The infirmary industry is one of the most of import constituents of the value concatenation in the health care industry.
The industry is turning at the rate of 14 % yearly. The size of the Indian health care industry is estimated to turn at Rs. 1,717 billion in 2007. It is estimated to further turn by 3,163 billion at 13 % compounded one-year growing rate. The private sector histories for 80 % of the health care as compared to the populace sector which is merely 20 % . Harmonizing to studies conducted by WHO, a state every bit populated as India needs to add 80,000 beds each twelvemonth for the following five old ages to run into its of all time turning population. The current rate of infirmaries and beds bases at a bare 15,393 and 8,75,000 severally. ( Apollo, 2009 )
The turning criterion of life of many Indians is taking to spurring demand for high quality medical attention and transforming the health care sector into a profitable industry. In add-on to that, medical touristry is fast altering the face of the so called traditional health care industry. India ‘s cost advantage and explosive growing makes it a favorable topographic point for health care chances. ( Apollo, 2009 )
The state has been good known around the universe for religious healing and now with the roar in modern medical specialty, latest engineering and skilled health care professionals it is shortly going a preferable finish for medical touristry.
Harmonizing to Ministry of Commerce and Industry, Indian medical touristry that was one time valued at USD 350 million in 2006 is estimated to turn into USD 2 billion. ( Apollo, 2009 )
Company Introduction
The dream for Apollo Hospitals was cultivated and developed within Dr. Prathap C Reddy, the laminitis Chairman of Apollo Hospitals. In 1983 the concatenation began its first infirmary in Chennai bearing 150 beds. However, today the group comprises of diagnostic clinics, pharmaceuticss and over overA 8065 beds acrossA 46 infirmaries in India and overseas. The groups ‘s attempts towards a better medical hereafter in the state include clinical research, BPOs and wellness insurance services. ( Apollo, 2009 )
After 25 successful old ages of accomplishment and dream realization today Apollo Hospitals is non merely one of the state ‘s premier health care suppliers but besides a innovator in assisting India go a centre-of-excellence in planetary health care. Apollo group has been successful on a really big graduated table to take quality health care across India. They have been successful in touching 10 million lives and giving hope to the medically backward Indian population who had limited substructure. ( Apollo, 2009 )
Apollo has scripted the medical landscape in the state by uninterrupted inventions and gone out to go a quality health care supplier. It has been a major participant in scripting the medical landscape of the state. ( Apollo, 2009 )
By the beginning of the new millenary, Apollo Hospitals Group had become an incorporate health care group with owned and administered infirmaries, diagnostic clinics, distributing pharmaceuticss and consultancy services. In add-on, the group offers visit to patient ‘s doorsill, clinical & A ; diagnostic services, medical concern procedure outsourcing, 3rd party disposal services and wellness insurance. To hike public presentation and service to clients, the company besides makes available the services to back up the concern of health care ; telemedicine services, instruction and preparation programmes & A ; research services and a host of not- for- net income undertakings. ( Apollo, 2009 )
Structural Industry analysis
Industry Overview
The Healthcare industry incorporates several sectors that are dedicated to supplying services and merchandises dedicated to bettering the wellness of persons. Harmonizing to market categorizations the health care industry includes Healthcare equipment & A ; services and pharmaceuticals, biotechnology & A ; life scientific disciplines. The peculiar sectors associated with these groups are: biotechnology, diagnostic substances, drug bringing, drug makers, infirmaries, medical equipment and instruments etc. ( Apollo, 2009 )
The industry as a whole is less antiphonal to negative alterations in the economic system due to its comparatively inelastic demand. Peoples need healthcare regardless of their economic state of affairs. ( Apollo, 2009 )
Porter ‘s Five Forces -Healthcare Industry ( Dobson et al. Pp 26 )
Menace of New Entrants
Hospitals face a really high barrier to entry as they are to a great extent regulated by the authorities. The authorities frequently does non let infirmaries to acquire established in any given country specially if there is a infirmary already bing in any given country. This is done to forestall the infirmary to get health care engineering therefore forestalling it from come ining in the market. This really closely depends on the so called services provided by the infirmaries. Many infirmaries provide merely basic map of clinical interventions to patients. ( SWOT N PORTER 5 forces – Indian pahrma )
