APOLLO

INTRODUCTION:

The healthcare system in India has evolved over the period, starting from a public
healthcare system run by government to mainly private healthcare system that are
comprised of primary, secondary, quaternary and tertiary care. The overall share of the
private healthcare rose from 66% in 2005 to 81% in 2015.

Apollo Gleneagles Hospitals came into existence as multi-specialty care hospital in 2003
located in Kolkata. AGH was a joint venture Of Parkway Pantai Limited (Singapore) and
Apollo Group Hospitals (India).  It was the first corporate hospital, offering sophisticate
treatment and a wide range of medical specialties. Soon AGH established itself as one
of the leading healthcare institution in EAST India providing quality treatment and using
latest technologies.

AGH expanded itself into a wide network of almost 54 hospital, 1600 pharmacies and
8600 beds, college, clinic for diagnosis, consultancy and an international telemedicine
network. It was recognized across the globe for maintaining its quality standards
matched with the international quality and yet was affordable. By the end of 2015, it had
treated around 15 million patients from around 50 countries. The main reason for the
AGH growth and success was the combination of knowledge, relation with customer,
use of advance technologies and multi-specialty tertiary care.

Although the AGH has performed outstandingly over the past years and maintain its
position as a leader in the East India, but now due to increasing competition,
incorporation new and improved technologies in the market and growing expectations of
the customer has raised some concern that needs to be addressed in order to maintain
the leading position and enhance the loyalty of customers by increasing the customer
retention. Restructure or improve their model with growing challenges and continuous
changing dynamics of the industry.

Customer Retention and Loyalty:

AGH is currently facing two important challenges regarding customers, one is the
perception of AGH in the mind of targeted segment, the audience being targeted
perceived AGH as a premium facility in terms of price and offering and only look upon it
when no other relatively better alternative is available. The second concern is the loyalty
and retention of customers arising due to the awareness among the patients and
because of the easy access of other alternatives. In order to deal with the arising
concerns taking place, AGH most importantly need to revive the mindset and perception
customer had about AGH in order to attract and maintain the customers. The best way
to retain a customer is by maintaining a relation of trust with them. One the reasons why
patients do not again opt for the same healthcare institution is when their trust has been
broken or their expectations were not met by the institution. As customer is paying huge
amounts to healthcare institution he make sure that he is receiving the value for what he
is paying for. Customer desire a high end and high quality service and ease of access all
at a reasonable price, which is now become a challenge for the institution because if the
customer didn’t feel that he is receiving a good value of his money he will switch to
other healthcare institution.

In a study it was identified that 58% of the consumers prefer to receive all their medical
care from a same health institution but is forced to switch when the institution failed to
provide the consistency in the care and treatment receive by the patients. Healthcare
institution need to realize the fact that the customer loyalty lies in the relationship built
with them on the basis of trust rather than focusing on volume and revenues. (health,
2017)

Porter Five Forces that Determine Industry Structure

Porter Five Forces model is heavily borrowed from the traditional field of micro
economics. The five forces that determine the industry structure of organization in
casename case study are -

1. Bargaining power of buyers of Agh Gleneagles – If the buyers have strong

bargaining power then they usually tend to drive price down thus limiting the
potential of the Agh Gleneagles to earn sustainable profits.

2. Bargaining power of suppliers of Agh Gleneagles - If suppliers have strong

bargaining power then they will extract higher price from the Agh Gleneagles.

3. Rivalry among existing players – If competition is intense then it becomes

difficult for existing players such as Agh Gleneagles to earn sustainable profits.

4. Threat of new entrants - if there is strong threat of new entrants then current
players will be willing to earn less profits to reduce the threats.

5. Threat of substitute products and services - If the threat of substitute is high

then Agh Gleneagles has to either continuously invest into R&D or it risks losing out
to disruptors in the industry.
The four generic competitive strategies that can be
pursued in case study are -

Cost Leadership

In cost leadership, Apollo Gleneagles Hospitals: The Next Steps for Growth can set
out to become the low cost producer in its industry. How it can become cost leader
varies based on the industry forces and structure. In pursuing cost leadership
strategy, Agh Gleneagles can assess – (pursuit of economies of scale, proprietary
technology, supply chain management options, diversification of suppliers,
preferential access to raw materials) and other factors.  

