ans assignment bbps4103 strategic management sept 09
TRANSCRIPT
FACULTY OF BUSINESS AND MANAGEMENT
BBPS4103STRATEGIC MANAGEMENT
Name: LIOW SOON SENG
Matric Number: 640701015439002
NRIC : 640701015439
H/P: 013-7458858
E-mail:[email protected]
Tutor’s Name: Madam Yeoh Siok Tee
Learning Centre: PPT Batu Pahat
SEPTEMBER 2009 SEMESTER
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Table of Content
1.0 Introduction Page 3 -- 5
2.0 Corporate Core Values Page 6
3.0 SWOT Analysis Page 7 - 10
4.0 Impact of External Threat Page 11
5.0 Recommended Strategy Implementation Page 12 – 13
based on its Strength and Opportunities
6.0 Recommended Solutions to Weakness and Threats Page 14 - 15
7.0 Conclusion Page 15
8.0 References Page 16
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1.0 Introduction
This case analysis examines the external analysis of the environment, the
internal analysis of the organization and industry analysis of a private hospital in
Malaysia. Its analyses SUNWAY MEDICAL CENTREL ( “SunMed” ) by showing the
analysis of its immediate opportunities and threats, strength and weakness, and
further providing the alternative strategies in order to position itself vis-à-vis the other
competitors, capitalize on the sector’s growth potential and strengthen market
position in the industry.
The Healthcare Industry
The private healthcare in Malaysia has been growth at the tremendous rate
for the past decade. According to Malaysia Health minister, Dato Liow Tiong Lai on
his recent speech at ASIA HEALTH 2009 CONFERENCE in August 2009, there was
an increase the number of private hospital beds from 1,171 in 1980 to 11,689 in the
year of 2008, in term of numbers of private hospital in the same period, with less than
50 hospital to current 240 hospital and keep increasing. Currently there are about
25% of the total hospitals beds are in the private sector which share 43% of total
healthcare expenditures. The private healthcare industry is dominate by Kumpulan
Perubatan Johor (KPJ) and Pantai group, which control some 19% and 16%
respectively of the market, the remaining market shares distribute among others 238
private hospitals, as most others private healthcare groups with associate hospital at
various location in Malaysia, Sunway Medical Central have only one single medical
hospital centralised in Petaling Jaya with market share of less than 1%.
The Company Background
The Sunway Group is one of Malaysia’s most widely recognized and
diversified conglomerates of established businesses covering civil engineering and
construction, property development, leisure, entertainment, healthcare and
education. The group encompasses two Main Board listed companies, Sunway
Holding Berhad and Sunway City Berhad. Sunway Holding Berhad core business is
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in construction, building, manufacturing and quarry while Sunway City Berhad is
involved in property business investment and also in hospitality, healthcare and
education industries.
Sunway Medical Centre (SunMed) is one of the private hospital offering
specialized and tertiary medical care services in Malaysia, this medical specialist
centre is under one of the business sector of Sunway City Berhad. It located at
strategic and well-developed township in Bandar Sunway, Petaling Jaya, Selangor.
Under its latest major expansion and renovations plans for the hospital building, the
hospital areas are expanded from 22,219M² to 60,803M². The medical centre
equipped with advanced medical technology with professional clinical expertise and
experience nursing staff for various healthcare needs.
The Vision
The vision of Sunway Medical Centre is:-
To be a world class, health care organization of choice
This vision statement defines this health care organization’s focus on the
clear direction to steer the organization into future to be a world class healthcare
organization of choice, to meet this vision, its must have excellent services in term of
quality and its competitiveness, this vision provides the direction which is vital for
identifying successful strategies for the organization.
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The Mission
The mission of Sunway Medical Centre is:
We committed to provide:-
To provide professional, innovative quality services that exceeds customer
expectation.
To provide value added services.
To provide modern, comprehensive and safe facilities and environment.
To provide continuous development of human capital.
To provide satisfactory return to shareholders.
This mission statement showing Sunway Medical Centre commitment in
translating their vision of the organization into the reality by prioritized their
professionalism in quality services that exceeds customer expectation, quality
services here means provides the best medical treatments that is exceed the
standard expectation and values by customers. Through their modern,
comprehensive facilities and competent human resources, provides the customers
with safe and comfortable environment. At the same time, it also has duty to fulfill the
expectation of its shareholder on satisfactory return.
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2.0 Corporate Core Values
The corporate Values of Sunway Medical Centre are:-
Customer Service Excellence – To meet and exceed customer’s
expectation by providing professional and comfortable healthcare
services start from admission to recovery process.
