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Environmental analysis & Strategy formulation of Appolo Hospital
Submitted to :-Prof.Viral Pandya Submitted by :- Bhavesh Thaker (0951) Ajay Charles Saha(0940) Prerna Kharti Rajesh Prajapati Final Year GLSMBA-Marketing
Health care Industry in India In India, the Healthcare system is split into a public sector, a private sector and a wide network of informal healthcare providers operating together in a large and unregulated network. This irregularity has caused wide disparities in access, especially in regional and rural distribution of healthcare infrastructure. Currently, the Indian healthcare sector is valued at Rs.1, 360 (US $34) billion roughly 6 per cent of GDP. The healthcare business is projected to grow to over Rs.1, 600 (US $40) billion or 8.5 per cent of GDP by 2012, according to Price Waterhouse Coopers (PwC) report, 'Healthcare in India: Emerging market report 2007'. Some Facts about the Hospital Industry India’s healthcare industry is currently worth Rs. 73,000 crore which is roughly 4 percent of the GDP. The industry is expected to grow at the rate of 13 percent for the next six years which amounts to an addition of Rs 9,000 crores each year. The national average of proportion of households in the middle and higher middle income group has increased from 14% in 1990 to 20 % in 1999. The population to bed ratio in India is 1 bed per 1000, in relation to the WHO norm of 1 bed per 300. In India, there exists space for 75000 to 100000 hospital beds. Private insurance will drive the healthcare revenues. Considering the rising middle and higher middle income group we get a conservative estimate of 200 million insurable lives. Over the last five years, there has been an attitudinal change amongst a section of Indians who are spending more on healthcare.
Andhra Pradesh with 120 beds. . An increasingly fragmented market. capital intensive operations and a long gestation period are all wise reasons to shy away from investing in the healthcare industry. secondary and tertiary hospitals and clinics across India. Corporate hospitals mushroomed in the late eighties. Prathap C Reddy promoted it. Ahmedabad. Government and trust hospitals dominate the scene. Two Hospitals were commissioned during the year. Good corporate hospitals are still too few to amount to a critical mass. medical BPO and health insurance services and clinical research divisions that are working on the cutting edge of medical science. Madurai. neighbourhood diagnostic clinics. Many of the trust hospitals suffer from poor management. Bilaspur. having 70 beds and a Hospital at Karim Nagar. The boom remained short-lived and out of the 22 listed hospital scrips. It was incorporated as a Public Limited Company in the year 1979. Dr. most are being trading below par. have occupancy levels of 60%. The Apollo Hospitals group today includes over 7500 beds across 43 hospitals in India and overseas. Hyderabad. a comprehensive 250-bed hospital with an emphasis on speciality and super specialties in over fifty departments at Chennai. Apollo Hospitals Enterprise Limited (AHEL) owns and operates a network of leading primary. Mysore. Tamil Nadu. New hospitals at Bangalore. and Visakhapatnam have occupancy levels exceeding 75%. an extensive chain of Apollo Pharmacies. The Company also has a pan India footprint of 873 standalone pharmacies. Apollo Hospitals Enterprise Limited Apollo Hospitals Enterprise Limited (AHEL) is a leading private sector healthcare provider in Asia. lack of statistics. In India. Apollo Loga Hospital at Karur. Apollo hospitals can be grouped into the following categories based on their stage of maturity and occupancy levels: Mature hospitals at Chennai.
. Healthcare services segment comprises hospitals. As per the Accounting Standard 17 issued by The Institute of Chartered Accountants of India. AHEL has two reportable segments. hospital-based pharmacies and Consultancy Division. The other segment comprises standalone pharmacies. healthcare services and Standalone Pharmacies.