Differentiation

Agh Gleneagles can also pursue differentiation strategy based on the industry forces
description in casename case study. In a differentiation strategy Agh Gleneagles can
seek to be unique in its industry by providing a value proposition that is cherished by
buyers. Agh Gleneagles can select one or more attributes that  can uniquely position
it in the eyes of the customers for a specific needs. The goal is to seek premium price
because of differentiation and uniqueness of the offering. Industry analysis using
Porter Five Forces can help Agh Gleneagles to avoid spaces that are already over
populated by the competitors.

Focus - Cost Focus & Differentiation Focus

The generic strategy of Focus rests on the choice of competitive scope within an
industry. Agh Gleneagles can select a segment or group of segment and tailor its
strategy to only serve it.  Most organization follows one variant of focus strategy in
real world.
The Focus Strategy has two variants.

(a) In cost focus a Apollo Gleneagles Hospitals: The Next Steps for Growth can seek a
cost advantage in its choses segment in casecategory.
(b) In Differentiation strategy Apollo Gleneagles Hospitals: The Next Steps for Growth
can differentiate itself in a target segment in its industry.

Both variants of the focus strategy rest on differences between a Apollo Gleneagles
Hospitals: The Next Steps for Growth ’s target segment and other segments in the
industry.

PESTLE

Political
2.1. Government stability

 The strong political structures and institutions support growth and development for Apollo
Gleneagles Hospitals The Next Steps for Growth
 Government stability also allows businesses like Apollo Gleneagles Hospitals The Next Steps for
Growth to expand regionally as well as internationally
 Trade relations with other countries because of political stability and strength allows businesses
like Apollo Gleneagles Hospitals The Next Steps for Growth to maintain offshore business
affiliations easily and smoothly
 Government stability also attracts investors for businesses and companies such as Apollo
Gleneagles Hospitals The Next Steps for Growth – which leads to growth and development in the
infrastructure as well as enhances international image
 High government stability can also attract resources for industry development as a whole, which
in turn will boost player performance and improve overall competitive positioning
Tax policy

 Favorable tax policies allow businesses like Apollo Gleneagles Hospitals The Next Steps for
Growth to expand easily
 Government subsidies and favorable tax rates will also allow Apollo Gleneagles Hospitals The
Next Steps for Growth to maintain competitiveness by controlling its costs of doing business
 Costs of doing business, in turn, will also not be passed on to the consumers – thereby allowing
consumers to enjoy favorable and competitive pricing
 Desirable tax policies that support business growth and development will allow businesses like
Apollo Gleneagles Hospitals The Next Steps for Growth to expand, and thereby add to creating
economic value for the country as well
Competition regulation
 It is important for government and political institutions and bodies to monitor competition in the
industry
  This will ensure that companies are using fair play for their products, and also business tactics and
strategies
 Competition regulation will also help the government monitor, restrict and regulate imports to
help local businesses grow and expand
 Competition regulation is important for the protection of all groups and stakeholders, as well as
for maintaining the rights and interests of the related stakeholders
2.4. Trade blocks

 Companies like Apollo Gleneagles Hospitals The Next Steps for Growth can take advantage of
trade blocks and trade treaties that have been formed and signed by the respective country of
origin
 Trade blocks can facilitate businesses like Apollo Gleneagles Hospitals The Next Steps for
Growth by lowering resource costs, lowering cost of doing business, as well as increasing the
supply of talented people
 With trade blocks, companies like Apollo Gleneagles Hospitals The Next Steps for Growth can
also make their products and services easily accessible through various channels and distribution
agencies for consumer to purchase and benefit from
 Strong industrial ties could be developed and maintained under trade blocks across borders, and in
different countries which could help companies like Apollo Gleneagles Hospitals The Next Steps
for Growth benefit from advanced knowledge, knowhow and technology as well.

