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THE SWIFTshareCOMPANY
We are true to our name
9/21/2010
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The SWIFTshare Company
It is a company that came into being as a franchisee of Heartland in Jan2011 and whichbecame independent by Oct2011. It started with a mission to remain true to its name. We will
be swift and share the data as fast as possible in interaction maintaining quality with our clients.
We wanted to name ourselves something that defined us and the philosophy we aspire to follow.
Thats how we came to be known as SWIFTshare .
A group of six individuals, who started a year back with a promise and resolution that we
are going to make it global and make it big. Meet us Praveen, Shaswata, Shiva, Terine, Venu and
Srinivas who had made a promise to each other and ourselves that we will make a difference. Atthe beginning of the very second year of us in business we are taking our first small baby step
into the world of globalization.
We six individuals, share a lot of things apart from the fact that we all are under-30 and
representing the young and energetic India, the first being our alma mater Amrita School of
Business, our belief in quality over quantity, passion for success, integrity and a diehard
attitude. We have known each other for the last six years and have a bonding which extends
beyond the professional life and each of us has had a lasting impression over each other. Thus weshare a long relationship which has helped us in making the overall environment so conducive to
work.
For the last 1 year, we have had some wonderful learning experience and the journey till
now has been exciting. We started with a lot of in depth research about the field but it was
largely based on secondary research and second hand information. A genuine unending interest
in the field and strive to succeed in it has led us to explore this field.
So what does SWIFTshare deal with? We are into medical transcription sector. It is a
sector which has been growing rapidly in the last few years. It is one of the fastest growing
sectors in the world of outsourcing. Before looking into the medical transcription sector, lets
look into what are the sources we have and why we decided to enter into international business.
SWIFTshare started with an employee size of 40 and over the last 1 year have increased
the number of employees to 70. People around us have told that we have maintained a snails
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pace in recruiting people. But we believe in quality over quantity. Thus we recruit only those
people who complete this organization and believe in it and make it as a part of their own
life. We dont need employees who we hire and fire but bits and pieces that complete the overall
SWIFTshare . These has resulted into productivity per employee almost twice that of any other
company in the industry. We believe in the fact that if there is zeal to work nothing else matters.
These can only come when employees are given some attainable yet challenging targets. As we
moved into the second year we had a meeting among all the peers (all employees are called
peers). Most of them raised their voice that we should move into the international market.
Interestingly we had pre decided (the time when we began) that we would look to the west by the
end of the third year of business. However since few experienced people joined us and gave ussome great insight about the functioning of the industry we leapfrogged many and have started
competing with the other competitors who have been in this field for 3-4 years.
The main criterion to move into the international business in the medical transcription
business according to data monitor is a minimum of 18 months of experience in this field
before any client seriously looks into you as a prospective outsourcing location. A company
which was started on the total cash (Rs.50 lakhs) we six had and a 50 lakhs initial investment
with Mr. Satish Agrawal, who was impressed by our business plan, it has been a wonderfuljourney. With annual turnover as of now is 2.5 crores, we are looking into a brighter side. With
an overwhelming agreement on this issue that we should move into outsourcing and maximize
our profits as the lions share of the business was outside India and not in India. But we had
started in India to gain experience before moving into the more profitable and more risky
international venture. The next step was obviously to pick the countries which we would like to
enter. For these we allotted a team of 5 the work to shortlist five prospective countries to enter
and then discuss among themselves the best two and keep the rest three as future viable option.
But before looking into the prospective countries let us have a look into what is Medical
transcription industry all about.
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A brief introduction of Medical Transcription
Medical transcription is a service oriented industry which deals with recording andconverting the voice recorded reports into text formats for maintain the records of various
patients. These voice records are those which are recorded by doctors/physicians giving details
of the patients case details. The voice records are converted to text formats. This conversion
process is done by medical transcriptionist. The equipment used by them is known as
Transcriber. The conversions into text are kept in the Personal Medical Records and medication
is provided according to this text.
One of the biggest advantages in this field which attracted us to this sector was therelatively low educational qualifications required. Only a basic knowledge in English and
knowhow of the various medical terminologies is required. Thus it does not require highly
specialized workers. This also means India with such a high amount of cheap labor, there are
huge prospects for these industry to bloom. The wages of Indian labor for this sector are as
low as 1/8 th of what paid in USA. The past records of this sector shows that India is the most
prospective center for Medical Transcription outsourcing centers. India has the largest market
share in the USA outsourcing market. Many competitors of ours dont provide any initial
training about these terminologies. We provide a professional who gives these MTs a 2 week
crash course and keep on updating them throughout the year with the latest medical
terminologies. This provides us core competency w.r.t. the various competitors.
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Evolution of this sector in I
Source: http://www.zinnov.co
1990-2000
O W St
2001-2006
Co T
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cli
2006-2010
Tein
In F
dia
m/presentation/Healthcare_Outsourcing_Ov
tsourcing started in late 1990s in Indiaas one of the first sector to be outsourcearted as a niche segment due to complex
mpliance with HIPAA allowed more freetsourcing in this sectore transcription companies started integrd coding function alongwith ite IT companies started providing softwanics and hospitals
le radiology and medical animation proctroduceddian Professionalscusing on bio medical market too
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Top Trends in Medical Transcription Industry
The various top trends that we have seen in this sector are follows:
With HIPPA coming in play since 1996, which requires compliance of certain norms and
regulations quality can be ensured. This has led to decrease in negative perceptions about
outsourcing and off shoring.