Effective teamwork – Working together to achieve common goal,
objectives or business results inline with the corporate mission by our
delicate and experienced staffs of all processes, regardless of what
levels they belongs.
Quality consciousness – Doing the right things right, every time.
Based on this quality policy, we always look for further improvement on
all the processes in order to provide best healthcare practices.
Motivating Leadership – Effectively lead, inspire and mentor staff to
achieve organization goals and objectives. All leaders will create a good
surrounding or environment and emphasis good moral values in leading
his teams meeting the organisation’s goals.
Result Driven – Ensure short term and long term goals are met in a
timely manner. Always aims for further achievement in order to stayed
competitive in the healthcare service industry.
The corporate values of Sunway Medical centre reflects the value and
priorities of their strategic decision through their customers by providing excellence
and quality professional services that exceed customer’s expectation; to achieve this,
its must have an effective management team which have common goals and quality
consciousness. A motivating leadership is able to lead them to success; and finally a
result driven evaluation for their performance. Fulfill and exceed customers
expectation is the priority
3.0 SWOT Analysis
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The following SWOT analysis will focus on identifying and evaluating external
environment of internal organizational factors that have direct or indirectly impact on
the organization performance. Sunway Medical Centre need to analysis the
opportunities and threats which emerged from external environment, as well as
internal organisation’s strength and weakness in order to formulate a strategic plan
according to these changes.
Opportunities
Current global economic downturn have made people in developed country
like USA, Canada and UK to cross boarder to seek affordable and low cost
healthcare in developing country like in Malaysia, Thailand and India, as a result,
Medical Tourism is fast booming and get attention in Developing country. According
to the report from Association of Private Hospital Malaysia, the revenue from health
tourism was increase and growing at 30% a year from year 2000 to 2007, and
forecast to continue until year 2010, it is expected total of RM584 million in medical
revenue will be generated.
In the social perspective, Malaysia’s population is expected to grows from
current about 26 million to 32 million by 2020, the healthcare sector is expected
continue to grow. On top of this, a large portion of older age of 65 years and above
population will increase the demand for healthcare services. The country’s healthcare
expenditure is expected to grow from the current 3% of GDP to 6% of GDP by 2020.
Together with rising household income and improved life quality, private hospitals like
Sunway Medical Centre may benefit by capture this business segment opportunities.
Changing in lifestyle are boosting the spending on healthcare, this is due to
unhealthy urbanized fast food which causes obesity problem, as well as increasing
number of smokers, all these leading to lifestyle related diseases like respiratory
diseases and cancer, diabetes, high blood pressure and heart-related diseases,
while treatment for all these will increase healthcare spending and demanding,
Sunway Medical Centre may benefits from this trends, at the same time, private
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hospitals may have more people looking for preventive healthcare services due to
awareness in health prevention.
The advancement of technology had gives various opportunities for the
growth in healthcare industry. The high technology facilities enable more critical
sickness and dieses can be cure, as well as more advance diagnosis and prevention
measures which diversify healthcare industry into more important business
segments. The fast advancement of information communication technology enable
private hospitals advertised effectively, through the web portal, patients can accesses
the essential. The intensive development of pharmaceutical and medical related
activities are creating new products and services, Sunway Medical Centre may not
directly involved but will benefits indirectly for their business sector.
Threats
The global economic downturn had resulting decline in purchasing power, this
indirectly affecting patients seeking medical treatment when this groups of patients
try to seeks medical assistance from public hospitals, the private healthcare sector
like Sunway Medical Centre may see a lower than expected patients visits and
admission, at the same time, increasing number of new setting up private hospitals
will further threaten the patients source for Sunway Medical Centre, all of these
factors will further lead to lower utilization of expensive medical equipment facilities,
as well as high wages human resources for this sector, all of these will added up and
increase the hospital’s operation cost causes the hospital can’t offers their services
with a competitive price, this will be major threat to Sunway Medical Centre.
Another threat for Sunway Medical Centre is the brain drain where lack of
qualified doctors and specialists, this situation worsen when many new private
hospitals from oversea are setting up their branches in Malaysia, for example The
Columbia Asia Medical group are setting up another 4 medical centres in the country,
this will casing the shortage of human resources in medical sector especially the
experienced doctors, this may become key threat for Sunway Medical Centre of any
expansion plan, as well as existing human resource for its hospital.