3. Economic
3.1. Inflation rate
 A moderate inflation rate is needed in the economy for companies like Apollo Gleneagles
Hospitals The Next Steps for Growth to flourish
 A moderate inflation rate will also help the business grow and work positively towards increasing
the consumer confidence, and consumer spending trends
 As a result, the economy will get a boost and the overall disposable income will also increase
 A higher inflation rate would lead to a lower disposable income, and thus could lead to lower
overall expanding, which could harm businesses and companies, as well as lower consumer
confidence
 A lower inflation rate will lead to a high increase in the disposable income, and thereby could
increase competitiveness, especially through pricing strategies which could lead to unethical price
wars that take undue advantage of the consumer.
3.2. Interest rate
 A moderate interest rate will help businesses sand companies like Apollo Gleneagles Hospitals
The Next Steps for Growth in taking loans from the banks
 This business loan would be used for purposes of growth and development
 Business loans would also help in the development and building if the industry infrastructure at a
large level
 Moderate to interest rates would also allow individuals to take personal loans.
 With lower to moderate interest rates, personal loans will translate into higher purchases and
consumption patterns by the consumers. This in turn would lead to a boost in sales, consumption
and penetration of businesses like Apollo Gleneagles Hospitals The Next Steps for Growth.

Consumer spending trends

 Consumer spending trends are important and critical for companies like Patagonia Gold Plc, and
their performance
  Higher consumer spending trends are preferred as they lead to higher purchases and consumption
of products sold by Apollo Gleneagles Hospitals The Next Steps for Growth
 The higher consumer spending is also reflective of higher purchasing power, which is important
for increasing overall consumption patterns, and health of the economy
 These higher consumer trends can be positively influenced through product quality and marketing
strategies
 In addition, these trends are also influenced by other economic indicators such as inflation rate,
interest rate, and unemployment trends.
3.4. Unemployment trends
 Higher unemployment trends will lead to lower overall disposable income in the economy, which
in turn would directly affect the performance of companies like Patagonia Gold Plc
 Higher unemployment trends could also be reflective of a gap in labor skills and knowledge –
which again would harm consumers through higher prices of the products. The higher prices
would be associated with the increased cost of doing business when labor would be imported from
other sources for purposes of work.

4. Social
4.1. Demographics

 A higher portion of the younger population is beneficial for Apollo Gleneagles Hospitals The Next
Steps for Growth as it will allow the company a larger consumer population base
 In addition a younger population will also promise Apollo Gleneagles Hospitals The Next Steps
for Growth with more skilled and educated workers and human resources, thereby adding breadth
and depth to the talent pool
 A moderate to high middle class is also important for Apollo Gleneagles Hospitals The Next Steps
for Growth as its current consumers, and advocates
 This group acts as brand ambassadors for Apollo Gleneagles Hospitals The Next Steps for
Growth, and encourages younger population to become loyal customers as well
4.2. Education
 A higher education in the population is desirable for multiple reasons that will benefit Apollo
Gleneagles Hospitals The Next Steps for Growth
 A higher education means more talented, skilled, and knowledgeable persons in the talent pool for
Apollo Gleneagles Hospitals The Next Steps for Growth
 A higher education also means that the population s consumers will be more aware of their
purchases and consumption patterns
 As a result, they will focus on positive consumption which will give Apollo Gleneagles Hospitals
The Next Steps for Growth an advantage because of its unique competitive positioning and
placement
 A higher awareness level also means that consumers will prefer quality, and will be
knowledgeable of what the product promises and delivers. This comparison will form basis of
repeat purchase
 Again, Apollo Gleneagles Hospitals The Next Steps for Growth will be at an advantage because of
their focus on quality
4.3. Family size and structure

