Download - Aravind presentation1
A Case Study on
Named after
Sri Aurobindo Ghosh,
his teachings form the
basis for Aravind’s
work
‘Spirituality allows the divine force to work through each of us for a greater good’- Sri Aurobindo
OverviewIt was in the year 1976 that late
Dr. G. Venkataswamy established an 11-bedded Aravind Eye Hospital in a small rented house in Madurai
He created a system for sight-saving
cataract surgeries that produces enviable
medical outcomes in one of the poorest regions
of the globe.
• At one point of time, he was affected by rheumatoid arthritis, but through his hard work and determination he overcame his disability and earned his masters in Ophthalmology from Madurai Medical College.
• Dr. V was honoured with the Padmashree award in 1973
• Late Dr GovindappaVenkataswamy or 'Dr V' as he was affectionately called was the founder chairman of ACES.
Vision:
-Offer quality eye care at reasonable cost
-Provide services to rich and poor alike
-To Mass Market Cataract Surgery on a Global perspective
Mission:
-“Eradication of Needless Blindness” by creating a private, non profit eye hospital that would provide quality eye care.
Values Providing compassionate and high quality eye care for
all.
Extending the reach of quality eye care to the poor and needy.
Active community involvement, screening camps, and IT enabled Vision Centers in rural areas.
Developing ophthalmic human resource.
Today, Aravind has ten branches of Eye Hospitals, with a combined strength of more than 4000 beds a network of outreach centers in the state of Tamil Nadu
•Madurai
•Theni
•Tirunelveli
•Coimbatore
•Pondicherry
•Dindigul
•Tirupur
•Salem
•Tuticorin
•Udumalaipet
In the year ending March 2013, over 3.1 million outpatients were treated and over 370,000 surgeries were performed, making Aravind one of the world‘s largest eye care systems catering largely to the poor population.
Growth
1977- First 30 Bed Hospital opened at Madurai, the third largest city in Tamil Nadu, later extended to 250 beds.
1984- A new 350-bed hospital opened exclusively for free patients in Madurai.
1985- 100-bed hospital at Theni
1988- 400-bed hospital at Tirunelveli
1997- 874-bed hospital at Coimbatore
2003- 750-bed hospital at Pondicherry
2010- Hospital at Tirupur and Dindugal
2011- 150-bed hospital at Salem
2012-62-bed hospital at Udumailaipet
AttractivenessRemarks
1 2 3 4 5
No. of Competitors Large * Small
Industrial Growth Slow * Fast
http://www.ibef.org/industry/healthcare-
india.aspx
Fixed Cost High * Low
Differentiation Low * High
Switching Cost Low * High
Openness Terms of Sales Secret * Open
Excess Capacity Large * Small
Strategic Stakes High * Low
Rivalry among Competitors:
Barriers to Exit:Attractiveness
Remarks
1 2 3 4 5
Asset Specialisation High * Small
Cost of Exit High * Small
Government Restrictions
High * Small
http://finmin.nic.in/workingpaper/policy%20Paper%20on%20Services%20
Sector.pdf
Barriers to Entry:Attractiveness
Remarks1 2 3 4 5
Economies of Scale Small * Large
Product Differentiation Low * High
Brand Identity Low * High
Switching Cost Low * High
Access to Channels of distribution
Easy * Limited
Capital Requirement Small * Large
Access to technology Easy * Restricted
Access to raw materials Easy * Restricted
Government Protection None * Substantial
Threat from Substitutes:Attractiveness
Remarks
1 2 3 4 5
Availability of close
substitutesHigh * Low
Switching Cost Low * High
Substitute’s price-
valueBetter * Worse
Profitability of the
producers of
substitutes
High * Low
Bargaining Power of Buyers:Attractiveness
Remarks
1 2 3 4 5
Number of Buyers Small * Large
Availability of substitutes Many * Few
Switching Cost Low * High
Buyer’s threat of
backward integrationHigh * Low
Industry’s threat of
forward integrationLow * High
Contribution of quality Low * High
Contribution of cost High * Low
Buyer's profitability Low * High
Bargaining Power of Suppliers:Attractiveness
Remarks
1 2 3 4 5
Number of suppliers Small * Large
Availability of substitutes Few * Many
Switching Cost High * Low
Supplier’s threat of forward
integrationHigh * Low
Industry’s threat of
backward integrationLow * High
Contribution to quality High * Low
Contribution to cost High * Low
Industry's importance to
supplierLow * High
Government Action:
Attractiveness
Remarks
1 2 3 4 5
Industry protection Low * High
Industry regulation (Pollution, etc.,)
High * Low
Customs and tariff restrictions abroad
High * Low
Overall Attractiveness of the Industry:Attractiveness
RemarksLow High
1 2 3 4 5
Barriers to entry *
Rivalry among competitors *
