[international business]apollo hospitals
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APOLLO HOSPITALSFIRST-WORLD HEALTH CARE at EMERGING-MARKET PRICES
INTERNATIONAL CONSULTING
CONTENTSCONTENTS
Issue DefinitionEnvironment Analysis
Strategy OptionsStrategy Choice
Action Plan
ISSUE DEFINITIONISSUE DEFINITION
ISSUE DEFINITIONISSUE DEFINITION
1
Apollo Hospitals Group faced ample opportunities.But which strategies were most promising?
Integrated Health Care Delivery Networks
International Hospital Management
Medical Tourism
ENVIRONMENT ANALYSISENVIRONMENT ANALYSIS
ENVIRONMENT ANALYSISENVIRONMENT ANALYSIS
2
Treating patients from more than 50 countries
Share in the tertiary care market stood at 14% in India
35% share in the market for private tertiary care
1. Internal Environment - Apollo Group
ENVIRONMENT ANALYSISENVIRONMENT ANALYSIS
3
1. Internal Environment - Local Competitors
ApolloHospitals
ManipalGroup
FortisHealthcare
Ltd.
33 hospitals 11+7 hospitals4 hospitals
(10 hospitals)
6400 beds 6000 beds600 beds
(4000 beds)
ENVIRONMENT ANALYSISENVIRONMENT ANALYSIS
4
Indians spent 5.2% of GDP on health care(less than South Koreans 6.7% and Brazilians 6.5% but more than China 2.7%)
2. Local Environment
ENVIRONMENT ANALYSISENVIRONMENT ANALYSIS
5
4%
7%
10%
13%
16%
2000 2001 2002 2003 2004
Total Expenditure on Health, %GDP
US France Canada UK Korea
ENVIRONMENT ANALYSISENVIRONMENT ANALYSIS
6
Only 15% of the Indian population was covered by insurance
2. Local Environment
ENVIRONMENT ANALYSISENVIRONMENT ANALYSIS
7
25%
50%
75%
100%
US Canada France UK Korea
Public expenditure on health, % total expenditure on health in 2004
ENVIRONMENT ANALYSISENVIRONMENT ANALYSIS
8
Total expenditure on health has increased constantly
3. Global Environment
ENVIRONMENT ANALYSISENVIRONMENT ANALYSIS
$1,775
$3,350
$4,925
$6,500
2000 2001 2002 2003 2004
Total expenditure on health, Per capita US$ PPP
UK Canada France US Korea
9
ENVIRONMENT ANALYSISENVIRONMENT ANALYSIS
India has a competitive advantage in the Health Care Cost
3. Global Environment
10
ENVIRONMENT ANALYSISENVIRONMENT ANALYSIS
11
$6,000
$12,000
$18,000
$24,000
$30,000
US UK Malaysia Singapore Thailand India
$6,000$7,500$8,000
$9,000
$27,000$26,000
Global Cost Differences for Cardiac Surgery(US$)
ENVIRONMENT ANALYSISENVIRONMENT ANALYSIS
12
$32,000
$64,000
$96,000
$128,000
$160,000
H/V Replacement Heart Bypass Angioplasty Gastric Bypass Hip Replacement Knee Replacement
$8,500$9,000$11,000$11,000$10,000$9,500
$40,640$43,780$47,988
$57,262
$122,424
$159,326
Health Care Cost Differences between US and India(US$)
USIndia
ENVIRONMENT ANALYSISENVIRONMENT ANALYSIS
13
ENVIRONMENT ANALYSISENVIRONMENT ANALYSIS
Apollo Hospitals Group is dominant company in the India tertiary care market.
13
But there are number of competitors in the market for privately-provided tertiary care.
And Indians spend most of health care expenditure(64%) in their pocket directly without public support.
ENVIRONMENT ANALYSISENVIRONMENT ANALYSIS
Apollo Hospitals Group is dominant company in the India tertiary care market.
13
But there are number of competitors in the market for privately-provided tertiary care.
And Indians spend most of health care expenditure(64%) in their pocket directly without public support.
Growth Limits of Domestic Health Care Market in short-term view
ENVIRONMENT ANALYSISENVIRONMENT ANALYSIS
Apollo Hospitals Group is dominant company in the India tertiary care market.
13
But there are number of competitors in the market for privately-provided tertiary care.
And Indians spend most of health care expenditure(64%) in their pocket directly without public support.
Growth Limits of Domestic Health Care Market in short-term view
Global Total expenditure on health %GDP has increased constantly.
Also, Global Total expenditure on health per Capita has increased.
And, India has a competitive advantage in the Health Care Cost.
ENVIRONMENT ANALYSISENVIRONMENT ANALYSIS
Apollo Hospitals Group is dominant company in the India tertiary care market.
