 B
Finance
Business Development
Marketing
Q4 2022
Increase net profit PHP 1.05 billion
PHP 1.05 B or more
PHP 600 M to PHP 1.04 billion
Less than PHP 6 M
Finance
Marketing
Q4 2022
Increase operating
margin
PHP 1.57 billion
PHP 1.57 B or more
PHP 700 M to PHP 1.56 B
Less than PHP 700 M
Finance
Marketing
Q4 2022
Financial
High Level Medium Level Low Level

Increase market share
41% market
share
41% or higher
35% to 40%
35% or lower
Marketing
Finance
Q4 2022
Expand product
offering
5 product
launches per
year
5 or more launches
3-4 launches
Less than 3 launches
Marketing
Yearly
Customer

Expand market reach
3 clinic openings per
year
Average of ≥3 clinic openings
Average of 1-2 clinic openings
Less than 1 clinic opening/year
Finance
Operations
Marketing
Yearly
business processes
100% integration
and implementation
of HIS
100%
95-99%
Below 95%
IT
Human Resources
Q2 2020
Improved referral
network
3 memberships to
foreign healthcare
networks
3 or more memberships
1-2 memberships
0 memberships
Marketing
Q4 2022
Improved research
development
3 research
publications per
department per year
3 or more publications
1-2 publications
0 publications
Medical Services
Department
Yearly
Internal Processes

Expand roster of
active consultants
1,600 actively practicing
affiliated physicians
1,600 or more physicians
1,200-1,599 physicians
Less than 1,200 physicians
Human Resources
Marketing
Q4 2022
Develop leadership,
management, and
financial competence
90% of all top- and
middle-managers
completing all training
sessions per year
90% or more
80-90%
Below 80%
Human Resources
Marketing
Finance
Yearly
Provide continuing
professional
education (CPE)
85% of all medical and
allied health professional
staff completing at least 1
CPE training per year
85% or more
75%-84%
Below 75%
Human Resources
Finance
Yearly
Learning & Growth

Contingency
PlansArianna S. Abundo, 2020

Downside Factors
Economic slump
• Implement cost management measures
• Reassess existing services
• Implement renovation and expansion projects in a staggered manner
• Intensify marketing and sales efforts
Market saturation (earlier than expected)
• Consider redirecting clinic launches to areas with more rapid market growth
• Reinforce referral networks with lower-level hospitals
New industry entrants
• More aggressive strategic marketing and sales campaigns
• Focused strategic plans to define competitive advantage

Upside Factors
Greater than expected foreign interest
• Establish partnerships with foreign institutions
• More aggressive strategic planning
Lower interest rates
• Restructure current and proposed loans
• More aggressive plans to launch off-site and satellite clinics
Stronger economic growth
• Intensify efforts to attract local and foreign investors for capital infusion
• More aggressive strategic marketing and sales campaigns

THANK YOU
Presented by Arianna S. Abundo

Strategic management paper on a tertiary level hospital

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