The Apollo Clinic Executive Summary

Apollo Hospitals group, the largest and most reputed healthcare provider in South Asia, identified a significant market opportunity in the day-to-day healthcare segment. Size of the business (around two-thirds of the overall healthcare industry), extremely fragmented provider network, and increasingly demanding consumer were some of the key facets of the prevailing market scenario. Apollo’s enviable brand equity and its domain knowledge created a uniquely advantageous position to enable the group to exploit this market opportunity.

The Apollo Clinic was conceived to offer specialists’ consultation, diagnostics, preventive health checks and pharmacy services under-one-roof. Convenience, coupled with trust associated with the brand, was the bedrock of the product strategy. Suitable technology, value-for-money pricing and intent to create an overall experience were the other key attributes of the product. Development of the business model and assessment of the market potential resulted in adoption of franchising as business format. The blue-print was further developed in association with some of the most well-known firms in their respective fields, be it architecture, information technology or training.

A suitable communication strategy, including branding, was developed followed by a phased launch. Today, 29 of these clinics dot the length and breadth of the country. The concept has been extremely successful with over 2,00,00 customers in about two years and a business of over Rs 250 million. Customer satisfaction, as evidenced by ongoing audit, has been extremely high. The viability of the business model is now proven and its impact on the image and also the bottom-line of the parent organization has been equally encouraging. The Apollo Clinic being awarded the Franchisor of the Year for two consecutive years is a testimony to our focus on consistency and superior quality.

Greater investment in communication and even more stringent selection process for the prospective franchisee have been some of the major learning. The early success has resulted in the need for accelerated scaling up and development of product derivatives.


the group is also a major player in hospital management consultancy services. Apollo today has over 30 owned/ managed hospitals across the country in cities such as Chennai. medical BPO. UK. more than 60.000 super specialty beds. completed over 3 lakh major surgeries with enviable success rates. education. Ahmedabad. Other than a large network of hospitals.The Apollo Clinic Organization Background The Apollo Hospitals Group is recognized as the ‘Architect of Healthcare’ in India. in a recent 19-city survey. Nepal. Saudi Arabia. Hyderabad. the group has treated over 10 million patients.000 foreign patients from 55 countries have been treated at the various Group hospitals. Ghana and Nigeria. third party insurance administration and pharmacy retailing. telemedicine. the Group finds presence in Sri Lanka. The Week magazine. In the last 5 years. Delhi. rated the Apollo Hospital. 2 . Chennai hospital as the best private hospital in India. Bangladesh. Pune and Bilaspur. With over 6. Kolkata. Internationally. UAE. in over 50 medical and surgical disciplines.

Currently. The empowered consumer However. 3 . consumerism is on the rise. specialists or super-specialists).000 SEC A and B respondents in 20 cities. greater exposure to the media and higher levels of income. A recent report by CII-McKinsey. Unprecedented transformation in some of the other service sectors such as banking retaining and entertainment have further fuelled the need for overall improvement in experience. only 32% of the average household expenditure on healthcare is on account of hospitalization. based on around 10. Absence of accreditation norms or quality regulations resulted in a poorly regulated cottage industry-like environment. Fragmented provider network This day-to-day healthcare segment comprises of three major constituents: consultations (with family physicians. further corroborates it by indicating that 61% of private spending in India on outpatient care. Healthcare in India.The Apollo Clinic Market Opportunity Larger slice in the business pie According to a KSA Technopak study on Healthcare Expenditure Trends in India. and are demanding better quality. is extremely fragmented. with rise in literacy rates. It clearly establishes that this segment represents the larger slice of the healthcare business. consistent and standardized services. the provider network for such services. unorganized and unbranded. the rest being accounted for by domiciliary healthcare. Consumers are becoming more discerning. even in large cities. diagnostics (ranging from routine lab tests to ultrasound) and pharmacy (for medicines).

