School of Business and Management

CHRIST (Deemed to be University)

BBH361B Healthcare Services Management
CIA- 1

Submitted by-
Aniruddha Mozumder 2023005
Samyak Shrimal 2023039
Sara Shende 2023072
Harshul Arora 2023192

Submitted to- Dr. Manikandan MKM

Date of Submission- 13th August 2021

Hospital overview-
Max Healthcare Institute Limited is a hospital chain founded in 2001 by Analjit Singh. It is
based in New Delhi. Its main hospitals are based in north Indian cities like Capital Region of
Delhi and Mumbai, Mohali et cetera. In 2020, Max Healthcare merged with Radiant Lifecare,
which operated BLK Hospital in Central Delhi and the iconic Nanavati Hospital in Mumbai
to emerge as the second-largest healthcare company (by revenue). The company listed on the
stock exchanges in Aug 2020. It has also been awarded as the Best HR Practise in Healthcare
by Asia Healthcare Excellence. It has a total of 16 hospitals with 3,783 employees as of 2020.
Its area of medical coverage specialises in cancer care and oncology, emergency and trauma,
cardiac sciences, liver transplants, orthopaedics, laparoscopic surgeries, neuroscience studies,
hepatology and endoscopy and urology. It also specialises in the fields of eye care,
dermatology, reconstruction surgeries, dental care, ENT, IVF and infertility, mental health
and behavioural sciences, health and wellness, dietics and rehabilitation.

Analysis of the 5 Force Model

Michael E. Porter is an American academic. He has devised several theories in the field of
economics, business and social causes. One of the most important theories penned by him are
the Michael E. Porter’s 5-Force model of an Industry. This model helps identify and analyze
the competitive behavior which forms the industry. It helps to identify the strengths and
weaknesses of an industry’s structure to help devise a strategy. Porter’s model can be used to
determine the magnitude of competition within the sector and come up with a long-term
profitable business plan.
The points in the 5-Force model are-
1. Rivalry amongst existing competition.
2. Threat of new entrants.
3. Bargaining powers of buyers.
4. Bargaining powers of suppliers.
5. Threat of substitute products.

The following flow chart shows the elements of each point through which we can analyze the
5-Force model for Max Hospital.

i) Rivalry amongst the existing competition- This is defined as the mix of various other
similar companies providing similar services or products in the same industry. It is
 established that, bigger the basket of homogenous companies in the same sector,
providing similar products or services, the lesser is the power of the company on its
consumers. In the same way, if the rivalry is in a small percentage, the existing company
can secure higher prices and gain higher profits via sales without the threat of
competition.
 Healthcare sector is an industry with numerous other entities providing the same
services to the people. India being a hugely populous country of 1.3 billion, a
need for extensive amount of healthcare service providers is required. From
metro cities to the most rural strata of the country, being provided of basic
healthcare services are a person’s fundamental right, thus, with past reforms and
development in the said sector, a large network of healthcare service providers
are now present in India within both government and private sector. According to
reports, there are sixty-nine thousand hospitals established in India till 2019.
Thus, there exists a large number of competitors in the industry. These existing
competitors are government hospitals like AIIMS and private entities like Fortis,
Apollo, Medanta, Hinduja et cetera.
 Within the large existing competition, there is a vast diversity in the operations,
services provided, geographically strategic entities, target groups, financially
diverse groups etc. Healthcare services are not only limited to the hospitals but
also its supplementary services like pharmaceuticals, diagnostics, research labs
and a new addition that is Covid centers. In the field of operations and services
provided, the direct competitors of Max hospitals are other multi specialty
hospitals like Apollo, Lilavati, Care, Manipal et cetera whereas, some hospitals
focus on specific functions like Nowrosjee Wadia in the field of maternity
hospitals and Vasan eye care in the field of ophthalmology. There is also an
diversification in financially targeted groups where majority of those in low
income groups avail facilities of government hospitals.