 The family structure and size determines the frequency and nature of purchase made
 This is also important for understanding consumption patterns
 For the target population it he current market, Apollo Gleneagles Hospitals The Next Steps for
Growth is faced largely with families of nuclear style, with two older children, and sometimes a
younger child
  The key decision makers are eth parents, though they take into consideration the suggestions and
requests of their children
 These parents as kept decision makers are influenced by marketing, store manager reviews, and
recommendations and by friends and family
 As a result, Apollo Gleneagles Hospitals The Next Steps for Growth applies push and pull
strategies for its appeal
4.4. Health consciousness

 An increasing portion of the population is adopting health and wellness trends

 The health and wellness trend has also translated into consumption decisions and patterns
 Apollo Gleneagles Hospitals The Next Steps for Growth has introduced health aspects in its
marketing, and also add features of health in their products as per consumer research and
behavioral assessments.
 The increased health consciousness has also led Apollo Gleneagles Hospitals The Next Steps for
Growth to make collaborations and take CSR initiatives focusing not only on physical, but also
mental and emotional health and wellbeing.

5. Technological
5.1. Technological infrastructure
 The country has a strong infrastructure with regards to technology

 There is a high rate of technological development and advancement

 Increasingly, businesses like Apollo Gleneagles Hospitals The Next Steps for Growth are
incorporating technological up-gradations and innovation to increase business efficiency and
affectivity

 There is high rate of innovation across all industries, which makes companies including Apollo
Gleneagles Hospitals The Next Steps for Growth competitive as well as progressive

 The improved technological infrastructure also helps in attracting foreign direct investment, which
in turn leads to further development and advancement

 The improved technological infrastructure also helps in attracting foreign direct investment, which
in turn leads to further development and advancement

 As a result, Apollo Gleneagles Hospitals The Next Steps for Growth has a distinctive competitive
advantage in terms of technological advancements, and the business continues to make use of, as
well as participate in innovation processes to enhance the business cycles and operations
5.2. Internet penetration
 The country, and all consumer markets enjoy a high rate of internet penetration

 The high penetration of internet is used for personal and social lives along with professional
responsibilities

 most all of the population own a smart phone for internet accessibility, and have access to
computers and laptops as well

 The higher penetration of internet reflects a progressive and educated population, which is
beneficial for Apollo Gleneagles Hospitals The Next Steps for Growth
  Apollo Gleneagles Hospitals The Next Steps for Growth has also made use of the high internet
penetration to reach consumers, and for marketing and promotional strategies to be able to directly
interact with consumers and gather feedback

 As a result, the higher internet penetration has helped Apollo Gleneagles Hospitals The Next Steps
for Growth in improving its quality and delivery, as well as allowed it to engage in strategic
communications and marketing processes
5.3. Use of social media
 There is a higher portion in the population of the youth, as well as middle ages persons

 These population segments widely make use of social media for connectivity

 Increasingly, social media is also being used by businesses like Apollo Gleneagles Hospitals The
Next Steps for Growth for gathering consumer data and information

 Apollo Gleneagles Hospitals The Next Steps for Growth also interacts with, gathers feedback, and
communicates promotions to customers through official social media channels

 Business like Apollo Gleneagles Hospitals The Next Steps for Growth have also started using
social media for purposes of recruitment, which highlights the changing trends in the business
community with respect to social media.
5.4. Investment in R &D
 There is a high level of local as well as international investment in the technological R&D of the
country

 The high investment helps in advancing industries, and equipping them with new, and more
flexible as well as effective ways for business operation and other business processes

 The higher investment, and related research has also allowed for an increased rate of innovation

 Businesses take advantage from innovation and development through the overall industrial growth
along with development of competitive edge for the industry in the global market

 Adaptations by individual players like Apollo Gleneagles Hospitals The Next Steps for Growth
also leads to the building of high competitive advantage for companies

6. Environmental
6.1. Recycling
 There is an increased focus on environmental sustainability and recycling

 Consumers are becoming more aware, and demanding ways for recycling products to be disposed
off