offers an uniquely advantageous position to address this significant. where the average consumer has no rational framework to make an informed decision. trust plays an important role. yet unexploited market opportunity: the day to day healthcare segment. a global study Healthcast 2010 by PricewaterhouseCoopers indicated that healthcare providers. and its phenomenal understanding of the healthcare business. “When we are considering a doctor or a medical facility.The Apollo Clinic Role of a brand In healthcare. It is precisely in this context that branding offers significant potential. In fact. caring and integrity – processing what we can see and understand to decipher what we cannot. Apollo’s uniquely advantageous position As the only Superbrand in the healthcare category in India. Feb 2003). shall emerge as the clear winners. 4 .” (Clueing in Customers. Apollo’s brand equity (not just in India. looking for evidence of competence. most of us unconsciously turn detective. Harvard Business Review. who believe in branding. but also in a number of overseas markets).

the Apollo group will play the role of a strategic facilitator through The Apollo Clinics. PQR. In order for this to happen. The Product Given below is a brief description of some of the major components of the product design: Range of services To offer convenience. it was decided that the clinic will confine itself to consultations by specialists and super-specialists only. standardized service and trust. Keeping in view the role played by family physicians. The study clearly indicated that the healthcare system as a whole (with the doctor at the centre) is increasingly being viewed with suspicion and misgiving by the average consumer. 5 . the clinic model would need to encompass wide geographical reach. was engaged to conduct a study on our behalf in early 2001. the qualitative research arm of IMRB. pharmacy and preventive health check up packages under-one-roof. The Apollo Clinic was conceived to offer specialists’ consultation. comprehensive diagnostic services.The Apollo Clinic The Marketing Initiative Strategic imperatives To get a more accurate understanding of the dynamics of the market place largely in the day-to-day healthcare segment. The study also mentioned. in its bid to remove this cloud of suspicion and disrespect. It would also help in leveraging general physicians’ role as influencers for other services being offered by the clinic. their sheer numbers and also Apollo’s high-end image.

Adequate focus on information technology. Creating the experience To reinforce the unique positioning in relation to a hospital or other stand-alone clinics and diagnostic centres. would drive a clinic’s profitability. soothing and non-hospital like ambience.The Apollo Clinic Technology To improve viability of the business model. it was understood that aggressive communication would be vital to correct the perception in the clinic context. with a comprehensive clinic management software solution. technology. Though the clinic would offer significantly superior services. was envisaged to allow integration across clinics at a later stage. it would follow a value-for-money pricing strategy. not margins. it was decided that the interior design of the clinic should provide a warm. speed of service and staff productivity. with specifics getting guided by the local market conditions for each of the clinics. Pricing Given the relevance of services being offered across different segments. but proven. well-developed training programmes and ongoing quality audits. It meant a rigorous selection procedure for employees (including psychometric testing). was well understood. it was decided that the volumes. without compromising on the quality of services. it was decided that the clinic would have medical equipment with state-of-theart. to be able to offer a different experience. and also to improve accuracy. 6 . the importance of non-clinical aspects of service delivery. While the clinical outcome would be extremely vital. Since majority of the corporate hospitals including Apollo suffer from them being perceived as elitist and 5-star facilities.

Based on our understanding of the anticipated revenue streams.000 sq ft. Qualification as per a wellformulated selection criteria including stringent due diligence exercise was mandatory for each of the prospective franchisees. the best professionals / firms in their respective categories were engaged after a careful screening exercise. Franchising as a business format In line with our objective to leverage our brand equity and the domain knowledge. ranging from equipment procurement to clinic stationery. Alliances with industry leaders For each of the major components of the Apollo Clinic model. 7 . in the region of about Rs 17 million. rather than get into the management of ‘smaller’ outlets across a vast geographical region (in relation to the large and mid-sized Apollo Hospitals). Detailed space programme indicated a requirement of about 4. it was decided to adopt franchising as the business format. with interiors and medical equipment being the major cost components. It was also understood that the selection of the right franchisee would be the single-most important factor. As a franchisor. it meant an IRR of over 20%. income profile and demand-supply gap of top 200 cities/towns in India led to the scope to establish about 250 clinics in the country in 110 cities.The Apollo Clinic Development Phase Business Model A detailed financial blue-print resulted in a project cost. we also leveraged our role as an ‘aggregator’ to offer economies of scale in virtually every facet of our offering. A further study of population. which was expected to be leased. It was also understood that the in-depth knowledge of local market conditions and also the entrepreneurial drive of the franchisee would be the key drivers of the success. for each of the clinics.