the first to set-up hospital outside the country and the first to attract foreign investment. 3. education or telemedicine. to build around 15 new hospitals. Indian Hospitals Corporation Ltd. Apollo is one of Asia’s largest healthcare players. the Apollo Hospitals Group. Nepal and Malaysia..15. The group is planning to invest Rs.5 percent success rate in 45. 98. will help the group raise money at a better rate and by consolidating inventory. With 2600 beds.000 employees across the country. comprising of one of the largest networks of 26 hospitals.000 preventive health checks done. The management realised the fact that in order to have a modern hospital in place all the work processes had to be related to IT. . And helping the company maintain a balance between the corporate culture and rigorous medical excellence is recognition of IT as intrinsic to every process. etc. represents the changing face of healthcare in India contemporary and corporative. Sri Lanka. whether it is day-to-day running of hospitals. the need for an end-to-end integrated solution. Apollo claims to maintain the best of medical standards with a record of over 7. Hence.4 million treated patients. 2000 crore.The Apollo Group of Hospitals Driven by its line of being the “architect of healthcare” in India. 10 clinics and over 10. in India. The recent merger between its 3 group companies. The application of IT in the day-to-day working of the largest hospital of the group. which was an integral part of the hospital inception project. It has been the first private company to administer health insurance in the country and Indraprastha Apollo Hospital in Delhi is the fourth largest corporate hospital in the world. The Apollo group is India’s first corporate hospital. Indraprastha Apollo.000 cardiac surgeries. throws light on the extent of the automation drive within the company. This led to the implementation of the Hospital Information System (HIS). Deccan hospitals Corporation Limited and Om Sindoori Hospitals Limited. it will save around 10% of the material cost.
One of the biggest advantages of HIS is that any medically relevant information related to the patient is available at the click of a button. The hospital has also developed a very effective mailing system for its employees. engineering. The work processes of the hospital are primarily divided into two areas the patient (comprising of in-patient and out-patient) and the non-patient all the back-end departments like housekeeping. which provides for end-to-end integration of the various processes and functional areas within the hospital to make for a seamless workflow. This data is fed into the system with a Unique Hospital Identifier (UHI) number allotted to the patient so that by the time the patient meets the doctor. finance. which means a lot when it comes to saving a life. Depending on the availability of the doctor. accounting and inventory. This information is then fed into the system and the updated information is available to the doctor in real-time. The company’s Intranet is being used to run mailing applications as well as information relating to . he already has all the required basic information. The hospital today boasts of an integrated HIS. purchase and HRD. the data is again keyed into the system as a patient record under his UHI and is accessible for quick reference. which contains all the basic information related to the patient. HIS contains all the information relating to appointment schedules of the doctors. On the date of his appointment. thereby saving precious time. materials. which are integrated with the patient areas wherever required. the patient is given the date and time of appointment. The workflow process starts with the patient seeking an appointment with the doctor. This is followed by 15 minutes of consultation with the doctor after which the doctor gives his prescription. which is based on Microsoft Exchange. HIS also acts as a kind of ERP for the hospital with its automation of various back-end areas like financial. the patient registers himself at the counter by filling up of a form.
diagnostics. gastroenterology. critical care medicine. Apollo Global Projects Consultancy Apollo offers project and operations management consultancy services with the support of operational and functional specialists. strategic planning. Apollo Pharmacy . preventive health checks and 24-hour Pharmacy. cardio-thoracic surgery. is an integrated model and offers facilities for specialist consultations. Other business units Apollo Hospitals Apollo Hospitals Enterprise Limited has over 8065 beds across 46 hospitals in India. nephrology. establishment of medical and administrative protocols etc. hand & micro surgery and reproductive medicine. orthopaedics & joint replacement surgery. leave information and basic information relating to the company. oncology. rest of Asia and Africa. training and medical equipment consultancy. has established over 100 Apollo Clinics across the country. management contracts. infrastructure consultation. The pre & post commissioning consultancy services include feasibility studies. human resource recruitment.company policies. The hospitals are multi specialty tertiary care facilities with centres-of-excellence in medical disciplines including cardiology. all under one roof. neurology. Apollo Health and Lifestyle Limited Apollo Health and Lifestyle Limited.
Apollo Hospitals Education and Research Foundation AHERF was set up to establish. The group adds one pharmacy every 23 hours. Apollo in medicine and NIIT Limited in the field of electronic-education. . including ones certified by the Royal College of Edinburgh. maintain and support educational institutions in promoting medical. The Institute offers over 18 post graduate teaching programmes. stem cell transplants. Since then. epidemiological studies. The research division currently undertakes diverse projects from clinical trials in multiple locations to molecular biology. MedVarsity Online Limited is backed by two giants. over 1500 hours of medical content that is accessible to the medical community. anytime and anywhere. Apollo has witnessed a steady growth in terms of delivering quality healthcare and reaching out to the masses. paramedical and hospital management courses. Apollo launched its first model Telemedicine Unit at Aragonda village in the Chittoor district. and in the future identification of genetic Biomarkers. MedVarsity has developed in-house. with over 750 retail outlets in key locations across the country. Apollo Pharmacy is India's first and largest branded pharmacy network. Apollo Telemedicine Networking Foundation In 1999.