ii) Threat of new entrant- Healthcare service sector is a rapidly booming industry since
many years. With new technology and growing population, there is always a space for
growth of an industry like healthcare which has many potential customers. At any given
point of time, there is an existing ever growing need for more healthcare services
provider, largely in rural and remote areas. With the coming Covid-19, the scope for
new market entries have further increased due to lack of amenities throughout the
country. During the previous months, the downfall of the Indian healthcare system
urged the government and private companies to invest in healthcare facilities with
promising profits. At the same time there also exists a few barriers to enter into the
existing industry. In this case, switching costs, brand loyalty and capital requirements
may be an obstacle. Starting a hospital or any other healthcare service is a capital
intensive task. It requires funds for numerous operations ranging from land, equipment,
salaries, qualification et cetera. Thus, it is one of the biggest barriers to entry. In recent
years many well renowned hospitals have come into light and brand loyalty is
established within the customers. Thus, an entry of a new organization would struggle
to find a loyal consumer base in a short amount of time. Due to the theory of
 Economies of Scale, it becomes harder for the new entries to make profits as the
consumers and services provided are stagnant thus, bringing them into loss.

iii) Bargaining powers of buyers- The ability of customers to dictate the prices of the
service provided is known as bargaining powers of buyers. According to this parameter,
the more buyers an organization has, the difficult it is to change the prices. According
to the revenues charted by Max hospitals and its competitors, it can be said that the
costumers at Max are relatively less that other organizations. The revenue at the year
end was declared 1384 Crores INR in comparison to 11,273 Crore INR of Apollo
Hospitals. Due to less number of customers in comparison to its competitors, the
hospital has to accommodate lower prices to retain their customers thus incurring loses
and less revenue. The main difference between the competitors is the number services
provided along with the number of locations where the services are operated. Max
Hospital constitutes of 16 service providers in mainly northern states whereas Apollo
Hospitals has 70 branches in the country including in tier 2 and 3 cities. Apollo
Hospital is one of the most expensive hospitals in the country, thus a customer would
experience a positive substitution cost if the decide to switch to Max as their prices are
fairly low.

iv) Bargaining powers of suppliers- Suppliers in the context of healthcare refer to an

authorized medical instruments provider. It can be a person or an agency who provides
medical supplies like machines, wheelchairs et cetera. Suppliers are those who provide
with goods and equipment required to perform the services to the customers. These
equipment include MRI machines, ECG machines, hospital beds, saline and other
medicines, oxygen, crutches et cetera. Supplier’s bargaining power is described as the
ability of suppliers to bring a change in their prices. Although Max is an multi-specialty
hospital, the number of required suppliers is less than its competitors because of less
number of operations. Max does not have a huge variety of suppliers to choose from
mainly because of price constraints.

v) Threat of substitutes- This refers to the possibilities of the customers finding an

alternative to avail the services an organization render. In healthcare service sector,
substitution is not possible. Healthcare service are provided with extensive knowledge
and years of training. This expertise is hard to substitute for any other ways of curing an
ailment or disease. However, with technological interface, online diagnostics of
common disease are common now. Many doctors now interact with patients via various
websites who provide facility to consult specialists without physical attendance. These
services are more cost effective for the consumers thus, switching costs is easier. In
addition to this many online pharmaceutical companies like Netmeds and Pharmeasy
are replacing the traditional methods of medicine market.

Analyzing the strengths and weaknesses of the competitor

Apollo Hospitals Enterprise Limited is an Indian multinational hospital chain with its
headquarters in Chennai, Tamil Nadu, India. It was established by Prathap C. Reddy in 1983.
It is the first corporate medical care supplier in India. The first successful pediatric and adult
liver transplants in India were performed at Apollo Hospitals in November 1998. Apollo has
a total of 70 hospitals in India with 62,939 employees with over 12,000 beds.
 It has best innovation and technological assets to convey the quality administrations to
its clients.
 It is ranked on of the best healthcare service provider in the country.
 It is situated in practically every one of the significant urban and rural areas.
 Apollo hospitals have procured the most qualified and experienced specialists.
 It has over 4000 pharmacies in all parts of the country with best clinical outcomes.
 Apollo hospitals have the most renowned cardiology, neurosciences, transplants,
cancer care, critical care and gastroenterology departments in the country.
 Apart from the services provided, it has Increasing profits every quarter for the past 3
quarters.
 It has an astounding administration since it has a devoted crisis area which keeps an
eye on serious and most significant cases.
 It has also branched its services to a 24 hour available online consultancy portal and
online medication services.
Albeit the above mentioned data, Apollo hospitals have certain drawbacks as follows-
 The branches present in semi-urban and rural areas do not function to full potential.
 The services are not accessible to underprivileged population due to being very
expensive.
 There is an exceptionally high attrition rate among nursing staff.

Critical success factor of Max Healthcare

Max healthcare is one of the largest providers of healthcare services in India with
approximately 3500 beds and 16 super specialty hospitals, diagnostics and integrated home
care services. It is committed to world class services and delivers excellent patient care and
support via the highly trained professional medical staff asked by information systems and
latest technology.

A critical success factor that would make the chain of Max Hospitals stand out is the new and
upcoming technological trend that Max has adopted in this dynamic world- Artificial
Intelligence (AI) powered devices which efficiently integrates the monitoring framework of
its patients. It is claimed to be the first of its kind the country.

This can used to monitor the vitals of the patients with the clinical devices that are integrated
into the technology which are then seamlessly transferred into the electronic medical records
(EMR) which then helps the doctors to make readings and review. All these vitals are
monitored using AI tools which help in the interpretation and also alerts the doctors. Max will
soon make services like cardiac care, hypertension management, daily patient monitoring
through the artificial intelligence technology is made available to its patients. This is an
exemplary effort which differentiates the services of Max from other players in the market.
This initiative helps in enhancing the healthcare services for its patients and are made
available to them at their doorstep because it has been a challenge across the entire medical
and healthcare industry and Max now has an edge by offering such digital services that are
also convenient and easy to use like no one.

The Strategic Groups-

A strategic group is defined as a set of firms within an industry pursuing a similar strategy.
The strategic groups related to healthcare services are dispensaries, pharmacies, diagnostic
labs, covid centres, nursing homes etc.

Some strategic groups at Max healthcare are-

i)Doctor Clinics
The patient often gives their samples for testing right after a doctor’s consultation, as
per the prescription. Max Lab deputes phlebotomists at a doctor’s clinic to collect
samples, for patient’s utmost convenience. In case the tests require fasting, the patient
can also call for free sample collection from home.
ii) Health Checks
The focus of the PHC Programme is on administering a truly standardized and
medically correct set of tests. Unlike others, we do not include or exclude tests just to
make our Programme available at pre-decided prices.
Medically incomplete Preventive Check-Ups can give you a false sense of security, as
they do not include certain tests, which might be of vital importance to you. The Max
Preventive Health Programme is designed keeping in mind the disease risk profile,
which essentially varies with age and gender. On the strength of medical evidence, we
have packages that are just right for you.
iii) Max Lab’s Collection Centres
Max Lab franchises are the pillars of their network, which help to deliver the highest
quality pathology testing with full reliability and service the patients at their
convenience. These exclusive collection centres allow customers to either walk-in or
call for sample collection from their homes. The samples are then sent to the nearest
Max Lab to perform tests at NABL accredited laboratory.

iv) Critical Care @Home

Critical Care @Home is designed for patients who need intensive care services in the
comfort of their homes. The team at MAX patients return home faster from the hospital
yet continue with a high standard of medical & healthcare at home.
Critical Care are usually provided for:
 Neurology patients 
 Cancer patients (including Palliative Care)
 Pulmonology patients
 Cardiac patients
 Nephrology patients
Service Area Competitor Analysis
Service area competitor analysis is a process of understanding the market and identifying and
evaluating competitors. Each service provider in the healthcare sector has formed different
strategies which depends on distance, cost, time, and so on. Therefore, a health care
organization should not only focus on its primary services but also consider aspects of the
service area, including economic, demographic, psychographic, and disease pattern
characteristics.
The following flowchart shows some aspects on which we can compare strategies of our
service provider and its competitors.

 Under the organization determinants, the competitors like Apollo and Fortis have a
edge over Max healthcare.
 They are more well renowned chain of business which helps attract more customers.
 The services provided at the competitors’ organization are more technically advanced
and diversified.
 Although the price levels of competitors are higher, their revenues and customers are
higher due to better services and customer satisfaction.
 In the terms of location and geographical reachability, Max healthcare falls behind as
it does not have many branches. Their services are available to only selected northern
cities in India.
 Whereas competitors like Apollo are spread across various strata of the country.
 The image of the hospital plays an important role in analyzing two organizations. Due
to vast area of operations and a bigger network chain, competitor organizations have a
better image in the market.
 By comparing employee reviews and employee benefits, Max hospitals fall back in
the line compared to its competitor like Apollo. There are bigger incentives, paid
holidays and salaries for employees at Apollo for a similar portfolio.
 Access to the doctors and specialists at Max hospitals is better compared to its
competitors. Its official website is constructed in such a way that a consumer could
easily access all the information on doctors, staff, policies and its subsidiary services
like appointments, consultations etc.
  The number of strategic groups affiliated to Max hospitals is significantly low
compared to its competitors like Apollo. Apollo chain of hospitals have established
complimentary service providers like Apollo Diagnostic, Apollo Fertility, Apollo
White Dental, Apollo Cradle etc. this strategy gives them a competitive edge and
makes more name in the market and among consumers.
 Competitors like Apollo and Fortis have proved to have better transportation services
compared to Max due to their vast network and bigger operational size.
 Under consumer determinants, Apollo hospital gives better and diverse services to its
customers. It has various ancillary at lower costs so that consumers can have a one
stop experience for all their requirements.
Thus, by doing the above competitor analysis of strategies, companies have learned that
by focusing on competitor analysis methods they can have aid in the identification of new
business opportunities, the clarification of emerging ideas, improved ability to anticipate
surprises, and the development of market penetration and market share growth strategies.

Developing new strategy

After critically analyzing the strengths and weakness of Max Healthcare and its components,
we came up with certain HR strategies which will give them a competitive edge in the
internal running of the organization.
The existing employee turnover at Max hospitals is quit high. This can be reasoned out with
the fact that employees including ground staff, nurses and resident doctors are not given
certain employee benefits. When compared to its competitors, Max healthcare lacks proper
plan to supply a satisfactory employee perks. Facilities like training programs are not
conducted at Max for its employees which restricts their individual growth which in turn
hampers the growth of the organization. Thus, the HR department could adopt strategies to
provide on-work growth opportunities to its employees by hiring trained professionals.
Employee benefits like life insurance, paid leaves, disability benefits are not prominent at
Max. These perks are play key role in attracting any employee base in industries this day.
During the pandemic times, it has been proved that these front line workers are important fort
the survival of the society, thus, providing them with the most basic amenities should be
prioritized by the organizations. Other benefits that can be provided to the employees can be
educational assistance, retirement plans, transportation reimbursements, on-site child care etc.
Focusing on developing an employees’ soft skills through seminars and trainings should also
be bought to light which would result in greater customer satisfaction.
In order to further improve the employee model of the organization, we propose a clinician
leadership model in the organisation. Two main stakeholders of the healthcare organization
are employees (doctors, physicians, nurses, ground staff) and business leader/investors.
Clinician theory advices that physicians and business leaders must align each other’s
competencies to establish a qualified, shared decision-making process. By doing so, both the
stakeholders can understand their respective point of views in various fields such as
allocation of funds etc. This would enable a collaboration of a number and analytics oriented
mindset of a businessman and a service oriented mindset of a doctor. This fusion of decision
making process would help in satisfactory reviews from the employees which would also
reflect on better customer services.

References-
 https://healthmanagement.org/c/healthmanagement/issuearticle/seven-innovation-
strategies-to-win-patients-and-staff-1
 https://www.payscale.com/research/IN/Employer=Max_Healthcare/Benefits
 https://www.ambitionbox.com/benefits/apollo-hospitals-benefits
 https://www.maxhealthcare.in/
 http://www.blackwellpublishing.com/swayne/chapter3.pdf