Wipro Healthcare IT was engaged to develop the comprehensive clinic management software. Amarchand Mangaldas helped in preparation of the Franchise Agreement. Thus. which stipulated an agreement period of 7 years. both for clinical and non-clinical functions. Positioning The initial communication strategy for The Apollo Clinic focused on three key propositions : ambience. ‘price’ ad. the lineage and ‘for the family’ feel. one of the most reputed architectural firms. were developed by the Apollo’s in-house team. 8 . and ‘reaching the 25 clinic milestone’ ad). Subsequently. NIS Sparta provided the Service Quality training and Ravi Bajaj designed the employee uniforms. the visual mnemonic of ‘Brings life back to normal’ was developed. it was decided that the communication should focus on the integrated services available underone-roof as the key message. The Apollo Clinic brand with a simple visual mnemonic for the family in warm orange colour was developed accordingly. Bangalore to develop a 2-week management programme for each of the franchisees. was chosen as the architects for the project. a one-time license fee of Rs 2 million and an operating license fee of 5% of gross revenue. since warmth could be conveyed through execution and pricing should be more of a supportive proposition. Communication Branding The nomenclature and the visual identity had to convey a facility. A nurse with a child was adopted as the visual for all backdrops. (Exhibits 1-3 : a typical brand ad. convenience and value-for-money pricing.The Apollo Clinic Alfaz Miller. Standard Operating Procedures. We also engaged IIM.

The corporate segment has been targeted in a focused manner for promoting regular health checkups for their employees and also pre-employment check-ups for new recruits through personal selling. New Delhi. To add to that. 9 . . among others. Surat and Varanasi. Launch and further roll-out On completion of the development phase. resulted in finalization of franchisees for 6 locations. Mumbai. The first Apollo Clinic was launched in April 2001 in Janakpuri. Our Clinics are in regular contact with existing customers through newsletters ( Exhibit 4) and direct mailers. word-of-mouth advertising.The Apollo Clinic Media Given the sensitivities and the likely risk of being perceived as overly commercialized business proposition. Instead. Guwahati. Jaipur (the second in the city). it was agreed to have limited focus on ‘paid’ advertising and conserve advertising spends. atleast 20 more clinics are expected to open over the next couple of months. 29 Apollo Clinics dot the length and breadth of India .from metros like Delhi. Thane. Siliguri. public relations and local promotional initiatives have played a greater role. Chennai and Ahmedabad to smaller cities such as Jamshedpur. which after various stages of the selling cycle. Bangalore. It resulted in over 200 enquiries in the North. Salem and Kannur. we released our first advertisement inviting applications from prospective franchisees. in Gorakhpur. Today. Kolkata.

A study conducted by ACNielsen based a total of 1390 interviews across 3 cities highlights the impact of The Apollo Clinic on the overall image. and staff responsiveness have been some of the most appreciated aspects.3 million and Rs 5. which so far had The Apollo Clinic as the key product. (Exhibit 6) Impact on Apollo’s financial health Being a wholly owned subsidiary of Apollo Hospitals Enterprise Ltd with a paid-up equity share capital of Rs 15 million. has contributed Rs 3.000 customers and a total business of over Rs 250 million.9 million 10 . such as availability of high-end medical equipment or more competent doctors.The Apollo Clinic Analysis of results and impact on organization The success of our strategy has been captured in terms of the following parameters : Consumer response The Clinic has had excellent response from various customers. Over the last two years. are reflection on category differences. Impact on Apollo’s image Being at the ‘retailing’ end of the healthcare delivery spectrum. Warm ambience. A summary of performance analysis (Exhibit 5) clearly establishes the success of the model. which gets further proven by extremely high incidence of repeats for their further healthcare requirements. there is a marked correction after the visit to the Apollo Clinic in terms of ‘price perception’ and ‘not for everyone’ image of the Apollo brand. Apollo Health and Lifestyle Ltd. The Apollo Clinic aims to provide a friendlier and more regular consumer interface for the overall Apollo brand. While certain differences in perceptions between Apollo hospitals and clinics. Comprehensive service quality audits across clinics in existence for more than six months have indicated an average of over 94% customers being satisfied or more than satisfied. the clinics have captured almost 220. even at such an early phase of the brand existence. comprehensive services.

with a projected contribution of Rs 9 million during the current financial year. amongst over 130 entries. Industry recognition Given the fact that The Apollo Clinic franchise was conceptualized and set up from scratch only 3 years back. This is further corroborated by the emerging phenomenon that quite a few of our existing franchisees have signed on for more number of clinics and have expressed interest in moving up the value chain in healthcare. As the panel of judges mentioned. it is encouraging to note that The Apollo Clinic was adjudged Franchisor of the Year. The award is in recognition of our commitment to the franchisees’ interest and our utmost focus on standardization and service quality. 11 . for two consecutive years. The clinic viability Quite a few clinics have achieved the cash break-even points in about a year of their existence and have clearly established the trend for impressive returns on the investment.The Apollo Clinic of PAT during the last two financial years.