Speech Recognition/Voice Recognition software are day by day improving and gaining
acceptance as a means of recording and transferring data.
The use of Visual Black Character (VBC) pricing, which is endorsed by AHIMA andMTIA, is emerging as the industry standard.
Faster response time is becoming a major core competency factor in recent years.
Off shoring to Philippines (due to lower labor cost) and India (higher quality and better English
skills) have been on a high and account for 10% of the US market
Countries like UK, Germany and France have also in recent years also started off shoring.
Why IB?
The answer is as simple as it gets. The importance of going into IB for this sector is as
important as water for fish. No company can survive in this sector on the market base in India.
As in India, medical transcription has hardly any relevance. All the major companies are
surviving on outsourced market. So it becomes quite obvious that why is it required for us to get
into IB. In short we can say that since the market for medical transcription is outsourced IB is
unavoidable.
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Services Related to this sector
Most of the Indian companies are doing one or more of the following allied services.
The below given service sector are the one that SWIFTshare is looking to get into apart
from medical transcription in the coming years as a part of their international path planned. They
are as follows:
Medical Billing and coding
Document Management
Scanning and Indexing
Appointment Scheduler
Lab Order Integration
Patient Reminder Services
The major countries that we can look in the coming future are as follows:
USA
UK
Switzerland
Germany
France
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SWOT Analysis
STRENGTHS WEAKNESS
Lower Labor Cost.(1/8 th that of USA)
English speaking labor
India is one of the most preferred outsourcing
centers in healthcare sector.
12 hour time zone difference
Off shoring to India will continue to rise
A new entrant might find it tough as market is
competitive
Differentiating factors like highly qualified
professionals, infrastructures are negated.
OPPORTUNITIES THREATS
Declining outsourcing centers in Europe due to
sluggish economy. Thus major companies are
looking towards Asia for outsourcing.
One of the only sectors which has not been
affected by recession.
Still a huge untapped market left to explore.
Other countries like China, Philippines, Sri Lanka,
and Australia etc are major threats.
Recently US Govt. has looked for checking
unemployment by stopping such back end jobs
being outsourced. However these are just
indications.
120-150 Indian companies in this sector
Apart from this many individuals/households too
are working at much lower cost
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AAA Frame work:
In this as we are a staSince the services that we pr
adapt our technology so that
that suits to their local prefere
In order get the adv
activity we will go for Arbitr
the other works to small firms
Global Market for Medical
The global market siz
has a CAGR value of 15%.
can be shown below
Source: Slideshare.com
0
10
20
30
40
50
60
2010 2011 201
Global Mar
rtup company so we are looking for the Advide is according to the requirements of th
e can deliver the services in correct time in
nces.
ntage of our core employees who are sp
ge where we will do the projects where we h
on cost basis advantage.
ranscription Industry
e of Medical Transcription Industry is USD
projected growth rate of the global Medic
2013 2014 2015
et for Medical Transcription(in USD billion)
Global MaTranscriptibillion)
ptation and Arbitrage.e clients so we should
specified requirements
cialized in particular
ave strengths and give
25 billion in 2010. It
l transcription market
ize
rket for Medicalon size (in USD
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Number of Employees in the medical transcription sector in India
The current employee strength of India-based medical transcription vendors isapproximately 52000 by 2010. Large players, primarily US MTSOs with India presence
dominate the vendor space, accounting for almost 70% of the revenues and 65% of the
manpower in the industry.
Why US?
After thorough research it was found out that US is the best market for SWIFTshare due to the
following factors:
Only 50% as of the industry as of now gets outsourced. In this pie 10% is the share that
India has. However as things are going India will have a sharp rise in its share. The USA's
medical industry comprises of more than 750,000 physicians and 5,200 hospitals. USA witnesses
approximately 3.8 million in patient visits and 20 million outpatients visit on a daily basis.
Furthermore, the United States of America has the largest workforce i.e. one in every 11 US
residents employed in the health care business. Also the healthcare expenditure in USA is the
highest.
Introduction of EPR and EHR will keep the USA market afloat and much more vibrant
than other market.
USA Outsourcing of Medical Transcription
As of 2010, it was valued at USD 5.65 and it was growing at a CAGR value of 16.1%
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Indias expected share in the
As of 2010, India will have
presents itself a huge prospect
Source: NASSCOM
0
2
4
6
8
10
12
2010 2011 201
5.65162 6.5557.6
USA Med
647, 81
Market S
S medical transcription in 2010.
81% market share of the overall US off s
for India It service players in this field
2013 2014 2015
38.8196
10.2311.8669
cal Transcription Outsourcin
Market
USA MediOutsourci
153, 19%
are of US offshoring industr
oring market. Thus it
al Transcriptiong Market
India
Others
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India remained a preferred offshore destination primarily due to availability of manpower and
industry maturity.
Competitor Analysis
The competitors can be analyzed into three segments
Indian units of large US players - Typically comprise American companies or Medical
Transcription Service Organizations (MTSOs) who have successfully set up their transcription
centers in India. The large players include CBay, Spheris, Spryance, Acusis and Heartland.
These large players account for almost 70 percent of Indian medical transcription off shoring
revenues.
Mid-sized players - There are a number of medium sized players (< 500 employees) in India.
Most of them work as franchisees or vendors of the larger players and have limited marketing
presence in the US.
Smaller players - There are a large number of such small players with
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From the graphs the growth rates for the years 2001-03 for the both years are low due to the
slowdown in the economy due to the terrorist attack on the WTC and the fall of the information
technology.
Trends in the Growth Rate of Exports and Imports:
The growth rate trends in the imports and the exports are shown in the graph.
Imports Growth Rate for Chosen countries
Exports Growth Rate for Chosen countries
From the Graphs we can find that during the years 2001-03 and 2007-08 the growth rates in the
exports and imports had decreased. The main reason is due to the slowdown in the economy
8.95
4.78 4.90
2.16
6.85 7.05
9.63
-1.51-0.55
-6
-4
-2
0
2
4
6
8
1012
14
2000 2001 2002 2003 2004 2005 2006 2007 2008
Growth Rate in Imports for US
Growth rate in Imports for UK
-10
-5
0
5
10
15
2000 2001 2002 2003 2004 2005 2006 2007 2008
Growth Rate in Exports for USGrowth Rate in Exports for UK
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which affected the developed nations more. The decrease in the consumption in these countries
will have impact on other countries which reduces their trade with the developed nations, which
affects their BOP.
Trends in the Percapita GDP in current Prices in $
The trends show that the percapita GDP is increasing for both the countries. This will increase
the consumer spending, thus results in more trade for this countries.
Trends in the Exchange Rates
From the graph we can see that the Rupee has depreciated against the Euro but during the current
fiscal year the Rupee appreciated against the Euro due to the crisis in the Euro zone and the
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
2000 2001 2002 2003 2004 2005 2006 2007 2008
PercapitaGDP at Current prices forUS in$
PercapitaGDP at Current prices forUK
0
10
20
30
40
50
60
70
2000 2001 2002 2003 2004 2005 2006 2007 2008
Euro Vs RupeeDollar Vs Rupee
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Greece Debt crises. The depreciation of the rupee is good for our country as we are in the
exporting industry. The appreciation of the rupee in the recent months will affect our financial
position unless we hedge our exchange rate risk. We are going for futures for hedging our risk in
the exchange rates with the company Thomas Cook. The trend of the dollar is almost like a linear
trend, but we are considering the option of hedging the exports we made to US from the
exchange rate risks.
Trends in the Inflation Rates:
The change in the Inflation rates will affect the Exchange rates and the Interest rates in the
country. The countries having high inflation rate will try to reduce it by using the MonetaryPolicy, which uses the Interest rates as a Tool, which indirectly affects the decrease in the money
supply and the changes in the exchange rates. So the countries having the Inflation rate less and
stable will be better for choosing the country for doing business.
The graph below shows that the Inflation has decreased in the both the countries, this is
due to the recession where the consumer spending has decreased, so the Interest rates are
decreased in both the countries. This will increase the outflow of their currency, which causes
the appreciation of the India currency. But the Inflation in the US has increased to 6% in 2010,interest rates are increased. The outflow of $ decreased, so the Rupee depreciated with respect to
dollar. This will benefit the exporters.
3.4
2.6 2.7
4.4
1.1
2.8
3.2
4.2
3.6
2.3
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
2005 2006 2007 2008 2009
Inflation Rate in US
Inflation Rate in UK
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UK- Degree of Regionalization of trade:
The degree of regionalization of trade is very high for UK as we can see lot of RTAs has beensigned and some are under negotiations. The RTAs confirmed are EU-Chile, EU-Mexico, EU-
European Free Trade Area, and EU-South Africa.
The ongoing negotiations for RTAs are
EU and the Gulf Cooperation Council (GCC), comprising of Bahrain, Kuwait, Oman, Qatar,
Saudi Arabia, and the United Arab Emirates (UAE),
EU and Mercosur (Argentina, Brazil, Paraguay and Uruguay, and Venezuela which joined thegroup on 4 July 2006),
EU and its Mediterranean Partners (Morocco, Algeria, Tunisia, Egypt, Israel, Jordan, the
Palestinian Authority, Lebanon, Syria, Turkey)
EU and the Association of South East Nations (ASEAN), comprising of Philippines, Indonesia,
Malaysia, Singapore, Thailand, Brunei, Vietnam, Laos, Burma, and Cambodia,
EU and Korea, and the EU and India.
US- Degree of regionalization is high in US, because we can see lot of agreements internally and
externally of USA. USA has a separate office to maintain trade relations with Western
Hemisphere of world. Some of the following are the RTAs signed by USA
Israel- FTA signed in 1985
Jordan- FTA signed in 2001
Morocco- FTA signed in 2006
North American Free trade Agreement signed in 1994.
Chile-FTA signed in 2004
Colombia FTA signed in 2006
Dominican Republic Central America FTA signed in 2004
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Economic Facts
Macroeconomic Factors:
ECONOMIC
INDICATOR
UNIT
AME
YEAR 2008
Values in dollars
GDP in Trillion $(PPP) 14.52
GDP Growth rate 0%
GDP percapita Income 47700Unemployment Rate 5.80
Inflation Rate 3.80
Central Bank Interest
Rates
0.86
Commercial Bank
lending rates
5.09
The graph for the GDP in pur
From the graph it is fo
due to the recession in the 20
0
2
4
6
8
10
12
14
16
2008
ED STATES OF
ICA
UNITED KINGDOM
2009 2008 2009
14.14 2.238 2.128
-2.60% -0.10% -4.90%
46000 36700 348009.30% 5.60% 7.60%
-0.30% 3.60% 2.20%
0.50% 0.86% 0.50%
4.63%
hasing power parity is as shown:
und that the GDP in PPP had fallen for Both
8-09. This has increased the unemployment
2009
INDIA
2008 2009
3.324 3.57
7.20% 7.40%
2900 310010.40% 10.70%
8.30% 10.90%
6% 4.75%
13.31%
the US & UK. This is
rate which led to take
GDP in PPP for US
GDP in PPP for UK
GDP in PPP for India
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protective steps by those countries for increasing the Employment in their countries. US have
increased the Fees for the H1B1 visa people and they are providing Tax benefits that will reduce
the outsourcing and produce jobs for their country. This will impact the Developing countries
which has huge outsourcing projects from US.
The decrease in the percapita income will reduce the purchasing power of the consumers;
this in turn will affect the economy which is in recession. In order to increase the domestic
consumption the central banks of the US, UK and all over the world as reduced the interest rates.
Balance of Payments
ECONOMIC INDICATOR UNITED STATES OF
AMERICA
UNITED
KINGDOM
INDIA
YEAR 2008 2009 2008 2009 2008 2009
Amount in Billion $
Trade Account -840 -517 -50.4374 -128.7 -120 -58
Current Account -706.1 -419.9 -32.5884 -32.68 -12.03 -28.7
Capital Account 271.708 496.865 27.8109 11.5648 10.5 8.7
Reserves 77.65 130.8 52.98 66.72 254 275
From the Table we can find that all the three countries are having a trade deficit. The
countries are having good Financial/Capital account. They attract huge amount of the FDI into
the countries. The trade deficit will affect the Exchange rates. Since the dollars, euro goes out
more there is chance of these currencies get depreciated in the long run, which in turn appreciate
the exporting country currency and reduces the exports of India, thus bring into equilibrium.
Exchange Rates
The currencies of the countries where we are exporting our services are Dollar and Euro.
The UK clients can also make payments in Great Britain Pound. But most of the payments are
made either in Dollars or Euros. The exchange rate of our country is a Dirty float where the
exchange rates are determined by the market supply and demand, RBI intervention.
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The fluctuations in Exchange Rates will affect the profits of our company as we are doing
the outsourcing business to the clients in the US & UK. The payments will be made in Dollars or
in Euros. Since we have risk of rupee appreciating we will go for hedging where we buy the
futures to amount that we are expected to get from our clients. The different types of futures
available are EURINR, GBPINR (Great Britain Pound), USDINR. This will reduce the risk to
some extent. We also go for contracts with the customers so that the risk of the rupee
appreciating or depreciating will not effect for budgeted income projections. We have financial
analysts who will give projections that will benefit the company.
Year 1Euro=Rs 1US$=Rs
2000 41.40554 44.94161
2001 42.2246 47.18641
2002 45.74866 48.61032
2003 52.57504 46.58328
2004 56.26823 45.31647
2005 54.84253 44.09998
2006 56.83689 45.30701
2007 56.59241 41.34853
2008 63.72755 43.50519
2010 59.8325 45.705
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The exchange rate movement for Dollar and Euro are shown in the above Graph.
From the table we can see that the Euro has depreciated in the last two years, the reason
is due to the uncertainty in the European economy and due to the debit crisis in Greece.
Foreign Trade
Foreign Trade UNITED STATES OFAMERICA
UNITEDKINGDOM
INDIA
YEAR 2008 2009 2008 2009 2008 2009
Amount in Billions $
Exports(Goods and Services) 1277 1046 467.3 357.3 203.1 164.3
Imports(Goods and Services) 2117 1563 641.3 486 323.9 268.9
From the Table we can see that the three countries are having a trade deficit, where theyare importing more than the exports they made. This will lead to more requirement of foreign
currency to buy those products which will depreciate the rupee. The decrease in the trade for all
the three countries is due to the recession which reduced the consumption or purchasing of the
customers. The decrease in the consumption will further deepen the economy and leads to great
depression. In order to prevent that the central banks all over the world has decreased the interest
rates, that will make the people to spend more than to save.
0
10
20
30
40
50
60
70
2000 2001 2002 2003 2004 2005 2006 2007 2008
Euro Vs Rupee
Dollar Vs Rupee
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Major Exports (Goods and Services)
US UK India
Agri products Manufactured
Goods
Petroleum Products
capital Goods Fuels Precious Stones
consumer goods food and
Beverages
Machinery
industrial supplies Chemicals Iron Ore and Steel
telecommunication equipment Tobacco Chemicals & Pharmacy
Textile &apparelSoftware products
The major imports for the countries are shown below:
Major Imports (Goods and Services)
US UK India
Agri products Manufactured Goods Crude oilcapital Goods Fuels Precious Stones
consumer goods food and Beverages Machinery
industrial supplies Machinery Fertilizers
Chemicals
Iron & steel
The major trading partners for these countries are as shown in the graphs:
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UK EXPORTS MAJOR TRADING PARTNERS
UK IMPORTS MAJOR TRADING PARTNERS
14.24%
11.12%
19.30%
6.14%4.53%
44.67%
Canada
Mexico
China
Japan
Germany
others
14.24%
11.12%
19.30%
6.14%
4.53%
44.67%
Canada
Mexico
China
Japan
Germany
others
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US EXPORTS MAJOR TRADING PARTNERS
US IMPORTS MAJOR TRADING PARTNERS
From the both the country details about their major trade partners China plays an
important role in these two countries imports. The major trade partners the UK are from the
European Union. The Trade for the US is majorly from their Trade partners from the NAFTA
trade agreement. The RTA has been playing an important role in the trade for these two
countries.
