Apollo Hospitals: A Porter Five (5) Forces Analysis

Application of this model can help Apollo Hospitals of India to determine the industry attractiveness
and understand its competitive positioning in the market. The analysis can also be used to make
some strategically wise decisions that could improve the performance of Apollo Hospitals of India A
and ensure long-term survival.

Threats of new entrants

Threat of new entrants reflects how new market players impose threats to the existing market
players. If the industry will be profitable and barriers to enter the industry will be low, it will attract
more players and hence, the threat of new entrants will be high.
The threat of new entry is quite high: if anyone looks as if they’re making a sustained profit, new
competitors can come into the industry easily, reducing profits;
Ex.- Fortis, Max, Escort , WOCKHARDT and DUNCANS GLENEAGLES INTERNATIONAL

Threat of Substitute Products or services

The availability of substitute products or services makes the competitive environment challenging
for Apollo Hospitals of India A and other existing players. High substitute threat shows that
customers can use alternative products/services from other industries to meet their needs. Various
factors determine the intensity of this threat for Apollo Hospitals.
There is some threat of substitution.
Ex Telemedicine or shifting to other medicine like Ayurveda or natural care.

Rivalry among existing firms

The Rivalry among existing firms shows the number of competitors that give tough competition to
the Apollo Hospitals of India A High rivalry shows Apollo Hospitals of India A can face strong pressure
from the rival firms, which can limit each other’s growth potential. Profitability in such industries is
low as firms adopt aggressive targeting and pricing strategies against each other.
Competitive rivalry is extremely high: if someone raises prices, they’ll be quickly undercut. Intense
competition puts strong downward pressure on prices.

Bargaining Power of Suppliers

Bargaining power of suppliers in the Porter 5 force model reflects the pressure exerted by suppliers
on business organisations by adopting different tactics like reducing the product availability,
reducing the quality or increasing the prices. When suppliers have strong bargaining power, it costs
the buyers- (business organisations). Moreover, high supplier bargaining power can increase the
competition in the industry and lower the profit and growth potential for Apollo Hospitals of India A
Similarly, weak supplier power can make the industry more attractive due to high profitability and
growth potential.

Bargaining Power of Buyers.

Bargaining power of buyers indicates the pressure that customers exert on the business
organisations to get high quality products at affordable prices with excellent customer service. This
force directly influences the Apollo Hospitals of India A’s ability to accomplish the business
objectives. Strong bargaining power lowers profitability and makes the industry more competitive.
Whereas, when buyer power is weak, it makes the industry less competitive and increase the
profitability and growth opportunities for Apollo Hospitals
Buyer Power is strong, again implying strong downward pressure on prices.
PESTEL Analysis
1) Every government policy , will result in a significant impact on business rules Apollo
hospital , so politics is to increase the risk factor Apollo Hospital . Since India’s independence
in 1947 , the government established an Indian for all public health system .The Government
will not only help the public hospital , it can stabilize the operation , but also to encourage
the healthy development of private hospitals . This is the public, private hospitals
coexistence situation , so that the whole of India ‘s medical institutions ( including the Apollo
Hospital ) , to get a good space for development.
2) Economical:

 Social/Economic factor;

Due to lack of funds in India , public hospitals can not meet the needs of all Indians . In order
to maintain the public health system can effectively run , the Indian government increased
private funding of the hospital, so that private hospitals to get more profit in the case , the use
of their profits back to society, reduce the burden on public hospitals .This makes the Apollo
Hospitals have more money , equipment and optimization within the hospital environment ,
while better reputation, in order to attract more customers.

 Technology factor;

Apollo Hospitals not only has the world’s most advanced medical equipment , the world’s
leading medical technology, and every doctor of medicine are very skilled in many medical
fields have reached world-class level of treatment .With these excellent treatment conditions ,
can greatly enhance the therapeutic effect, while the low price makes the world come to
attract patients in treatment.Especially for Western people, these good and cheap Hospital ,
Western countries can not be given , so for the people of the West has great appeal .

 Environmental policies factor;

While India gives the impression that more is dirty , messy, poor conditions , but in the
overall health situation is not very ideal conditions, medical standards in India compared to
other developing countries is much better.Indian star standard management practice for
hospital and medical care for its health care standards and hardware facilities as standard,
divided Samsung, three four-star and five-star standards. Apollo hospital with its comfortable
environment , clean equipment , has won the praise given to patients with various countries .

 Globalization factor:

Forces of globalization also affects the Indian healthcare industry . Apollo Hospital active
medical outsourcing , the annual revenue for the UK to provide medical services to more than
$ 1 billion . This makes Britain the patient to see a doctor at the hospital queuing time is
much shorter . This shows that the forces of globalization for India ‘s economy because of the
rapid development of the medical industry , while the effects of globalization can be made
stronger so that Apollo Hospitals greater.
STRATEGIC GROUP MAPPING

Strategic Groups:
1) Large scale Pvt Hospitals
2) Private Hospitals with basic facilities
3) Govt. Hospitals with basic facilities
4) Specialised private and Govt Hospitals
5) Ayurveda, Unani, Siddha based Hospitals
6) Government General Hospitals eg. Sadar Hospitals, AIIMS etc

Two main variables taken are:

1) Extent of service
 Concentrated Treatments
 Basic
 Supplementary
2) Geographical Dispersion
Low
High

Strategic Group Analysis Map

Competitive Landscape
Value Proposition: