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Operating Strategy
Apollo Hospitals, India
Considering the elements of a strategic service vision, the following are the
factors applicable to the Apollo Hospitals of India. The service vision
framework are according to an exhibit from "Lessons in the Service Sector" by
James L. Heskett, Harvard Business Review, March/April 1987, p. 120.
1. Target Market segments
· Population Statistics : Population above 920 mill. people with wide variety
of economic levels, social statuses, and cultures. Lowest per capita GNP $255,
population growth 2% p.a. Growth real GNP 4.5%. Middle class 270 mill. Wealthy
30 million people.
· Target Market Segment : Upper middle class, the wealthy, and company
employees with health insurance (108 million in 1994 ). Half of the middle class
able to pay for private health care.
· Current Market Status : Most hospitals are state run at very low cost, low
tech, and low quality. Private medical facilities are available - highly
specialized, charging market rate (not latest technology but provides privacy
and intimacy). Treatment of a complex ailment in a private institution is more
time consuming and expensive.
· Economic liberalization : domestic and multinational companies - more
competition
· Demography : urban, high income as dictated by upper middle class and elite
class, neighboring countries.
· Psychography : Targeting people who can afford comprehensive high quality
service; who are ready to pay more money for the comfort and treatment by more
reputed doctors.
· Market Growth (income + segments growth) : Sizable ma ...