The different trade agreements for the US are NAFTA, APEC (Asia-Pacific Economic
Cooperation Forum), Transatlantic Economic Partnership (TEP) with the European Union.
14.24%
11.12%
19.30%
6.14%4.53%
44.67%
Canada
Mexico
China
Japan
Germany
others
14.24%
11.12%
19.30%
6.14%4.53%
44.67%
Canada
MexicoChina
Japan
Germany
others
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UK- Degree of Regionalization of trade:
The degree of regionalization of trade is very high for UK as we can see lot of RTAs has beensigned and some are under negotiations. The RTAs confirmed are EU-Chile, EU-Mexico, EU-
European Free Trade Area, and EU-South Africa.
The ongoing negotiations for RTAs are
EU and the Gulf Cooperation Council (GCC), comprising of Bahrain, Kuwait, Oman, Qatar,
Saudi Arabia, and the United Arab Emirates (UAE),
EU and Mercosur (Argentina, Brazil, Paraguay and Uruguay, and Venezuela which joined thegroup on 4 July 2006),
EU and its Mediterranean Partners (Morocco, Algeria, Tunisia, Egypt, Israel, Jordan, the
Palestinian Authority, Lebanon, Syria, Turkey)
EU and the Association of South East Nations (ASEAN), comprising of Philippines, Indonesia,
Malaysia, Singapore, Thailand, Brunei, Vietnam, Laos, Burma, and Cambodia,
EU and Korea, and the EU and India.
US- Degree of regionalization is high in US, because we can see lot of agreements internally and
externally of USA. USA has a separate office to maintain trade relations with Western
Hemisphere of world. Some of the following are the RTAs signed by USA
Israel- FTA signed in 1985
Jordan- FTA signed in 2001
Morocco- FTA signed in 2006
North American Free trade Agreement signed in 1994.
Chile-FTA signed in 2004
Colombia FTA signed in 2006
Dominican Republic Central America FTA signed in 2004
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Degree of globalization
Globalization involves the diffusion of ideas, practices and technologies. It issomething more than internationalization and universalization. It isn't simply modernization or
westernization. It is certainly isn't just the liberalization of markets. It is about the change and the
way we understand geography and experience localness.
Globalization, thus, has powerful economic, political, cultural and social dimensions.
Economic Globalization
Political Globalization
Social Globalization.
For US:
American companies have migrated most of their manufacturing jobs to foreign countries
where it is cheaper to do business. The service and technical jobs are currently undergoing a
large exodus to foreign labour too. This is the outsourcing and off shoring which is a major
driver in US nowadays. The economic interconnection has increased which made someperipheral political changes and countries have become even more dependent on the big central
economies such as the USA where the capital and technical expertise tend to be located. The
shift in power from the nation state and multinational corporations is happening. The
globalization is also on an increasing note. It is because some large corporations and
organizations operate across many different countries and they have also developed and
marketed products that could be sold as well in US. Superior brands like Adidas, Nike, Sony, etc.
have become part of the fabric of vast numbers of people's lives.
The degree of globalization can be measured by three factors:
Economic Globalization
Trade Agreements can create opportunities for Americans and help to grow the U.S.
economy. The USTR has principal responsibility for administering U.S. trade agreements. The
United States is Member of the World Trade Organization and the Marrakesh Agreement
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Establishing the World Trade Organization. The United States and other WTO Members are
currently engaged in Doha Development Round of world trade talks. The United States has free
trade agreements with 17 countries. These FTAs build on the foundation of the WTO which is
more comprehensive.
The Trade and Investment Framework Agreement is one of the important agreements
made. TIFAs provide frameworks and methodologies for resolving trade and investment issues
at the initial stages. These agreements are also a means to identify and work on capacity
building. NAFTA created the world's largest free trade area linking 444 million people
producing $17 trillion worth of goods and services. The trade started between the United States
and its NAFTA partners since the agreement was made.
The United States has $735 billion in total (two ways) goods trade with NAFTA
countries namely Canada and Mexico during 2009. Goods exports totaled $334 billion; Goods
imports totaled $401 billion. The US economic growth during the 14 years of NAFTA has been
strong. The different sectors like employment, Investment, manufacturing, etc. started growing at
a good pace.
Political Globalization:
For US:
In the 21st century, the United States of America has become the dominant system of
political organization worldwide and the vast majority of the global population now lives in this
nation. The globalization is serving as a counter balance to nationalism which has some benefits
and disadvantages.
The nation and the forces of nationalism represent competing paradigms on the one handwith the nationalism creating cohesion of shared cultural identity. But on the other nationalism
factors the conflict increases with other nations based on competition for resources. The political
Globalization of the US depends on the interests and improvements shown towards the APEC
and the G8. APEC acts on forging an interconnected Asia Pacific. APEC created a transitional
membership category that allowed the U.S. to join the scheme even though it does not meet all
the criteria of the APEC Business Travel Card.
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Social Globalization :
The ranking for the United States in the Globalization index is 27.
For UK:
Economic Globalization:
There has been a rapid growth in the number of regional trade agreements [RTAs] in
recent years. In Europe, these are mainly centered on the European Union, spreading to the
Central and Eastern European countries. The DFID/BIS Trade Policy Unit maintains bilateral
relations with the world through two processes:
As a member of the European Union, the UK is party to the EU Regional Trade
Agreements (RTAs), which are negotiated by the European Commission with another country or
trading bloc with the aim to enter into a preferential trading arrangement with each other.
The UK also engages with third countries, which are not part of the EU, and non-EU
regional groupings with the aim of developing open and competitive markets for UK countries.