These types of Hospitals cater to patients who come in for interventions from either sing physicians or resident physicians. A infirmary by criterions means an establishment that provides medical, clinical, surgical or psychiatric testing and interventions for people who are sick, injured, pregnant etc. Thus an establishment supplying all the above said services can merely be termed as a infirmary. ( SWOT N PORTER 5 forces – Indian pahrma )
Supplier Power
The Idea of supplier power is really interesting in the health care industry. There is such a big conglobation of different companies in the sector that it acts in an synergistic mode with each other. ( SWOT N PORTER 5 forces – Indian pahrma )
Drug or biotech companies cater to infirmaries and pharmaceuticss and infirmaries supply patients to insurance companies. Hospitals have low bargaining power or comparatively little power over providers. Hospitals are provided medical specialties and equipments by biotech and drug companies. These companies may take non to provide their medical specialties at the infirmaries and their pharmaceuticss that supply them to patients straight. ( SWOT N PORTER 5 forces – Indian pahrma )
However, there is non such a big menace as any prescription drug that is sold has to be sold through a pharmaceutics merely. Likewise in the instance of Healthcare equipment, Companies could take non to sell them their equipment but this is non a big menace as there are reasonably big Numberss of healthcare equipment companies. ( SWOT N PORTER 5 forces – Indian pahrma )
The provider power pharmaceuticss face besides depends mostly on the handiness of generic medical specialties and their replacements. If the replacements of the medical specialty are available, so the pharmaceuticss face less supplier power as there is more competition in the market, thereby doing the pharmaceuticss more powerful. ( Apollo, 2009 )
The pharmaceuticss now have the power to drive down the monetary value of the merchandise. The lone stiffness the pharmaceuticss face is from companies that have patented merchandises. They might non be willing to sell their merchandises to the pharmaceuticss at a lower cost and might bear down a higher monetary value. ( SWOT N PORTER 5 forces – Indian pahrma )
Buyer Power
The health care industry comprises of all the companies that are involved in supplying health care services, irrespective of the positive or negative economic system. Whether the monetary values of medical specialties or monetary value of services provided additions or lessenings, it is barely a affair of concern to people as people in today ‘s twenty-four hours and age are passing comparatively more on health care. Therefore citing that the health care industry is comparatively unaffected by purchaser power would non be inappropriate. Economy does non impact the wellness or the pick of health care option for people. If a individual has to undergo an operation, he/she will non be affected by the economic crisis or rising prices etc. However, this may non keep true in instance of hapless people or people below the poorness line as irrespective of the economic conditions they might still non be able to afford health care for themselves. Irrespective of economic conditions, hapless people tend to be less healthy than wealthier people as the range of health care comfortss to them is limited. ( SWOT N PORTER 5 forces – Indian pahrma )
Handiness of Substitutes
Overall, the health care industry has no replacements, if a individual needs health care, he/she will hold to seek the services of the health care sector merely. in the instance of infirmaries, Hospitals have no replacements. ( Apollo, 2009 )
If a individual needs to be medically attended to, he/she will hold no pick other than to use it. There are other signifiers of interventions or medical specialty available but it is non huge plenty to over shadow modern medical specialty. But within the industry the handiness of replacements varies. Within the industry, nevertheless, the companies face the power of replacements when their patent expires. During the term of their patent the company can bask immense monopolistic benefits but every bit shortly as their patents run out, with the production of generic medical specialties, they start to lose out on their monopolistic benefits and future chances. Their rivals will bear down less for the same medical specialty as they did non hold to incur R & A ; D costs. ( SWOT N PORTER 5 forces – Indian pahrma )
Competitive Competition
Hospitals are an indispensable public-service corporation for people. They face less competitory competition as they are low in figure in any given country and even if there are a set of figure of infirmaries in any country, they cater to different demands of the clients. Rather than doing them rivals, this manner they act in conformance with each other, supplying each concern every bit good.