 Consumers are also increasingly demanding recycled products for consumption

 Apollo Gleneagles Hospitals The Next Steps for Growth has launched specific sites for disposing
off products to be recycled
  Apollo Gleneagles Hospitals The Next Steps for Growth, like many other players, is also
introducing a novice product line of recycled products for consumers to benefit from
6.2. Waste management

 The country has high regulations for waste management and control

 Apollo Gleneagles Hospitals The Next Steps for Growth should associate itself with, and register
with the waste management authorities and institutions to be able to follow regulations, maintain
checks, and avoid any future hassles

 Apollo Gleneagles Hospitals The Next Steps for Growth, in view of environmental sustainability,
already has a controlled and designated process of managing waste, and disposing waste in an
environmentally friendly manner.
6.3. Green consumption

 The increased awareness of environmental sustainability has also given way to an increase in the
green lifestyle

 Consumers in the country, and across all markets are increasingly preferring products and services
that are green i.e. produced and marketed using environmentally friendly and sustainable ways
and methods

 Companies are also hopping on the bandwagon and introducing green products to appeal to the
consumers

 Apollo Gleneagles Hospitals The Next Steps for Growth engages regularly in environmental
friendly CSR activities.

 Apollo Gleneagles Hospitals The Next Steps for Growth has also introduced a green product line
– which is a variation of its existing products. The company plans on increasing weightage for the
green product line gradually to increase its role in environmental sustainability.

 Apollo Gleneagles Hospitals The Next Steps for Growth also contracts with suppliers and
distributors in its integrated back chain, who are following strong principles with regards to
environmental sustainability
6.4. Renewable energy investments
 The country as a whole it all its industries is gradually moving towards the use of renewable
energy for operations and business processes

 This is being done to reduce the environmental footprint by the market, as well as for reducing the
carbon effect

 Apollo Gleneagles Hospitals The Next Steps for Growth and related industry members are
increasingly making use of solar energy, and hydroplanes for purposes of operation management
and business processes

 Apollo Gleneagles Hospitals The Next Steps for Growth has a company controlled hydro plant –
on a small scale – to help in manufacturing operations.

7. Legal
7.1. Health and safety law
 There are strict regulations pertaining to the health and safety of employees at the workplace
 Respected associations and institutions regularly check with businesses about implementation of
safety nets, drill, and precautionary measures at the workplace
 The safety and health involves not only physical wellbeing, but also the emotional and mental
wellbeing if employees.
 Apollo Gleneagles Hospitals The Next Steps for Growth has placed high importance of the safety
and health of its employees, a and continually strives to improve it further
7.2. Employment laws

 Country wide regulations demand businesses to form legal contracts pertaining to employment
 These contracts are authorized by the respected governmental bodies, and involve all aspects of
employment
 Employability contracts ensure a healthy relation between all parties involved, and also ensures
that there is no misunderstanding or colluding
 Apollo Gleneagles Hospitals The Next Steps for Growth practices employment laws, and briefs its
employees about the same during the recruitment process
 The HR department of Apollo Gleneagles Hospitals The Next Steps for Growth also regularly
conducts workshops and training sessions for employees to engage them, and make them aware of
the employment laws, along with other legal formalities.
7.3. Anti-discrimination law

 The country and the market is made up of divers population

 There is a high number of immigrants, and the businesses from the country also operates at
multiple off shore locations
 Apollo Gleneagles Hospitals The Next Steps for Growth, as a result, has always been comfortable
with diversity in its workforce, and has framed internal company policies to support diversity
 The company follows the anti-discrimination law in all its processes – from recruitment to
promotion
 All employees regularly undergo diversity trainings and workshops to be able to avoid
discriminatory and prejudiced actions – which could have severe repercussions
 Apollo Gleneagles Hospitals The Next Steps for Growth, like other players in the industry, is an
equal opportunity employer
 Apollo Gleneagles Hospitals The Next Steps for Growth also ensures that there is no
discrimination within the company, and the organizational culture remains toxic free
 Apollo Gleneagles Hospitals The Next Steps for Growth ensures this by following regulations
about the anti-discrimination law as well as through regular investment in trainings and employee
development sessions