The Trade Policy Unit leads on both the engagement with third countries and represents the UK
in the EU regional trade agreements.
Working primarily from within the EU, its efforts will be vital to the maintenance of
progress in multilateral trade negotiations. The distribution by demographics on this issue follows
previously reported patterns on other questions. Men [50%] are more likely to think the UK
benefits than women [42%], and the younger the person, the greater the likelihood they think the
UK benefits.
The terms and ways to shift the activities with global market forces are represented fromAPEC to the EU. Within the interstices of this system operate the social groups of an emerging
transnational civil society, from the International Chamber of Commerce to the Jubilee 2000
campaign, seeking to promote, contest and bring to account the agencies of economic
globalization. Economic globalization has been accompanied by a significant internationalization
of political authority associated with a corresponding globalization of political activity.
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Political Globalization:
The political globalization of the United Kingdom is based on the two fundamentaltransformations that have shaped the constitution of contemporary political life. The first of these
involved the development of territorially based political communitys i.e. Modern nation states.
The second transformation is that it has led to a break in the exclusive link between geography
and political power namely the institutionalization of a fragile system of multilayered global and
regional governance. It has also instigated new forms of multilateral, regional and transnational
politics.
The OECD is home to the Development Assistance Committee and the EconomicsDepartment of the OECD has two work streams namely country reviews and cross cutting macro-
economic and structural analysis. The Delegation is most involved in the country work, and plays
an active role in the examination of the UK economy, as well as the peer review process of the
Economic Development Review Committee [EDRC].The UK is about to host the G8 event in
2013 which will further develop the relations of its resources and trades with many countries.
The ranking for the United Kingdom in the Globalization index is 24.
Political and Legal System
System of Governance
The Government type in US and India are Federal Republic where as in UK it is
constitutional Monarchy. The all three countries are democratic and the representatives of the
state for US are elected for every 4 years. The senators will be elected for every 6 years. The
head and chief of the state for US is the President Barack H.Obama. The chief of the state for
UK is queen Elizabeth II, the head of the government is the Prime Minister David Cameron. Thechief of India is President and the head of the government is the prime minister.
Political stability for past two years
The political system in the US has changed when the Democratic Party candidate is
elected as the President. The US president has promised to stop the war against Iraq and bring
the soldiers to their country. The senator elections are going to be held in the November of this
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year where exist polls are saying that the Republican Party will gain most of the states. The
country has started taking protective measure that will affect the outsourcing firms outside US in
order provide more jobs for their people as the unemployment rate is at 10%. In UK the
Conservative party has came into power during the current year.
The two countries are rated on stability of the government basing on three factors like
Government cohesion, Legislative strength and popular support done by PRS group. In which
the UK and US has rated like 6 and 9.
Legal system in operation
The legal system in the US, UK and the India is based on the common law. But in US
each state has its own legal system which is based on common law. The UK is based on the
Roman and modern continental influences. In India separate personal law codes apply to
Christians, Hindus, and Muslims.
System of Governance
United Kingdom United States of America
System of Governance Constitutional Monarchy Presidential
Current Head of State Queen Elizabeth II Obama
Political Stability in past 2yrs Stable Stable
Legal System in Operation Common Law Federal Law
IPR regime Strong Strong
Degree of Protection offered to
Foreign Investors
High, Rank -10 High, Rank -5
Ease of doing Business in the
Country
Rank- 5 around the world Rank- 4 around the world
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CULTURAL HIGHLIGHTS
United Kingdom
Language
English is the common language used in United Kingdom but it should be noted that Queens
English and American English are different.
Major languages spoken
Wales: People in Wales speak a completely different language. About 25% of the people there
still speak in their native Celtic tongue called welsh.
Scotland: In some regions of Scotland, Gaelic is used as a first language
Northern Ireland: In Northern Ireland about 7% speak Irish according to the 2009 census report
Ethnic Composition of UK
Religion
Britain is a multi faith society in which everyone has the right to religious freedom.
Although Britain is historically a Christian society, people are usually very tolerant towards the
faiths of others and those who have no religious beliefs.
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The main religion in Britain is Christianity. Most Christians belong to the Church of
England or the Church of Scotland. These are Protestant Churches. There are also many Roman
Catholics.
Although religious faith in Britain is predominantly Christian, most of the worlds religions are
also practiced. There are large Hindu, Jewish, Muslim and Sikh communities, and also smaller
communities of Bah, Buddhists.
Religion in daily life
In UK its found in a survey that though most people claim they are religious they admit
that they dont practice it in a proper manner. Those who do profess religion in the UK are
largely inactive.
United States
Language
The official language spoken wide over United States is English.
Major languages spoken in US
Spanish has continued to be the non-English language most commonly spoken at home at
29.1 million speakers. Chinese has moved from fifth place to become the second most widely
spoken non-English language. Of the twenty non-English languages most frequently spoken at
home, Russian showed the largest proportional increase, nearly tripling from 242,000 to 706,000.
The second largest increase was for French Creole speakers --a group that includes Haitian
Creoles -- who more than doubled from 188,000 to 453,000. The number of Vietnamese
speakers doubled over the decade as well, from about 507,000 to just over 1 million.
Source: U.S. Census Bureau.
Ethnic Composition
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Major Religion
The majority of Americanscatholic denominations. Ther
and Judaism, Islam. There
religious belief or no religiou
Importance of Religion in d
Christians generally claim t
difficult times and other crisi
claim that it has its affects in t
religious country. "Its first Ch
doing and why," At the heart
go to church.
