The problem with the GAG is that they have a huge opportunity to expand. They all he possible resources which is required for the expansion; however they have small collective issues of communication with respect to the individuals, communication and strategic alliance with the local nursing homes, doctors & medical professional. They have also a resistance from the GAG employees about the expansion plan adopted by the company as they feel the in patient care should not be wiped out as it is their core strength.
They should be focused on their long term objective by reaching out to the individuals located in the distant corners of India which will in turn fulfilling the short ERM objective of their expansion and counter competition. To fulfill the organization objectives they have to take the action plan of having a effective communication plan (Marketing & Advertisement) which clearly states the role of Franchisee and Franchiser. The communication role should be shared by both of the units.
The concerns of the employees should be addresses as soon as possible. Case: Apollo Clinic Facts and inferences of the case: Facts Inferences 1. The Apollo Group Indian’s first corporate hospital, pioneer in multi-specialty hospital, largest for-profit hospital chain in South Asia in 2000 A profit making hospital chain. 2. Vision of Dry. Paragraph Reedy (Founder of the GAG) to take healthcare to the distant corners of India through his dream project, ‘The Apollo Clinic’ Vision of the company 3. Company’s turnover of RSI. 780 million in March 2000, with a capacity of nearly 3000 beds in over 25 owned/managed multi-specialty hospitals. Insight about the company’s financial and infrastructure 4. Apollo success was because of the well know consultants, state-of-the-art facilities, excellent industry average compensation schemes, well focused on customer service. Core strengths of the company for their success in the sector. 5. Apollo success model attracts other potential entrants in the sector & also the changes in government’s FED policy in the sector.
Competition for Apollo Group in India by local and international players in the sector. 6. Apollo ventures into the new areas of the healthcare delivery by staring Telekinetic facilities, Web portal healthcare services, Educational website, setting up over 100 pharmacies, Strategic alliances with OIC for setting up pharmacies in the selected petrol stations Counter the competition and to be the market leader. . Focused was given on setting up over 250 Apollo clinics over 100 cities/towns.
Wants to cater the primary healthcare sector which is relatively unexplored and high potential market with fragmented competition and the customer service was given the less importance. 8. They want to adopt Franchisee model to expand their business. Due to of their expertise in the healthcare domain, having enough capital, high Brand equity they want to adopt franchisee model. 9. They want to setup a non hospital like ambiance, uncompromising on clinical standards with a reasonable cost. Customer service was there primary focus as that was there strengths. 0. Want to have In house and visiting consultants based on the service required. 11. Want to setup in house modern diagnostic centre and pharmacy 12. Clinic will setup in a leased premises and the total project will cost around RSI. 2 Scores. 13. Debt- equity Ratio will be 1:1. 14. Company will generate annual revenues of about RSI. 2 Scores in the first year and will increase two-fold by the fourth year. 15. Project will break even in the second year & yield an IR of about 25%. 16. ALL will provide all support for eating up and later, running the clinic.
Franchiser role 17. Scale of operations will ensure that the franchisee enjoy cost competitiveness during implementation and operation stages. 18. ALL support services will provide assistance in site selection, architecture, and interior design, project execution and financing, selection and procurement of medical equipments, selection & training of staff, providing clinical software, sales support, marketing support. 19. ALL proposes to charge a one time establishment fee of RSI. 15 Lacks while setting up clinic and royalty of 4% on the annual turnover of the clinic.
Apollo Group wants to expand his business in India and counter the competition created by the other Local & International Healthcare service providers. To expand their network they want to follow a model of Franchising. They have seen an opportunity in the Primary healthcare segment which has not bee tapped yet. Problem Statement: Selling of this idea to the individuals, doctors / general practitioners and small nursing homes as well as to corporate houses that could provide significant and regular billing to the Clinics. Statement of Objectives Long Term Objective: Vision of Dry.
Paragraph Reedy (Founder of the GAG) to take healthcare to the distant corners of India through his dream project, ‘The Apollo Clinic’. Short term Objective: To maximize the profits for the company by venturing into the potential market and stay ahead in the competitive market. Generation of options: SOOT Analysis – Apollo Clinic Project Evaluation of options: As they Capital, Brand Equity, Resources, they should focus more on the Communication part as their consumer bases are the individuals, doctors / general restrictions and smaller nursing homes as well as the corporate houses.
Decision Making: Long Term: Develop strategic alliances with the corporate clients and try to change their mindset about the employee’s healthcare as investment rather than as expenses. Even develop an alliance with the local nursing homes by sharing yours profits by prescribing their loyal patients for specialized treatment in Apollo clinic. Instead of following the complete Franchisee model, they shouldn’t deviate from their in-patient care business as there are several chances of facing a resistance from the GAG employees itself.
Short Term: Focus mainly on the Individuals and doctors as they are rival companies primary targets. Every body will be looking out for increasing out there consumer base. Action Plan: The primary responsibility of having alliances with the private nursing homes and local specialized doctors and consultants should lie with the Franchisee as they have the better understanding of the local market. The roles of communicating with the individuals (Patients) should be shared by the Franchiser and the Franchisee. The
Franchiser should incorporate this as their company advertisement and Marketing policy. However the Franchisee can do that at the state or the city level. The role of communicating with the corporate clients should be handled by the Apollo Group. And if any follow is to be done it should take the support of the local Franchisee. The concerns of the employees should be addressed as soon as possible. If there is an in house battle it is very difficult to fight with the competitors. The competitors can gain advantage by poaching the GAG staff which is the one of the strong pillar of the company.