Aravind Eye Care SystemIs it Blue Ocean Move ?

Prepared by:Mahipal G. Chauhan

Nirav Jadav

Flow of Presentation:

About Aravind eye care systemMissionMile stonePre Aravind eye care systemPre BUMPost BUMERRC ModelStrategic CanvasProfit ModelThree tiers of Non CustomerSequences of BOSSix Conventional ModelWhy Blue ocean move?Bibliography

About Aravind Eye Care:

Aravind Eye Hospital was founded in 1976, by Dr. G. Venkataswamy, a man known to most of us simply as Dr. V.

He started with 11 bed hospital in rented house.

Over the years, this organization has evolved into a sophisticated system dedicated to compassionate service for sight.

The Aravind Eye Care System now serves as a model, for India, and the rest of the world.

Aravind Eye Hospitals try to maintain a ratio of 1:2 between paying and free patients, which keeps the enterprise financially viable.

Aravind eye care System:

5 owned hospitals

4 managed hospitals

A training institute

Eye bank Research lab

Drug and eye care equipment manufacturing arm (Aurolab)

An international training facility (LAICO) which consults and trains eye hospitals in other developing countries

Conducts over 285,000 eye surgeries and provides over 2.4 million persons with outpatient eye care per year at the 5 Aravind owned hospitals

Relevance37 million people are blind worldwide.

India has 12 million blind people, more than any other country, and 200 million people in need of eye care.

In India, simple cataract surgery can restore vision to 7.5 million blind people, while refraction and a pair of spectacles can restore vision to 2.4 million people.

Cost Advantage and AffordabilityCosts are kept low through:

Manufacturing its own intraocular lenses (IOLs) used in cataract surgery (outsourcing not an option as no affordable lenses being manufactured at time)

High surgeon productivity: 2600 surgeries/doctor/year

Eye care is made affordable through cross-subsidisation: charging patients able to pay (~30% of patients) and using the collected fees to subsidize poor patients (~70% of patients)

Mission:

To Eliminate Needless Blindness

Pre Aravind Eye Care Hospitals

Post – Arvind Eye care System:

Four Actions Framework + Eliminate/Reduce/Raise/Create Grid

Eliminate

Emotional

RaiseQuality Benchmark

Facility for Masses

Focus on Primary health care

ReduceCost

Price

CreateManufacturing own eye care equipment and lenses

Create eye care Professional team

Research industry for Eye and Diabetes.

Price

Qualit

y

Facili

ty

Techn

olog

y

Reach

Home

deliv

ery se

rvice

Educa

tion

inst

itute

0

1

2

3

4

5

6

Govt.HospitalPrivate HospitalAravind eye care

Strategic Canvas:

Profit Model of Blue Ocean StrategyThe profit model of blue ocean strategy shows how value innovation typically maximizes profit by using the three levers of strategic price, target cost, and pricing innovation.

The Strategic Price ($50 to $ 300)

The Target Profit (25$)

The Target Cost (25$)

Streamlining and Cost Innovations Partnerin

g

Pricing Innovation

Three Tiers of Noncustomers

Below Poverty Line People

Middle Class

High end Customers

Sequence of Blue Ocean StrategyBuyer utility

Work on Purchase, Delivery ,Convenience , Use and Risk

Price

Low Price

Cost

Self training, IOL manufacturing , Research study , Decrease time

Adoption

Increase man power efficiency , Technological innovation

A Commercially Viable Blue Ocean Idea

No-- Rethink

Yes

Yes

Yes

Yes

No-- Rethink

No-- Rethink

No-- Rethink

Why Blue Ocean Move?

Create uncontested market space

Make the competition irrelevant

Create and capture new demand

Break the value-cost trade-off

Align the whole system of a firm’s activities in pursuit of differentiation and low cost

Better Eye care specialist made.

Bibliography:

http://www.aravind.org/CommunityOutreach.aspx

http://hbr.org/product/aravind-eye-hospital-madurai-india-in-service-for-/an/593098-PDF-ENG

http://www.sciencedirect.com/science/article/pii/S0263237399000845

https://wiki.brown.edu/confluence/download/attachments/9994241/Aravind+case.pdf?version=1

http://www.mitpressjournals.org/doi/pdf/10.1162/itgg.2007.2.4.50

http://www.mitpressjournals.org/doi/abs/10.1162/itgg.2007.2.4.35

Thank you