Apollo Insurance Company Limited Apollo DKV is a joint venture of the Apollo Hospitals Group and DKV AG. Apollo has pioneered the concept of telemedicine in India and Asia. Wellness Plus is the perfect blend of modern and complementary medicine like aromatherapy. Europe's largest private health insurer and a Munich Re Group company. and has over 100 telemedicine centres in India and overseas. Telemedicine is a potent means of harnessing telecommunication technology to deliver healthcare and education to patients in regions that are geographically less accessible. and meditation that fits the modern lifestyle. Apollo Wellness Plus Apollo Hospitals launched the first Wellness Centre at Apollo Hospitals Chennai in Feb 2005. Apollo Reach Hospitals An endeavour to bring world class healthcare to semi urban and rural India every Apollo Reach Hospitals will be a specialty hospital. yoga. designed to complement existing private and public healthcare facilities in the proposed towns and villages. It also saves time and the cost of travel to access quality care. wellness solutions and disease management to meet customer needs. The company offers innovative health insurance. . pranic healing.
150 beds. OTC medicines and other health and body-care related products • • MedVarsity Online Limited (MOL) Moving towards offering e-prescription based services. With initial bed strength of 100 . besides Hospital Apollo Health Street Incorporated • • Offers Business Process Outsourcing and IT solutions and services to global clientele. procurement of land and identification of cities are underway to set up the first phase of 25 Apollo Reach Hospitals over the next two years across India. each Apollo Reach Hospital can be ramped up to a 200 bedded specialty hospital Apollo Hospitals Group– Companies. Established in 1999t Apollo Pharmacies • Largest retail pharmacy chain in India and has round-the-clock operationsmaintains a stock of prescription drugs. Construction of hospitals. .
• Established in 2000 Apollo Telemedicine Enterprise Limited (ATEL) • Allows the participant sites to collaborate with institutions in India and abroad and provides their clientele access to healthcare in areas not adequately served by the medical community. and to make medical facilities accessible for greater number of people. Keimed.over 1500 hours of medical content that is accessible to the medical community. Online Hospital Equipment Services Private Limited • • An electronic equipment exchange for medical devices and high-end technology products used in the delivery of medical care It provides expert advice and services on technology.7 million lives Initiated ‘managed care’ to control rises medical costs.affiliated to 1700 major Corporates and manages 4. • Established in 1999 Family Health Plan Limited (FHP) • • It’s the largest Third Party Administrator (TPA) in Asia. techno-commercial issues Apollo Health & Lifestyle Ltd (AHLL) • Delivers family focused primary healthcare services through branded Apollo clinics across India and its neighbouring countries.com Limited • Used information Technology to create an e-marketplace that would service Apollo and others through an end-to-end. logistic solutions partnerships for effective inventory management and control.• Acts as a catalyst for students and is contemporary to the existing education system. .
because of its high population. given that only 2 million people i.SWOT analysis of Apollo Hospital Opportunities in hospital With global revenues of approximately US$ 2. A big opportunity for the industry emerges from the privatization of the insurance segment. the Indian healthcare industry has the potential to show the same exponential growth that the software and pharmaceutical industries have shown in the past decade. there are economic factors that make India an exciting market. the healthcare industry is the world’s largest industry and India is emerging as a major player in this industry. Today. First.8 trillion. Further. With the demand for healthcare far exceeding supply. there are 315 million potentially insurable lives in the country. 0. only 10 percent of the market potential has been tapped till date and market studies indicate a 35 percent growth in the coming years. According to a recent study. India’s huge population of a billion people represents a big opportunity.2 percent of the total population are covered under Med claim. people are spending more on healthcare and are preferring private services to government ones. Since healthcare is dependent on the people served. As per the Insurance Regulatory and Development Authority (IRDA). which would extrapolate into a new delivery system in India. There is a vast insurable population in India. Hospitals in India are running at 80-90% occupancy. as per the IRDA. India’s health care industry is expected to grow by around 15% a year for the next six years.e. .