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From political perspective, under the Private Hospital Act 1971, government is
monitoring and regulates private hospitals operation, this act set certain requirement,
for example, all recruitment of nurses must least 60% from local, and this may lead to
difficulty for private hospital in human resources recruitment. Government
intervention in healthcare industry is more on social goals. However, excessive
regulation may become threats for continual growth in the healthcare industry which
will become another threat for Sunway Medical Centre.
Strength
Being one of the subsidiary companies in SUNWAY GROUP, Malaysia’s
most widely recognized and diversified conglomerates with a multitude of established
businesses, Sunway Medical Centre have strength derived from its parental
company’s perceptive and transparent policies and visionary leadership, as well as
financial stability for future development. SUNWAY is well known recognized brand
name in property, construction and leisure sectors, Sunway Medical Centre is directly
benefited from this by delivering same level of quality services as its sister
companies did, this become one of the strength in marketing their products and
services.
The successes of SUNWAY GROUP came from their visionary leadership
management and perceptive corporate policies. Sunway Medical Centre is definitely
inherited the good management approaches and corporate polices into their
organization management, this will be their major strength in management.
Sunway Medical Centre is using Total Quality Management ( TQM ) approach
in their operational activities, many accredited awards received acknowledge their
continuous improvement in operational excellence and patient safety, example ISO
9001:2008, MS ISO15189 and Malaysian Society for Quality in Health ( MSQH)
accredited private hospital certification in process and medical testing standard in
patient safety, Asia Hospital Management award, .and many others, this TQM
approach is one of their strength in their total services and operational functions.
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Beside marketing through conventional advertising media and internet,
Sunway Medical Centre also have advantage of it wide marketing chains network
from its sister companies in other sector, example in healthcare tourism segment,
both Sunway Group’s leisure and entertainment sector may inter-related and
complimenting each others.
In the research and development, Sunway Medical Centre is an institution
affiliated to Tan Sri Jeffrey Cheah School of Medicine, Monash University Malaysia,
only a few of Malaysia private hospitals have affiliated to medical institution, example
University Malaya Specialist Centre S/B and Kumpulan Perubatan Johor ( KPJ ).
This is one of the strength not only in medical research and development, but also
provided the medical human resources needs where most of private hospitals are
facing the human resources shortages.
Weakness
Being a single location hospital in Petaling Jaya, Sunway Medical Centre
having a weakness in getting the potential patients nearby, as compare to others
hospitals like Kumpulan Perubatan Johor and Pantai group which have many
hospitals covering most strategic cities in Malaysia, this weakness become more
critical in term of patients sources when other private specialist hospitals nearby try
to capture same area patients source, the competition will become fierce. In term of f
medical services ranges that offers in private healthcare, compare to these industry
key players like Pantai’s Group which offers wide range of medical services through
its group’s hospitals, Sunway Medical Centre have weakness in offering
comprehensive range of medical services due to its single location medical centre.
In Malaysia, ratio of doctors and patients still very low compare to developed
country, public and private hospitals are facing the doctor shortage, Sunway Medical
Centre too facing shortage of medical personals and brain drain problem especially
the highly experience medical specialists.
4.0 Impact of External Threat
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One of major threat of Sunway Medical Centre is the competitive demand and
shortage of medical human resources in healthcare industry, this brain drain problem
where lack of qualified doctors, specialists and experienced nurses keep continuing
with opening of new private hospitals, many Malaysia doctors and specialists are
choose to adopted for oversea that have better remuneration packages and quality of
life, similarly for many highly qualified nurses also choose to higher remuneration
offers country like in the Middle East.
This threat is giving great impact for Sunway Medical Centre competitiveness in
the industry. Shortage of experienced medical doctors and nurses will seen as
hindrance against any expansion plan for Sunway Medical Centre, as well as existing
services offering. Some of special medical treatments may unable to perform or
delayed due to lacks of specialist doctors, the patients will gradually turn away to
others medical specialist hospital for treatment, this will definitely affecting hospital’s
business revenue and performance.
Competition among private hospitals will be challenging which will become
more demanding and complex in achieving its organization performance, as such,
Sunway Medical Centre must have strategic plan management with more creative
and innovative in order to remain competitive and sustain their competitive over
others in this industry.
5.0Recommended Strategy Implementation
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Based on its Strength and Opportunities
After the opportunities, threats, strength and weakness of Sunway Medical
centre had been identified from SWOP analysis, few recommendations of strategies
can be implemented in future that can ensure organization success and superior
performance.