The importance, prominence,
identify themselves as Christians, mostlyare also Non-Christian religions including
re also people who identify themselves a
affiliation.
ily life
at religion makes a difference in their liv
s experience. Those who are more committ
heir life orientation and daily activities. Am
ristian inhabitants were only too anxious to
of religious practice is prayer: Americans pr
and conspicuousness
within protestant andBuddhism, Hinduism,
not involved in any
s at times of illness,
ed to the religion also
rica has always been a
xplain what they were
y even more than they
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Intersection of Religion and State
Differing religious traditions and denominations tend to dominate historically in specific states,and religious groups have significantly different patterns of religious intensity among their
adherents. The states have differing racial and ethnic compositions, which in turn are associated
with differing degrees of religiosity. Certain states may attract in-migrants with specific types of
religious intensity. In addition, there may be differing "state cultures" that are themselves
associated with life approaches that give varying degrees to religion as a guiding force.
Cultural Highlights
United Kingdom United States of America
Language
Official Language for doingBusiness English ( UK) English (USA)
Ethnic Composition
White-92.1%
Mixed Race -1.2%
Others 6.7%
Non-Hispanic Whites 68%
Hispanic 15%
Non- Hispanic Blacks 12%
Asian American 5%Major Languages Spoken English (UK) English(USA)
Major Religions
Different Religions BeingPracticed
Christian 71.6%
No Religion -15.5%
Others 12.9%
Christian 82.3%
Atheist 11.6 %
Judaism 2.2%
Others 3.9%
Importance of Religion indaily life Moderate Moderate
Holidays and Festivals
Official rest days for the week Saturday and Sunday Saturday and Sunday
Important Festivals Christmas, Good Friday,EasterChristmas, Good Friday,Easter
Non Working Holiday Season December- January December- January
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Business Culture
Hofstede Dimension
United Kingdom United States of America
Power Distance Index Medium Medium
Individualism Very High Very High
Masculinity High High
Uncertainty Avoidance Index Medium Medium
Long Term Orientation Low Low
Very High 100- 81; High 80-61; Medium 60- 41; Low- 40- 21; Very Low 20-1;
Entry Choice Analysis
Global Market for Medical Transcription Industry
The global market size of Medical Transcription Industry is USD 25 billion in 2010. It has a
CAGR value of 15%. A projected growth rate of the global Medical transcription market can be
shown below
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Source: Slideshare.com
Number of Employees in the
The current employee streng
52000 by 2010. Large player
space, accounting for almost
Why US?
After thorough research it wa
following factors:
Only 50% as of the industry
has. However as things are g
industry comprises of more
approximately 3.8 million in
Furthermore, the United Stat
residents employed in the he
highest.
0
10
20
30
40
50
60
2010 2011 201
Global Mar
medical transcription sector in India
th of India-based medical transcription ven
s, primarily US MTSOs with India presenc
0% of the revenues and 65% of the manpow
s found out that US is the best market for S
as of now gets outsourced. In this pie 10%
oing India will have a sharp rise in its shar
than 750,000 physicians and 5,200 hos
patient visits and 20 million outpatients
es of America has the largest workforce i.
alth care business. Also the healthcare exp
2013 2014 2015
et for Medical Transcription
(in USD billion)
Global MaTranscriptibillion)
dors is approximately
dominate the vendor
er in the industry.
WIFTshare due to the
is the share that India
e. The USA's medical
itals. USA witnesses
isit on a daily basis.
. one in every 11 US
nditure in USA is the
ize
rket for Medicalon size (in USD
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Introduction of EPR and EH
other
USA Outsourcing of Medic
As of 2010, it was valued at
Indias expected share in the
As of 2010, India will have
presents itself a huge prospect
0
2
4
6
8
10
12
2010 2011 201
5.65162 6.5557.6
USA Med
R will keep the USA market afloat and m
l Transcription
SD 5.65 and it was growing at a CAGR valu
S medical transcription in 2010
81% market share of the overall US off s
for India It service players in this field
2013 2014 2015
38.8196
10.2311.8669
cal Transcription OutsourcinMarket
USA MediOutsourci
ch more vibrant than
market.
e of 16.1%
oring market. Thus it
al Transcriptiong Market
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Source: NASSCOM
India remained a preferred
and industry maturity.
Competitor Analysis
The competitors can be analy
Indian units of large US
Transcription Service Organi
centers in India. The large
These large players account
revenues.
Mid-sized players - There a
Most of them work as franch
presence in the US.
Smaller players - There are
players are subcontractors to t
647, 81
Market S
offshore destination primarily due to ava
ed into three segments
players - Typically comprise American c
zations (MTSOs) who have successfully set
layers include CBay, Spheris, Spryance,
for almost 70 percent of Indian medical tr
e a number of medium sized players (< 50
isees or vendors of the larger players and h
a large number of such small players with
he other two groups and suffer from unreliab
153, 19%
are of US offshoring industr
lability of manpower
ompanies or Medical
up their transcription
cusis and Heartland.
nscription off shoring
employees) in India.
ave limited marketing
50 employees. These
le revenue flows.
India
Others
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SWIFTshare falls right now on the second category the middle sized companies. It has to
compete with these mid-sized players. SWIFTshare started as a franchisee itself of Heartland but
now has become an independent unit and is looking to venture into.