000 population is 13 in India while world average is 28. The density of doctors per 10. Threats The cost burden is set to increase due to the limited resources. Medical equipment accounts for 40-45% of the total expenditure in hospitals. obsolescence of medical equipment. supply and capital costs.Density of nurses per 10. Corporate entities entering the healthcare sector. and rising incomes will translate to higher wages. requiring medical professionals to upgrade their skills on a constant basis. . Apollo is one of the strongest brands with minimal threats in the near time. As a result. This means. continuing with the current leadership position in the market and comprehensive services with relatively greater margin. Apollo’s success has been drawn from the fact that it has added a number of synergic revenue streams to its business.000 doctors in the year 2012. Real estate prices have become prohibitively high and a deterrent to take on new projects. There could be a shortfall of over 450. easier access to capital. its multi-income inflow has helped it cover its fixed investments faster than the other companies in the sector. leading to the expansion of the hospital management education industry. Any change in technology will make existing medical equipments obsolete. introducing managerial practices and tools are showing a marked preference for professionals. This will add to higher costs of Healthcare delivery which has to be borne by the consumer. The migration of skilled technicians and nursing personnel to developed countries due to higher compensation levels leaves behind a void in quality of personnel at the disposal of hospitals.000 population in India is 6 while the world average is 13. Hospitals in India conduct the latest surgeries at very low cost. High rate of advancement in medical technology is leading to shorter lifespan.
They have obtained 4 JCI accreditations across all specialties. the first in the country to do so. They have implemented clinical governance measures that have gone a long way in ensuring and improving the quality of clinical care at all levels of healthcare provision in Apollo Hospitals. They have focused on the provision of high-quality healthcare at affordable rates. ISO 9002. Their quality consciousness and patient-centric approach has improved the operational and clinical efficiency. and led to numerous accolades in the medical arena in India. Also.Strengths Apollo is an integrated healthcare organization with a comprehensive span of healthcare capabilities. They have consistently invested in medical technology and equipment so as to offer the highest quality healthcare services to their patients. The availability . from Bureau of Indian Standards & British Standards of India. they are able to leverage on cost and benefit from the group bargaining position to obtain better terms from suppliers and service providers. secondary and tertiary. their quality programmes are registered by the Indian Council of Medical Research. It provides seamless delivery of services at every level of care – primary. Being the largest purchaser and consumer of medical consumables in the private sector. enabling us to provide end-to-end services to patients.
enduring relationships with doctors and medical professionals. 320 Slice CT Scanner. This has attracted medical professionals returning from abroad to work with us. and is saving more and more lives every day. Apollo believes one of the pillars of their success is their huge talent of approximately 811 doctors across 50 specialties. They maintain strong. besides extending their range of services.104 paramedical personnel and 513 executives. Their Medical success rates have been world class.of sophisticated medical equipment. and have approximately 3. Cyber knife ensures that we are among the few healthcare providers in India capable of offering advanced healthcare procedures such as stereo tactic radio surgery and bone marrow transplants to our patients. such as the PET-CT scan. .130 nurses. Apollo stands unique among the few providers of quaternary care for complicated medical conditions. They have a professional management team with a strong performance culture. High-quality medical facilities and services are offered at cost competitive rates when compared to the Western and European regions making India the preferred choice for medical travel. The major strength contribution to the success of Apollo Hospitals has been the clinical excellence governed by strong medical value system and ethics. Their brand name has helped us to expand operations in India and overseas. 1. They are among the largest networks of doctors in India.
specially amongst people who could not afford to travel abroad for treatment .Weakness They have added 297 Stand-alone pharmacies during the year. Internal control systems and their adequacy The company deploys a robust system of internal controls to allow optimal use and protection of assets. and ensure compliance with statutory laws. facilitate accurate and timely compilation of financial statements and management reports. The rising costs of healthcare delivery makes majority of the private hospitals expensive for a normal middle-class family. High unmet demand. Drivers for International Strategy • • Huge Opportunity Large unmet need for higher quality and medical care 1. competencies and expertise needed to deliver quality healthcare. High attrition rates among the nursing workforce to Western countries and competitors due to higher salaries and perks being offered necessitates higher investment in training to ensure that the clinical staff is equipped with the right skills. since most of the pharmacies are in the incubation stage which can depress the margins.
