Narayana is a perfect case study that represents the concept of "Reverse Innovation" in emerging markets. Narayana Health Group is one of the leading multi-specialty hospital chains in India, focusing not only on one particular section of the society but making treatment affordable for those living in the remotest areas in India. Their vision propelled them to adopt the strategy of quality, affordability, sustainability, and economies of scale to structure their organizational capabilities around it. They have caused a disruption in the healthcare sector.

1. Course: Strategy and Leadership Course Code: MT5131
Professor: Brian Leavy

2. HELLO! ☻
2
Agransh
Anand
Maram
Aldawood
Yihui
Lu
Chris
Clancy
Maleeha
Ahsen
Sean
Campbell

3. Narayana Health Group
Introduction

4. India’s Healthcare Industry
4
20 $ x4
India’s healthcare
industry is estimated
to be at around $20
billion
A population that is
four times the size of
the USA
1%
India’s government
spending on
healthcare as a
proportion of GDP

5. 5
(Harvard Business Review, 2013)

6. 6
Their Focus?
Quality Affordability Sustainability

7. 1. How did Narayana deliver
world class services
With the lowest possible costs?

8. 8
Economies of Scale
Fixed Salary Model
Division of Labour
Cross-Subsidized Pricing Model
Best Practices

9. 9
Economies of Scale1
(Corporate Finance Institute)

10. 10
Fixed Salary Model2
NH pays its doctors a fixed monthly salary. This approach decreases hospital costs
per procedure as the number of procedures increases.

11. 11
Division of Labour3
Stage 1 Stage 2 Stage 3

12. 12
Cross-Subsidized Pricing Model4
NH has an international-outreach programme for medical tourism which
attracts full-paying patients from across 76 countries.

13. Operation
Management
Safety
Practices
Low-cost
approach
13
Best Practices5

14. 14
Can you think of any
CHALLENGES?

15. 2. Main Strategic
Challenges while expanding
Advise how to best address them?

16. 16
Ret Employee Retention1
Stiff Competition in Bigger Cities2
Lack of Brand Awareness3
Government Insurance Scheme and
Regulatory practices4

17. Employee Retention
17
Suggestion
Explore the option of including a variable component in the
employees salary.

18. Stiff Competition in Bigger Cities
18
Suggestion
Partnerships Joint Ventures Acquisitions

19. Lack of Brand Awareness
19
Suggestion

20. Government Insurance Scheme and
Regulatory Practices
20
Suggestion
Get all of their hospitals empanelled

21. 3. What policy makers from
advanced economies
Can learn from Narayana

22. Become more Efficient
22
High volume
of surgeries
Use of
Economies of
Scale
Commercial
approach to
purchasing
equipment
1 2 3

23. Partnerships
To provide affordable
post op care e.g.
Stanford
Digitised
Document
“The Narayana
Healthcare Way”
Operation
Breakdown
Top Surgeons have
more time
Process Improvement, Standardisation & Post Op
Care
23

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WHAT IS THE MOST EXPENSIVE
INSTRUMENT IN A HOSPITAL?

25. “ “The doctors pen is
the most expensive
instrument in any
hospital”
- Dr. Shetty
25

26. Concentration
Track the Financial Daily
26
In their daily
accounting system
On the necessity of the
previous day’s
expenditure
Innovation

27. Hospital Construction
27
SPEED
NH’s ’s Mysore Hospital
was 150,000 sq. ft and
cost $6m dollars to build,
25% of the expected cost
in India.It was completed
in 8 months compared to
the usual 3 years in India.
LOCATION
NH’s business model
relies partly on volume of
patients. Building
hospitals close to large
populations allows them
to benefit from
economies of scale.
DESIGN
The design of NH’s
Mysore Hospital was
compact, with reduced
open spaces, and used
prefabricated structures
to save costs.

28. 28
THANKS!Any Questions?