CAGE MODEL
CULTURE DIFFERENCE
US are a society where there is large number of migrants. Most of the peoples ancestors
are from the other part of the world. US and India both are the colonies of the Great Britain. So
many of the cultures of the US and India can be matched to some extent to that of US. English is
common language between the countries will give a greater advantage to our company. In US
the time is very important where as in India there is no much punctuality followed; this is not the
case in US. They will treat people who are punctual as good and reliable. Since India had been a
colony for UK the people will know their culture.
ADMINISTRATIVE DIFFERENCES:
US and UK has imposed many restrictions on outsourcing industry around the world.
Recently the Ohio state in US has made a law that will prevent the outsourcing of thegovernment contracts to other countries. The President of US has made a statement that there
will be tax benefits to those companies that do not outsource to other countries, but generate jobs
to local people. The American government has increased the fees for the H1B1 visa for funding
the boarder construction that will prevent the illegal immigrants from the bordering countries.
These laws will impact our company where many of our workers go on H1B1 visas for
demonstrating the work done by our company. The US and UK are 3 rd, 4 th largest investors in
our country. The FDI investments made by Indian companies in US include sectors like Oil andGas, computer software services. The FDI made by Indian companies in US include sectors like
Iron and steel, computer software services, automobiles.
GEOGRAPHY
Location: Western Europe, islands including the northern one-sixth of the island of Ireland
between the North Atlantic Ocean and the North Sea, northwest of France.
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Climate:
Current whether: Temperate; moderated by prevailing southwest winds over the North AtlanticCurrent; more than one-half of the days are overcast.
Climate issues:
The world is warming up. As there is burn up the planets coal, oil and gas reserves, and
cut down its remaining forests, greenhouse gases are pouring into the atmosphere. The delicate
balance of atmospheric gases that sustains life is thickening, trapping more and more heat and
irreversibly changing our world.
For all the technological gloss of the 21st century, the UK is still living in an industrial
era, pumping out emissions from coal, oil and gas. Worse, the energy is supplied through a
criminally wasteful, centralized energy system; two thirds of all energy generated in UK power
stations is lost as waste heat up the chimney and along transmission lines. But there are clean,
affordable and proven solutions for the most polluting sectors: electricity, transport, industry and
domestic.
Geography Distance
It's about 5000 miles approximately from London, England, to New Delhi, India. The
geographical has its impact on trade between India and UK, the transportation and travel cost has
always made a negative impact in the trade between the countries.
Time zone: The time difference between and India and UK is 4 hours and 30 minutes.
Geographic Distance
US are approximately 9000 miles away from Mumbai, India. The geographic distance
between the countries is so high that small trades will result in a negative impact. The main mode
of transports is airways and shipping.
Impact of Climate
Over the 20th century, the northern portion of the Midwest, including the upper Great Lakes, has
warmed by almost 4F, while the southern portion, along the Ohio River valley, has cooled by
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about 1F. Annual precipitation has increased, with many of the changes quite substantial,
including as much as 10 to 20% increases over the 20th century.
Time Zone: The time zone difference between India and US is 11.5 hours.
The US has world largest Coal reserves, this will benefit the Indian thermal power plants
and iron & steel companies that are looking for overseas investments. Since India a few coal
fields for generating the power the companies should acquire the raw material from other
countries. Recently the Indian companies are acquiring the Sheal gas fields that will provide
natural gas for many companies. The UK has natural resources like iron ore so many companies
like Tata Steel has brought Corus to gain the advantage of the raw materials.
Since our company is focusing on the providing services the business will not be effected
by any cyclic changes. The geographic distance doesnt play an important role in our business as
we get the data through the internet cables under the sea and only effect is while exporting the
documents the distance matters. The changes in the climate will not affect the business.
ECONOMIC DISTANCE:
US and the UK are the developed nations, but during the recession the growth rates of these countries had showed negative growth rate. The effect of these economies will seriously
affect our profits. As almost 90% of the turnover of our company will be coming from the US
and UK combined, so any change in the economy of these countries will affect our company
profits. In order to safe guard from such risks we are planning to decrease the contribution from
these countries and focus in our own country. The trade deficits for US and UK will impact the
exchange rates, the interest rates in those countries. If interest rates goes up in those countries the
spending by the companies and the customers will decrease. This will lead to less outsourcing by
the pharmacy to oversee as cost cutting measures.
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Country Risk Assessments
i) Political
1. Consumer attitude
The consumer attitude for both US and UK stands at 2.5 and hence both are same. The consumer
attitude remains same as that of India.
2. Government attitude
The government attitude for US is 4.0 and UK is 2.5 and hence US is better than UK.
3. Bureaucracy and corruption
The bureaucracy and corruption in US is higher than that of UK.
4. Political stability
The political stability for US is much higher than that of UK.
5. Religious stability
Both the countries have Christianity as their major religion and hence both are stable.
6. Wars
US are much posed to wars with other countries unlike UK which doesnt wage war.
7. Resistance to globalization
The US is known for its research and development and hence introduce new technology products
than UK. US spend billions of dollars for R & D and hence both countries dont have much
resistance to globalization.
ii) Economic
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3. Foreign debt service as % of exports of goods and services
The foreign debt service as % of exports of goods and services for India is 5.3, for UK is 2.7 andfor US is 2.2. Here we can see that the foreign debt service for India is double than that of UK.
4. Official reserves of months of import cover
The official reserves of months of import cover for India is 17.3 and for UK is 1.0 and for US is
0.1. It shows us that the US official reserves of months of import cover are 10 percent of UK
official reserves of month of import cover.
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