The chain has spun of subsidiaries under its main brand which include Apollo Clinics. Apollo used the OLI Paradigm effectively for International expansion Ownership Advantages While the hospital group has maintained its ownership it has found that in order to remain competitive and achieve scalability it needs to relinquish some of power and has adopted the franchising model in order to expand. Internalization Advantages Used an internal strategy of leadership. 2 cities alike. The chain apart from setting up multiple hospitals and clinics in each city has now set it footprints in tier 1. quality and network. Apollo Pharmacy etc. It has aimed to become a global brand by setting up centres in Dubai and other Asian countries and is continually looking to expand. using low quality equipment. Certain foreign markets such as Gulf countries were lucrative as they could generate higher ROI. Major procedures like open-heart surgery were available 3. Location Advantages Apollo has firmly reaffirmed in its strategy the belief that “more is sure”. . The medical treatment in many Asian and Gulf countries was conducted sloppily.2. • Greater ROI 1.
Apollo is continually characterized by change and innovation. to local doctors to build relationships Frequent mailing by Apollo to the doctors. Apollo’s branding and demand generation initiatives focused on individuals. Strategic inorganic and inorganic expansion in order to rapidly ramp up and help keep the company abreast with the dynamic business environment. referring doctors and corporations General Public and individuals Awareness of high quality medical care and stress illness prevention Targeted mailings to promote Apollo clinics for various therapies such as diabetes. to keep them informed about the hospital's services and procedures Track number of referrals made by individual doctors in a computerized database . cancer and cardiology Introductory discounts to attract first time users Developing an internal system to respond to all consumer queries promptly Regular advertising in a variety of media to target urban consumers Screening programs for illness such as cancer and tuberculosis in rural areas Local Doctors Individual visits by Apollo sales force. back pain. asthma.
Increased emphasis on Managed Hospitals in order to reduce risk cost and to increase geographical reach Licensing will help spread Apollo’s influence and recognition more quickly than building wholly owned facilities. Inform and update referring doctors about the progress made with the patients Encourage Apollo doctors to participate in national Medical Association meetings to increase the Hospital’s familiarity to doctors across the nation Corporations Corporate and government employers – Less price sensitive than those who paid out of pocket Target key decision makers such as top executives. trade union leaders and company medical advisors Mailings and individual visits Conduct programs at the companies to increase awareness and teach skills such as first aid Apollo has undertaken various key initiatives to increase international presence and operational efficiency Increased emphasis on Managed Hospitals Apollo built the first HMO (Health Maintenance Organization) in 1995. The HMO combines two methods of expansion – building wholly owned facilities and licensing. . human resource managers. It provides all medical care as needed to its members in return for a fixed annual premium. on the lines of HMOs in the USA. Improvement in efficiency and cost reduction Improvement in efficiency through better asset utilization of all existing facilities Cost Reduction through simplification of processes in the areas of materials. manpower and financing.
S. USA Associate of the Johns Hopkins University. and Europe Association with the Mayo Clinic and the Cleveland Heart Institute.Aggressive marketing Aggressive marketing to access overseas markets – measures such as publicizing successful surgeries.Thoracic surgery Exchange programs with hospitals in the U. Apollo Hospitals has also taken other steps to expand its reach and penetration globally International Affiliation and Accreditation The only international training organization for the American Heart Association Technical support from Texas Heart Institute and Minneapolis Heart Institute for Cardiology and Cardio . private patients through health insurance HMOs and TPAs and through local doctor referrals Backward Integration There is increasing focus on providing wholesome health solutions. establishing government-private 'Treatment Abroad Committees ' referring partnership for patients to be sent by the respective Committees. alliances/ partnerships and accolades Has established an AIC (Apollo Information Centre) network. awards. accreditations. USA International Research Alliances Apollo Hospitals has entered into various alliances to broad base its value proposition . integrating to the Indian methods of wellness.
Stem Cell Research and Therapy o July 2005 . clinical research and medical education Local Partnerships/JVs The local partnership approach has worked very well for Apollo Local Partner o Local partner usually deals with many local issues. nurse education. part of the Delaware Corporation. telemedicine. Dhaka . Neuroscience and Cardiology. technology. for the development of a sustaining and mutually-beneficial relationship in Cord Blood Stem Cell Research and Therapy in India Medical and Business Collaborations o July 2005 – Collaboration with Johns Hopkins to jointly develop stateof-the-art concepts.Apollo Hospitals Group in a joint venture with its Bangladeshi partner STS Holdings. partnerships with clinical departments especially in Oncology. doctors and other interest parties o Help in creating a sound clientele base Apollo – partial capital investment and management o Example .Tied up with Histostem. besides providing capital. such as provision of land and dealing with local authorities.
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