1. Aravind Eye Care System – The McDonald’s of Indian origin?
By: Shreya Juneja
“Believe it or not, our founder got his inspiration from McDonald’s, the fast-food chain.
McDonald’s is very good at producing and delivering its products in the same way all over the
world. It has been able to standardize food delivery using high-volume methods. A similar idea is
at the core of Aravind’s management philosophy; we use it in our hospitals and other facilities
(our eye camps and vision centers)”
- Dr.A.Srinivasan, Director of Projects, Aravind Eye Care System1
“His is a case of McDonald-isation of surgery delivering standard quality at lower costs.
They’ve learnt from the bad guys to do well”
- Harish Bijoor, Brand consultant2
Aravind Eye Care System: The Business Model
The Aravind Eye Care System in Madurai, India, is the largest provider of ophthalmological
services in the world. Although it performs almost 350,000 eye operations a year — 60 percent
of them delivered at low or no cost — the quality of care it offers is excellent. Its surgical
complication rate, for example, is lower than many Western hospitals achieve.1
Foundation: Dr. Venkataswamy, in 1976, established the GOVEL Trust under which Aravind
Eye Hospitals were founded. The GOVEL Trust was created as a non-profit trust, with Dr V as
Chairman and his two brothers, two sisters and their spouses and an ex officio member, the
Madurai Main Rotary President as trust members. Dr V started with a modest 11-bed hospital. In
1
http://www.aravind.org/Downloads/draravindinterview.pdf
2
http://www.aravind.org/downloads/InfiniteVisionTIMES.pdf

2. this hospital six beds were reserved for people who could not afford to pay while the remaining
five were for paying patients. Initially, Dr V attempted to raise funds and planned to start
Aravind as a free-for-all hospital catering to the poorest section of the society, who could not
afford to pay for eye surgeries. After he was unsuccessful in his efforts, he decided to start with
the Hybrid model.3
Aravind’s Vision: To eliminate needless blindness by providing high quality, high volume,
compassionate eye care to all.4
Aravind’s Mission: To eradicate needless blindness by providing compassionate & high quality
eye care to all, rich and poor3
Branches: Theni, Tirunelveli, Coimbatore, Pondicherry, Dindigul and Tirupur
Plan to lower costs: Since about 80 percent of eye health care costs are fixed and the variable
cost component is only 20 percent, profits from ful paying patients were used to subsidize care
for others. To address fixed costs, the use of infrastructure and the productivity of staff,
especially surgeons was maximized. Variable costs were handled by setting up of Aurolabs.
In order to achieve its objectives, they have set up various organizations, within the ambit of the
system such as:
• Community outreach programs
• Education & Training
• Telemedicine
• Lions Aravind Institute of Community Ophthalmology
• Aurolab
• Aravind Medical research foundation
• Rotary Aravind International eye bank
Regular screening camps are organized where spectacles are dispensed on the spot. Also, they
came up with Aurolab to avoid importing lenses at exorbitantly high rates but rather bring down
their costs to as low as $2 per lens. Today, they share 7% of global market in IOLs, alone.
Current Challenges: Despite millions of recovered patients, one of Aravind’s biggest obstacles
to date is reaching nearly 70% of its patients in rural southern India. Many of the most need
based patients must walk miles and spare entire work days in order to visit an Aravind camp or
hospital. Mobile clinics have been launched, but they require local sponsors to host them and are
cumbersome to plan.5
3
http://en.wikipedia.org/wiki/Aravind_Eye_Hospital
4
http://www.cips.org.in/public-sector-systems-government-innovations/documents/aravind_eye_care_model.pdf
5
http://www.northeastern.edu/sei/2011/10/aravind-eye-care-system-case/

3. Rigorous performance management, highly standardized care delivery, extremely high staff
productivity, and a willingness to innovate in everything from how to source supplies to who can
deliver services, have made Aravind what it is.
McDonald’s Business Model
McDonald's has become emblematic of globalization, sometimes referred to as the
"McDonaldization" of society. McDonald’s is the leading global foodservice retailer with more
than 34,000 local restaurants serving approximately 69 million people in 118 countries each
day. More than 80% of McDonald’s restaurants worldwide are owned and operated by
independent local men and women.6
Goal: becoming customers’ favorite way and place to eat and drink by serving core favorites
such as the world famous French Fries, Big Mac, Quarter Pounder and Chicken McNuggets
Franchisees: 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, if not all cases, the franchisee does not own the
location of its restaurants.7
6
http://www.aboutmcdonalds.com/mcd/investors/company_profile.html
7
http://en.wikipedia.org/wiki/McDonald's

4. Figure 1: Business model of Mcd's is like a 3-legged stool
Strategies: The strength from franchisees and suppliers, enables McDonald’s to deliver
consistent, locally-relevant restaurant experiences to customers. In addition, it facilitates its
ability to identify, implement and scale innovative ideas that meet customers’ changing needs
and preferences.6
Figure 2: McDonald's plan to win provides a common framework for global business as well as local adaptation
Assembly line technique
An assembly line is a manufacturing process in which 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. By mechanically moving the parts to the assembly work and
McDonald's
Plan to Win
People
Place
PricePromotion
Products
Franchise
Suppliers
Employees

5. moving the semi-finished assembly from work station to work station, 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.8
In a similar way the fundamentals of assembly line theory have been applied to business
processes with success. These new methods of organizing work all share the common goal of
improving throughput by reducing the amount of time individual workers and their machines
spend on specific tasks. By reducing the amount of time required to produce an item, assembly
line methods have made it possible to produce more with less.9
Aravind eye care system also follows assembly line technique to cater to multiple patients
at a time. For instance, doctors sit between two operating tables; when they finish with one, they
just turn to the other patient who is already draped and ready. This way they are able to save
valuable time between surgeries. These measures have made surgeons extremely productive.
These measures have also pushed down the average cost of surgery. Such innovative techniques
are being followed by Aravind for quite some time and are much celebrated.
The Aravind-McDonald’s similarity
The founders of Aravind eye care system themselves claim that they sought inspiration from
Mcdonald’s. Listed are some linkages between business strategies between the two most popular
brands among Indian customers.
S.No. Aravind Eye Care McDonald’s
1. Aims at standardizing its services
among the rich and the poor
alike, to eliminate needless
blindness
Good at producing and delivering its products
in the same way all over the world. It has
been able to standardize food delivery using
high-volume methods.
2. Uses assembly line technique to
provide quick eye-care services at
lower prices
Offers on-the-go (fast) food at lower prices
3. Established Aurolabs to avoid
importing lenses and brought
their cost to $2.
Avoids out sourcing and self-owned
franchisee lands to lower down costs
4. Aims to reach out to the masses
through free camps, etc.
It is already a widely popular fast food brand
and aims to extend its popularity even further
Table 1: How Aravind eye care business model is similar to that of McDonald's
8
http://en.wikipedia.org/wiki/Assembly_line
9
http://www.inc.com/encyclopedia/assembly-line-methods.html