A case study on the Arvind eye care hospital and its comparision with business model of McDonalds.

1. Aravind Eye Hospital
Business Model – Aravind Eye Hospital
“Many people suffered blindness needlessly in our country because they did not even know
about a procedure as basic as a cataract operation,” shared Dr. Rani Geetha Priyadarshini,
Associate Professor (OB and HR) at the Amrita School of Business, Coimbatore.
The Model:
Fee for service: 35% of patient care
Free/Subsidized service: 65% of patient care
High Volume – High Quality eye care
Operational Model: McDonald’s (Strict attention to cost optimization)
Reduction of cost: Own production facility i.e Aurolab
The patient chooses where to get his/her care. The care provided is of the same quality but
the facilities provided are different based on the pricing.
Performance: Six to eight operations per hour on an assembly line basis with the support of
internally-trained mid-level ophthalmic personnel
Focus on a reduced portfolio of specialized services performed in large volume following a
quasi-assembly line process and can be considered a mass service or service factory

2. Source: http://www.cips.org.in/public-sector-systems-government innovations/documents/aravind_eye_care_model.pdf
Community Outreach:
20-30 screening camps/week
Community Participation
On the spot dispensing of spectacles
Free surgery, food & transportation
20%OP & 37% Cataract

3. Business Model - McDonald’s
The Franchise Model:
McDonald's Corporation earns revenue as an investor in properties, a franchiser of
restaurants, and an operator of restaurants.
Approximately 15% of McDonald's restaurants are owned and operated by McDonald's
Corporation directly.
The remainder is operated by others through a variety of franchise agreements and joint
ventures.
The McDonald's Corporation's business model is slightly different from that of most other
fast-food chains.
In addition to ordinary franchise fees and marketing fees, which are calculated as a
percentage of sales, McDonald's may also collect rent, which may also be calculated on the
basis of sales.
As a condition of many franchise agreements, which vary by contract, age, country, and
location, the Corporation may own or lease the properties on which McDonald's franchises
are located.
In most, the franchisee does not own the location of its restaurants.
As a matter of policy, McDonald's does not make direct sales of food or materials to
franchisees, instead organizing the supply of food and materials to restaurants through
approved third party logistics operators.
Target Segment and Positioning:
McDonald’s was positioned as a family restaurant
Extra care has been taken to make the environment children-friendly.
The chain targeted both adults and children.
Assembly Line Technique
Maximizing sales at existing outlets by increasing efficiency in the kitchen
This technique cranks up their speed, lowers costs and boosts profit.
Customer Satisfaction
Place the customer experience at the core
Provide meals at a low rate
The menu innovations (along with items developed in their test kitchen) have allowed for
McDonald's to hold product offerings for all meal times, and the snack periods that fall in
between, allowing for greater profitability.
But McDonald's takes great care not to effect the consumer experience when a new item is
introduced. As McDonald's CEO James Skinner said in a 2010 interview with CNBC,
“[McDonald's doesn't] put something on the menu until it can be produced at the speed of
McDonald's.”

4. Assembly Line Technique
An assembly line is a manufacturing process also called a progressive assembly in which parts
(usually interchangeable parts) are added as the semi-finished assembly moves from work station
to work station where the parts are added in sequence until the final assembly is produced.
In most cases, a manufacturing assembly line is a semi-automated system through which a product
moves. At each station along the line some part of the production process takes place. The workers
and machinery used to produce the item are stationary along the line and the product moves
through the cycle, from start to finish. Keeping the entire system running smoothly requires a great
deal of coordination between the parts of the system.
Assembly line methods were originally introduced to increase factory productivity and efficiency.
Advances in assembly line methods are made regularly as new and more efficient ways of
achieving the goal of increased throughput (the number of products produced in a given period of
time) are found.By following this method, a finished product can be assembled much faster and
with much less labor than by having workers carry parts to a stationary piece for assembly.
This technique was first used by Henry Ford to produce cars. Then, it was introduced to the food
industry by the McDonald brother’s and Aravind Eye Care Hospital is the first to implement this
technique into the medical field.

5. Creativity/Innovation in the Business Model
The business model of Aravind Eye Care Hospital which was inspired by the business model of
McDonald’s is very creative. They stepped out of the usual way of running hospitals and are the
first to use assembly line technique into the field of medical sciences.By using this technique
they have been able to reduce their operational cost and improve efficiency significantly. It is
innovative how the doctors here are able to perform 2 surgeries simultaneously. They have used
their technical knowledge for social benefit in a very commendable way. The surgeons are good,
but it is the system that ensures the high productivity.
Personal Views
Aravind initiated its community outreach programmes in response to
 problems of inaccessibility
 affordability issues, and
 under utilisation of eye care infrastructure
Through this approach, Aravind sought to make eye care services more accessible by the
community.
 Increased awareness
 Influencing health-seeking behaviour
 Creating access
 Community participation
Taking super-specialty care to villages
Stretching Scarce Resources
The lives of young women hired by the hospital have vastly improved
It provides transparency in fee structure and systems

6. References
1. Aravind Eye Health Care Operations, IE Business School
2. A Case Study on Aravind Eye Care Systems, School of Business, Coimbatore
3. http://www.cips.org.in/public-sector-systems-government-
innovations/documents/aravind_eye_care_model.pdf
4. http://www.slideshare.net/khushboo1904/mcdonalds