13
But there are number of competitors in the market for privately-provided tertiary care.
And Indians spend most of health care expenditure(64%) in their pocket directly without public support.
Growth Limits of Domestic Health Care Market in short-term view
Global Total expenditure on health %GDP has increased constantly.
Also, Global Total expenditure on health per Capita has increased.
And, India has a competitive advantage in the Health Care Cost.
Opportunity of Global Health Care Market for Apollo Hospitals
STRATEGY OPTIONSSTRATEGY OPTIONS
STRATEGY OPTIONSSTRATEGY OPTIONS
14
Integrated Health Care Delivery Networks
International Hospital Management
Medical Tourism
STRATEGY OPTIONSSTRATEGY OPTIONS
15
Advanced Health Care technology and a huge cost advantage
Intellectual Property(Human resources and Managing Know-how)
Apollo intended to pursue an asset-light strategy
STRATEGY CHOICESTRATEGY CHOICE
STRATEGY CHOICESTRATEGY CHOICE
16
Integrated Health Care Delivery
Network
International Hospitals
Management
MedicalTourism
Pharmacy NetworkThe group operated the largest
pharmacy network(40% of profits)
Colombo HospitalDominant Position in Sri Lanka
InternationalConsulting & Project(33% of consulting revenue)
SITACAREwww.SITACARE.com One-Stop Shop(200 offices in India, 7 offices in EU)
Domestic Market Strategy
Integrated Health Care Service
Financial Risks
Cost Advantage in Global
Using Human Resource andIntellectual Property
Asset-Heavy Strategy
Cost Advantage in Global
Using Intellectual Property
Lack of Infrastructure
Less Market Dominance
STRATEGY CHOICESTRATEGY CHOICE
17
Domestic Health Care Market faced Growth limitation but Global Health Care Market is growing up
STRATEGY CHOICESTRATEGY CHOICE
17
If Apollo concentrate on the IDN or the property of the abroad hospitals, they have to invest more and it would be against group which pursuit asset-light strategy.
Domestic Health Care Market faced Growth limitation but Global Health Care Market is growing up
STRATEGY CHOICESTRATEGY CHOICE
17
If Apollo concentrate on the IDN or the property of the abroad hospitals, they have to invest more and it would be against group which pursuit asset-light strategy.
Therefore, Apollo need to concentrate on the medical tourism using advantages of health care technology and cost,
and abroad hospital operation management using their human resources and intellectual property.
Domestic Health Care Market faced Growth limitation but Global Health Care Market is growing up
STRATEGY CHOICESTRATEGY CHOICE
18
Cooperation U-Health International Clinic
Operation Management
Time
Global Medical Tourism
After-Care Infrastructure
Medical Tourism in India
Strate
gy
ACTION PLANACTION PLAN
ACTION PLANACTION PLAN
19
Short-Term Strategy
Medical Tourism
How can we make foreign patients?
Mid-Term Strategy
After-care Infrastructure
How can we structure After-care Infra most efficiently?
Long-Term Strategy
Global Medical Tourism
How can we make dominance in the Global Medical Tourism Market?
1. Strategy Goal
ACTION PLANACTION PLAN
20
2. Medical Tourism - Segments Choice
Members of 20 million Indian diaspora
Countries with rationed(EU Nations including UK, Canada)
The Legions of uninsured in the United States
Patients from regional markets in which top-
quality were hard to find
21ACTION PLANACTION PLAN
21ACTION PLANACTION PLAN
ACTION PLANACTION PLAN
22
2. Medical Tourism - Segments Choice
Members of 20 million Indian diaspora
Countries with rationed(EU Nations including UK, Canada)
The Legions of uninsured in the United States
Patients from regional markets in which top-
quality were hard to find
ACTION PLANACTION PLAN
22
2. Medical Tourism - Segments Choice
Members of 20 million Indian diaspora
Countries with rationed(EU Nations including UK, Canada)
The Legions of uninsured in the United States
Patients from regional markets in which top-
quality were hard to find
ACTION PLANACTION PLAN
23
2. Medical Tourism - US
30
35
40
45
2000 2001 2002 2003 2004
Population in the US without Health Insurance(millions)
ACTION PLANACTION PLAN
24
2. Medical Tourism - US
The Legions of uninsured in the United States
43 million Americans under the age 65 had no health Insurance
Everyday about 8 million of American search the internet for the medical informations .
About 53% of them find it useful for their life.
About 22% of users find it hard to search web effectively.
Source : www.dt.co.kr
ACTION PLANACTION PLAN
24
2. Medical Tourism - US
The Legions of uninsured in the United States
43 million Americans under the age 65 had no health Insurance
Everyday about 8 million of American search the internet for the medical informations .