Greater investments in the brand and category familiarization Given the fact that The Apollo Clinic aimed to create an altogether different category as ‘comprehensive day-to-day healthcare services provider’. awareness about the need for preventive health checks.The Apollo Clinic Major learnings Some of the major learning so far have been : Selection of franchisee We have witnessed in quite a few cases that the franchisees expect that the brand should generate ‘automatic’ returns on their investment. where we expect the prospective franchisee to understand the demands of the business model and generate adequate comfort with us. It is a manifestation of the larger Indian reality. with a two week cooling period. by the owner’s reluctance to get his hands dirty and the proverbial rent seeking behaviour. and more effective. Middle-East and North Africa region. Future directions Overseas markets The first international clinic at Doha. as well as create greater. In the next few months. We are now moving towards an even more rigorous selection process. 12 . we believe that we need to increase our mass media spend to promote The Apollo Clinic brand. 2005. we plan to expand a lot more aggressively in South Asia. In the past few weeks. there has been extremely encouraging response to the concept from countries such as UK and Singapore as well. more often than not. both in terms of his knowledge and also entrepreneurial drive. Qatar is scheduled to get formally launched on Jan 26. which is characterized.

Inner circle of franchisees Like any other leading franchise brand in the world.The Apollo Clinic Accelerated scaling up Given the cumulative learning across various phases of project development and launch. 13 . which has had encouraging response from some of the franchisees. We propose to form an Inner Circle with a select panel of 12 franchisees based on their performance. Ever increasing network and the resultant impact in terms of visibility shall also facilitate quicker growth in clinic revenues. Product derivatives We plan to augment our product portfolio by newer initiatives such as Disease Management Programmes (for chronic ailments such as asthma and diabetes) at the clinics and also a new variant like The Apollo Women’s Clinic. we plan to scale up a rapid pace with an aim to set up almost 50 clinics in the next calendar year and another 100 the following year. we believe that our franchisee community is poised to play a significant role in shaping the future of the brand and generating even more avenues for quality enhancement and business growth. potential and progressive outlook.




