CASE STUDY:APOLLO HOSPITALS OF

INDIA

PRESENTED BY: SEBY AUGUSTINE(31) SAURABH NINAMA(23)

VINOD VASAVA(37) POOJA TANNA(35)

INDUSTRY ANALYSIS

About the Industry Health status varied Lag in availability of medical personnel &

facilitiesCountry Per 1,000,000 population

Doctor Nurse Hospital beds

India 407 214 1600

U.K 1615 7891 8000

U.S. 2380 3204 5900

Health care provided by State Government National Government

By 1995, existence of150 Corporate comprehensive hospitals

Estimation of 250 private hospitals by the year 2000

Out-of-pocket payment by patients Emerging middle class Upcoming markets Relaxation in policies

Porter’s 5-force model

Threat of New

Entrants

Threat of Substitute

s

Bargaining Power of Buyers

Bargaining power of Suppliers

Forces of competitio

n

Threat of Substitutes- limited No substitute for medical care A basic requirement

Threat of New Entrants- High High capital costs Long gestation periods (2 to 4 years) Industry- an attractive proposition due to

High growth potential of the sector Stimulation to private sector

An estimation of having approx 150 corporate hospitals by 1995 250 private hospitals by 2000

Competition - Intense Large number of players in the industry Govt. Hospitals – A strong competition High exit barriers (due to high capital

investment)

Bargaining power of suppliers- High Referral doctors served as a major source of

customer base.

Bargaining power of Buyers- Limited No substitute

About the Company Founded in 1983 by Dr. Pratap C. Reddy First Corporate hospital in India

Comprehensive For profit

Grew out of Dr. Reddy’s own practice Obstacles

Regulatory Financial

Combination of professional management structure and entrepreneurial approach

Management Philosophy Clear Vision High quality medical care “With a human face”

Had no models to emulate. Apollo hospital organized around 5 stars

Medical Personnel Medical Technology Employees Hospitality Value

Critical Success Factors (CSFs) CSF, sometimes referred as to strategic

factors are those which are crucial for organizational success.

When strategists consciously look for such factors and take them into consideration for strategic management, they are likely to be more successful while putting in relatively lesser effort.

Probability of Impact Impact on business

High Medium Low

High Critical High Low

Medium High High Low

Low To be watched Low Low

CSFs for Apollo Hospitals

Probability of Impact

Impact on business

High Medium Low

HighMarket, Quality,

RegulatoryInternational -

Medium -Socio-

cultural, Economic

-

Low Technological - Political

ENVIRONMENTAL THREATS AND OPPORTUNITY

PROFILE (ETOP)

Market Environment Enormous , unmet demand for high quality health care

among Indians Hospital Sector

Private Nursing Homes Government Hospitals

Factors Rates No. of beds Services Technology & Settings, facilities

Technological Environment Expensive but no large scale sudden changes

Economic Environment Economic Development pursued by

Indian Government after independence Central planning Import substituting industrialization

Liberal economic reforms in 1980

Regulatory Environment A new round of changes : Introduction of new

industrial policy by Prime Minister Dismantling of licensing requirement

Elimination of Government monopolies, reduced tariffs and liberalized foreign investment

Stimulation of private sector growth Rao reforms leads to immense market excess

Political Environment

Politics had no great role in the industry. Although lobbying could be used as an

influence Lobbying: Presenting the idea to Prime

Minister Liberalization of hospital sector, allowing

broad access to financing and encouraging hospital development.

Socio-cultural Environment World’s largest democracy Variety of

Economic levels Social status Cultural Group

Co-existence of poor and middle class

International Environment High quality medical care available

internationally as compared to India Brain Drain - A big issue

Environmental Sector

Nature of Impact

Impact of Each Factor

Market Enormous , unmet demand for high quality health care among Indians

Technological Expensive but no large scale sudden changes

Economical Economic Development, Liberal economic Reforms

Regulatory New Industrial Policy, Rao reforms, Dismantling of licensing requirements

Political Politics had no great role in the industry

Socio-cultural World’s largest democracy, Co-existence of poor and middle class

International High quality medical care available

internationally, Brain Drain