Besides, most infirmaries cost the same and normally this monetary value is covered by insurance companies so there is no monetary value competition hence really small competitory competition. ( SWOT N PORTER 5 forces – Indian pahrma )
SWOT ANALYSIS ( Dobson et al. Pp 26 )
Strengths:
Integrated healthcare company: Apollo infirmaries provide end -to-end services to the patients. Equipped with a well maintained in house pharmaceutics every bit good as standalone pharmaceuticss, where it has got alone advantage compared to its rivals. These pharmaceuticss are unfastened round the clock and supply for non merely in house patients but other clients excessively. ( Apollo, 2009 )
Best engineering & A ; resources to present quality services: Apollo Hospitals have been reputed to get province of the art engineering and optimal substructure to function to its clients. Apollo infirmaries serve its clients a universe category service to its clients. The infirmary giant has late acquired province of the art engineering for in neurology and liver graft. They provide quality resources which provide a universe category service to the patients. ( Apollo, 2009 )
Penetration: Indian Healthcare market is one of the least penetrated markets thereby easing to bing participants. ( SWOT N PORTER 5 forces – Indian pahrma )
Impact of the Health Insurance sector: gap of the wellness insurance sector and the expected growing in the per capita income are cardinal growing drivers from a long term position. This leads to growing in the wellness attention sector. ( SWOT N PORTER 5 forces – Indian pahrma )
Positive promotion: growing of the sector in the state is straight relative to good wellness attention and better wellness interventions to the people of the state. With the turning criterion of life of the people. They prefer to obtain best medical attending. ( Apollo, 2009 )
Largest private sector health care supplier in India. ( SWOT N PORTER 5 forces – Indian pahrma )
Consistent gross growing across concern sections. ( SWOT N PORTER 5 forces – Indian pahrma )
Failing:
Since more than 300 Stand-alone pharmaceuticss have been added during the twelvemonth and most the pharmaceuticss are in the incubation phase, this can deject the borders. The incubation phase of the pharmaceuticss has had a run outing consequence on the few set running pharmaceuticss. ( Apollo, 2009 )
There is a really high abrasion rate amongst nursing staff due to competition from the Western states. High wages and employee options are provided in the West, better preparation installations. ( Apollo, 2009 )
Opportunity:
There is a turning chance for the health care sector in India as for every 1000 people there are merely 1.11 beds available. To do this ratio rise to 1.85 by 2012, an investing of Rs. 3480 billion is required. Such a immense investing is beyond the control of the public sector.
( Apollo, 2009 )
Booming Medical Tourism and options: India has an increasing figure of medical tourers and classs every twelvemonth. The market for Medical touristry is expected to make $ 40 Billion by 2010. Apollo infirmaries, already a major participant inthe market is really good positioned to maximize its portion. ( Apollo, 2009 )
Lack of qualtity resources: Turning chances means growing of the figure of physicians and nurses per 1000 patients. In India for every 1000 people there are 0.3 physicians and 0.8 nurses available while comparably in the western states the figure stands at 1.23 physicians and 2.56 nurses severally. ( Apollo, 2009 )
The Indian Healthcare market is expected to quadruple to $ 150 Billion by 2017 from the current market size of $ 35 Biilion. Apollo Hospitals is really good positioned in the market to capitalise on this growing chance. ( SWOT N PORTER 5 forces – Indian pahrma )
Menaces:
There seems to be high competition predominating amongst bing participants in the industry. ( Apollo, 2009 )
Cost of the medical equipment histories for 40 % to 45 % of the entire outgo in the infirmaries. As the industry is majorly based on new and latest equipment therefore the industry requires changeless investing in
the new health care devices i.e. upgrading engineering. Failure in making so may take to loss of patients. ( Apollo, 2009 )
Any alteration in engineering will do the bing medical equipments disused. ( Apollo, 2009 )
A big sum of gross is generated from foreign citizens who come for medical interventions to India. A big part of these people comes from US. As US is seeking to supply quality health care services at low costs as per their new presidential program, this may cut down the gross. ( Apollo, 2009 )
This type of concern is capital intensive. ( SWOT N PORTER 5 forces – Indian pahrma )
Abrasion rate in the health care sector is expected to increase with the rush in demand for medical professionals. ( Apollo, 2009 )