yet affordable Diagnostic services and a 24-hour Pharmacy that stocks only genuine medicine and personal care products. With the everemerging dominance of life-style diseases. Ronen Roy and Dr.consultation with specialists and super specialists. And this newsletter. So. Lakshmi Narayanan. we have state-of-the-art equipment.L RA U E UG SU A S IN I The Apollo Clinic TM the Shakespeare Sarani capsule Shakespeare Sarani is healthier than ever. Then the courteous staff. The Apollo "The Shakespeare Sarani Clinic will always have a special corner Clinic is within reach of in the heart of the Apollo group. As of today. Arvind Saraogi Dear Neighbour. Dr. CEO. accurate. which more than meet your expectations. In this newsletter. Sanjiv Goenka. Dr. thousands more lives back to normal in the future”. said Mr. It is currently exploring opportunities to associate with Rotary Club and like-minded associations to promote good health to their members. As you would expect from Apollo. Mr. Conveniently located almost Notably. affectionate and welcoming ambience of The Apollo Clinic. some of the most qualified and well-trained doctors and technicians and rigorous quality control measures. ITC. we will update you on the different happenings related to the Clinic. Anjali Saraogi Director The Apollo Clinic Shakespeare Sarani 2283 7407/9 . Ratan Jalan . and you will already start feeling better. L to R: Mr. and read on. all under the same roof. diagnostic test services. What's more. Tata Steel. Ratan Jalan. kindly treat this as a communiqué from your friendly neighbour. Wishing you good health. we will also inform you about simple ways to good health. the Shakespeare Sarani Clinic was the very first clinic to opposite Kala Mandir on sign with Apollo Health and Lifestyle Ltd. The Clinic's location has made a lot of difference to this figure. is our way of communicating directly with you. Among the thousands of clients are also several leading corporates including Reliance Industries. Walk into the warm. S Islam. 8000 others to access day-to-day healthcare. Shakespeare Sarani. That's why the Clinic has also been offering a comprehensive range of Preventive Health Checks. It will be our constant endeavour to offer services. we believe that prevention is the best cure. Reddy and Mr. the state-of-the-art equipment and focus on service quality are all brought together to bring your life back to normal. Yours Sincerely Mrs. AHLL. Dr. Debal Sen. Shakespeare Sarani crosses 8000 customers mark in less than one year Prevention is better than cure that's why the Clinic has successfully organized a number of innovative health promotion activities including Express Heart Check and Oral Cancer Detection Camp. The Capsule. Santosh Agarwal. which have been customised for every member of your family. HDFC Bank and ICICI Prudential. in the country. 8000 people have accessed good health at The Apollo Clinic. August 2004 The Apollo Clinic. and a range of health checks for all. What's more. Dr. I am sure that the Clinic will bring everyone in the neighbourhood. a 24-hour pharmacy that door delivers medicines. already have. Hutch. The Apollo Clinic has been in your neighbourhood for some time now and has brought world-class healthcare within your reach. Prathap C. Coke. it ensures that you don't have to go anywhere else Visit The Apollo Clinic and touch good health. The Clinic boasts of some of the leading specialists and super-specialists in Kolkata like Dr. The Clinic has already completed more than 1600 health checks so far. The Clinic offers everything one needs under the same roof . The clinic offers multiple services like Consultation with leading Specialists and Super Specialists.

649 8.509.785 customers per month Total Clinic sales EAST 1 S Sarani.090 171.542 8. Ahmedabad Total NORTH 9 Azadpur.201 3.901 217.543 11.450.540 4.364.139 3.065.071 2. Delhi 10 Gurgaon 11 EOK.250 10.479.140.The Apollo Clinic Summary of Performance till 30 Nov 2004 Sl No Clinics Launch Date Total Customers* Avg.048 909 477 1.839 37.793 136.441 4.733.057 1.392.453.298.998 4.554 5.943.147 8.674.785 13.975 4.101 20-Sep-02 21-Mar-04 12. Delhi 15 Rajouri Garden. Bangalore 26 Salem 27 Kannur Total Grand Total 11-Sep-03 7-Apr-04 25-Jun-04 23-Sep-04 4-Oct-04 11.782 255.473.652 22. Delhi 16 Faridabad 17 Janakpuri.105 1.928. .400.872 24.008 39.470 732.145 4.631 * since each new customer is given a unique ID at the time of first registration.252 22.018 1.766 2.340 16.155 5.818 7.193 1. Bangalore 25 Koramangala.605 796 634 964 442 586 3.967.561.435.422 17.940 468 723 1.019 21-Nov-03 27-Jul-04 16-Sep-04 7-Mar-04 4-Jan-04 18-Sep-04 12.928 391 590 992 580 674 981 551 571 670 383 395 425 214 559 7.313.191 16.950 1.076.818 1.836 1.320.326 1.668.393.109 3.106 504 5. Kolkata 2 Howrah 3 Saltlake 4 Jamshedpur 5 Siliguri 6 Guwahati Total WEST 7 Gathlodia.933. Delhi 12 Ghaziabad 13 Noida 14 Pitampura.650 12.062 1.810 37.683 7.171 22.759 3.247.756 14.401 30.232.567.956 13.999.966 3. Ahmedabad 8 Satellite.533 6-Jun-03 16-Nov-02 22-Dec-02 19-Oct-03 18-Oct-03 9-Aug-03 2-Feb-04 23-Dec-02 26-Apr-02 30-Jan-04 31-Jan-04 3-Nov-03 10-Jul-04 4-Jul-04 6.826 3.043 555.212 4.253 1.137 20.295 1. Delhi 18 Chandigarh 19 Ludhiana 20 Jaipur 21 Allahabad 22 Agra Total SOUTH 23 Central Bangalore 24 Malleshwaram.713 4.818 9.646 21.419 31.383.062 16.809 7.

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