Barriers to exit *
Power of buyers *
Power of suppliers *
Threat of substitutes *
Government action *
Overall attractiveness *
Service for all
Rip the price tag off a sight restoring surgery
Design for dignity
Let patients decide whether to pay or not
High quality for free
Doctors rotate through free and paid service
Broaden the pie
Prioritize marketing to people who cant pay
Own the Barriers
Take service to people who cannot get to you
Model after McDonalds
Standardized, easy access, affordable
Be Self Reliant
Intraocular Lens
Train your Competition
View rivals as Mission partners
Strength Low cost Surgeries
(Aurolab, the manufacturing division of Aravind Eye Hospital)
Vision centers and community eye clinics
Organizational Transparency and International Reputation
Highly trained medical personnel
Mission-oriented Culture Deeply Rooted in AECS Staff
Geographic locations
Weakness Lack of financial resources(less than market price)
Lack of Decentralized Decision Making Authority, Autonomy
Irregular Patient Inflow
Transportation
Opportunities
New business initiatives available
30 million people in India are classified as blind and 2-3 million is added annually
Collaborations with different healthcare organizations
Market Potential for Specialty Products and Services
Threats Demand for expensive medical technology
India’s political risk is high and there is always a chance of government intervention
Competitors expanding
Other natural treatments, Ayurveda
Losing Status as Employer of Choice
Space Graph:
Competitive
AggressiveConservative
Defensive
INTERNAL/EXTERNAL
STRENGHTS WEAKNESSES
• Low cost Surgeries • Lack of funds
• Aurolab • Decentralized decision making
•Vision centers and community eye clinics • Irregular Patient Inflow
•Geographic locations •
OPPORTUNITIES S-O STRATEGIES W-O STRATEGIES
• 30 million people in India are classsified as blind
Using low cost strategy AECS can expand its business
By expanding its business globally it can fund itself for mobile clinics
•New business initiatives available
Special products from Aurolab will give huge return as there is high demand for them forecasted.
Developing of infrastructure can provide room for large numebr of people
•Market Potential for Specialty Products and Services
THREATS S-T STRATEGIES W-T STRATEGIES
Demand for expensive medical technology
Quality treatements can eliminate customers to shift to ayurveda treatments
Poor patient inflow control can becompetitor's advantage
Natural treatments like ayurveda
Economies of scale help AECS to overcome expenses in medical technology
Political risk
Competitors expanding
1
2
3
4
1234 IFE Score
EFE Score
Grow and Build• Market Development• Horizontal Integration
Global Expansion StrategyMarket penetration
strategy
Key external factors: Weight AS TAS Weight AS TAS
Opportunities
New business initiatives 0.12 4 0.48 0.12 4 0.48
collaborations 0.15 3 0.45 0.15 4 0.6
Rural patients 0.13 3 0.39 0.13 4 0.52
Expansion across India 0.08 3 0.24 0.08 4 0.32
Special products 0.08 2 0.16 0.08 2 0.16
Threats
Political risk 0.07 2 0.14 0.07 4 0.28
Other alternatives (Ayurveda) 0.15 3 0.45 0.15 3 0.45
Expensive medical advancements 0.1 4 0.4 0.1 2 0.2
Wrong perception towards low cost service 0.12 2 0.24 0.12 2 0.24
Total Weighted Scores 1 2.95 1 3.25
QSPM Contd…Global Expansion Strategy Market penetration strategy
Strengths
Low cost Surgeries 0.15 4 0.6 0.15 3 0.45
Organizational Transparency 0.08 2 0.16 0.08 3 0.24
Service oriented 0.10 2 0.2 0.1 2 0.2
Mission-oriented Culture 0.13 4 0.52 0.13 4 0.52
Aurolab 0.09 3 0.27 0.09 3 0.27
Vision centers and community eye clinics 0.09 2 0.18 0.09 3 0.27
Demand Generation 0.13 4 0.52 0.13 3 0.39
Geographic locations 0.04 1 0.04 0.04 2 0.08
Weakness
Lack of funds 0.04 4 0.16 0.04 3 0.12
Lack of Decentralized Decision Making Authority 0.08 3 0.24 0.08 2 0.16
Lacks of sponsors for mobile clinics 0.02 1 0.02 0.02 1 0.02
Irregular Patient Inflow 0.05 4 0.2 0.05 3 0.15
Total Weighted Scores 1 3.11 1 2.87
Reference
http://www.v2020eresource.org/sitenews/news102011/pdf/ensuring_financial_sustainability.pdf
http://www.aravind.org/Downloads/Sharpening.pdf
http://www.aravind.org/Downloads/draravindinterview.pdf
http://www.aravind.org/downloads/InfiniteVisionTIMES.pdf
http://www.aravind.org/downloads/LAICO_Consultancy_Brochure.pdf
https://www.youtube.com/watch?v=1O7Ac83XFu0
https://www.youtube.com/watch?v=aPRIo6S41A8
https://books.google.co.in/books?id=aoHRAwAAQBAJ&pg=PA309&lpg=PA309http://en.wikipedia.org/wiki/Aravind_Eye_Hospital
http://www.aravind.org/Aurolab.aspx