About 53% of them find it useful for their life.
About 22% of users find it hard to search web effectively.
Source : www.dt.co.kr
Web-based One-Stop Shop
ACTION PLANACTION PLAN
25
2. Medical Tourism - US
Cooperate with MSN
Web-based One-Stop Shop MSN Health Care Service
Use MSN Messenger for U-Health
Provide Informations by MSN Searching Engine
ACTION PLANACTION PLAN
26
2. Medical Tourism - EU Nations and Canada
British National Health Service Waiting Lists
Waiting Time
0 to 5 months
6 to 8 months
9 to 11 months
More than 1 year
October 2003 793,200 124,300 38,800 109
October 2004 774,400 69,600 33 24
ACTION PLANACTION PLAN
27
They want the Health Care Service that has cost advantages and Conveniences.
It appeared to get easier to Travel Abroad for Treatment in the EU Nations.
Some private insurers had started steering clients to countries with cheaper care.
2. Medical Tourism - EU Nations and Canada
ACTION PLANACTION PLAN
27
They want the Health Care Service that has cost advantages and Conveniences.
It appeared to get easier to Travel Abroad for Treatment in the EU Nations.
Some private insurers had started steering clients to countries with cheaper care.
Expansion of Brokers to Provide Informations and Services
2. Medical Tourism - EU Nations and Canada
ACTION PLANACTION PLAN
28
Cooperate with Private Insurance Company
Win-win Strategy for Insurance Companies and Customers
Developing Potential Customer
Private Insurance Company can perform the roll of brokers
2. Medical Tourism - EU Nations and Canada
ACTION PLANACTION PLAN
29
Expansion of Brokers
Expansion of Existing Brokers in Europe Market.(SITACARE has 7 offices in the EU)
Developing New Brokersby Cooperating with “Tour Guide” Company
Enhancing function of One-Stop Shopping
Potential Customers can find reasonable health care more easily
2. Medical Tourism - EU Nations and Canada
ACTION PLANACTION PLAN
30
3. After-Care Infrastructure
U-Health
International Clinic
ACTION PLANACTION PLAN
31
3. After-Care Infrastructure - U-Health
Medical Service at Anytime, Anywhere
ACTION PLANACTION PLAN
32
Process of the U-Health
3. After-Care Infrastructure - U-Health
ACTION PLANACTION PLAN
33
U-health can be After-care tool(Cover the weakness of Medical Tourism)
Customer Relationship Management Tool
Save expenditure of health care to Customer
3. After-Care Infrastructure - U-Health
ACTION PLANACTION PLAN
34
3. After-Care Infrastructure - International Clinic
Use to After-care tools in International Market
Cover the limitations of U-Health
Have an Investment efficiency
Use own Human Resources
Franchising International Clinic
ACTION PLANACTION PLAN
35
4. Global Medical Tourism
ACTION PLANACTION PLAN
35
Opportunities in China
Increasing Demands of Premier Health Care.
China opened Health Care Market to Foreign Companies.(Limited Partnership or Joint-Venture)
More than 90 million tourist visited China each year.
(India attracted less than 3 million foreign visitors a year)
China is Potential Market of Medical Tourism.
4. Global Medical Tourism
ACTION PLANACTION PLAN
36
4. Global Medical Tourism
If China Health Care Market grows up, is it Just Crisis to Apollo?
ACTION PLANACTION PLAN
37
4. Global Medical Tourism
It is a huge Opportunity for Apollo!We have to use this Opportunity
ACTION PLANACTION PLAN
38
4. Global Medical Tourism
International Consulting & Projects
33% of consulting revenues, a figure that expected to rise to 50%
Consulting Division contributed only 2.4% to AHEL’s revenue, but 10% for Profits
It is a Market for our Intellectual Property
“We should manage hospitals, we should NOT own them.”
ACTION PLANACTION PLAN
39
4. Global Medical Tourism
Managing Hospitals in China
Contributing China Market Growth using their Human Resource and Intellectual Property
Dominant Position in the China Health Care Market
Doing Medical Tourism Strategy in China(Including Potential Market - Japan, Australia)
ACTION PLANACTION PLAN
40
4. Global Medical Tourism
India
ACTION PLANACTION PLAN
40
4. Global Medical Tourism
India
ACTION PLANACTION PLAN
40
4. Global Medical Tourism
+India China
ACTION PLANACTION PLAN
40
4. Global Medical Tourism
+
Ultimately, Apollo Hospitals will be the Leader of Global Tourism Market
India China
THE FIRST PART OFTHE GAME IS OVER
THE FIRST PART OFTHE GAME IS OVER
INTERNATIONAL CONSULTING
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