As mentioned earlier in SWOT analysis, the booming growth of healthcare
tourism in developing countries particularly in Malaysia provided good opportunities
for private healthcare hospitals especially to Sunway Medical Centre, this market
segment have high market growth rate where government forecast there will be 30%
increase annually of people entering country for medical purposes, and by year 2010,
the segment is expected to bring in some MYR 2.0 billion in revenue. With such big
market, Sunway Medical Centre must capture more market share by combining the
strength of its sister company in hospitality and leisure sector by linking up the hotel
accommodation together with health screening and medical check-up..
Oversea patients may not come alone for medical purposes, they will have
companied by their relatives or next of kin, a package combining healthcare,
hospitality, travel and leisure will be seen attractive for them. Furthermore, Sunway
Medical Centre have cost advantage compare to competitor in neboring country like
Singapore which have higher medical cost, as well as Thailand where political
instability make them less competitive.
Changing life style and unhealthy eating habits have caused rapid growth of
many critical diseases which some cases may required advanced and expensive
medical equipment facilities, some of this special equipment facilities still not
available in Malaysia, even local patients need to seek this special medical treatment
in Singapore or Australia, Sunway Medical Centre should grasps the opportunities of
this increasing patients source by upgrading its medical facilities into more advance
and high technology nature so that can compete with its rivalry. Based on its strong
financial track records shown by Sunway’s Group, financially should be its strength
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compare to others specialist hospitals in investing in high technology medical
facilities.
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6.0 Recommended Solutions to Weakness and Threats
As previously mentioned in analysis, being a single hospital in one location, its
have disadvantage of limited number of patients or customers source. If Sunway
Medical Centre focuses on this special medical services and treatment which other
hospitals can’t offer, definitely it will offset this weakness. While others private
hospitals all are offering almost same medical treatment, Sunway Medical Centre
should aims for niche market which the key idea is specialization, invest in special
medical equipments for special critical diseases treatment where other hospitals can’t
offer. In the Blue Ocean business strategy concern, Sunway Medical Centre need to
develop uncontested market space and make competition irrelevant, instead swim to
“ red ocean “ of offering services that have high competition, this niche services
should introduce where other competitors have not yet step in.
The brain drain where shortage of qualified nurses, doctors and specialists
become key threat for Sunway Medical Centre, the situation keep worsen when
number of newly set-up hospitals keep increasing. To overcome this brain drain
problem, Sunway Medical Centre may consider the strategies to allow doctors or
specialists to have their private wing or clinics in the hospital, this will allow doctors or
specialists to earn extra income while serving to the hospital. Some private hospitals
are implemented this strategy, as well as public hospital where brain drain happened
most critical here. In addition to this, Sunway medical centre should consider profits
sharing for employees by giving company’s share or rewards based on department
performance, so that all employees will have feeling of sense of belonging.
In the operational perspective, Sunway Medical Centre must improve its
operational efficiency by maximize the use of Information Communication
Technology (ICT) into their process. For example by ultilised the internet online
facilities, the patient will access the information of required specialist doctor, pre-
registered and make appointment online prior to admission. This will not only shorten
the waiting time for patients, it also simplified the hospital’s admission process and
manpower required, this indirectly offset the problem of manpower shortage. Sunway
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Medical Centre must apply ICT approaches comprehensively into their organization
like in finance, operational process and human resource.
7.0 Conclusion
Growth in private healthcare sector is expected to continue as demand for
medical healthcare is increase, mainly due to an aging population and changing
lifestyle. On the other hand, healthcare tourism is fast developing sector in healthcare
industry which have large market potential in earning revenue, Sunway Medical
Centre, combining its group’s strength in travel, leisure and hospital sectors, should
focus its strategy on capturing market share of this healthcare tourism, which is
expected to be a main growth driver for this industry.
Considering its strength and weakness compare with key players or
competitors in the industry, Sunway Medical Centre should opted for the Blue Ocean
business strategy by aims for niche market which the key idea is specialization,
invest in special medical equipments for special critical diseases treatment where
other hospitals can’t offer locally.
Sunway Medical Centre must continue deliver high quality of healthcare
services responds to external and internal challenges maximize the use of ICT in
their operations and re-engineering organization management is necessary to
enhance and improve their competitiveness advantages and generate greater
revenue.
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8.0 References
http://www.sunway.com.my/
http://www.sunway.com.my/sunmed/main.asp
http://www.sunway.com.my/sunmed/vision.htm. Retrieved on 10.10.2009 .
http://www.hospitals-malaysia.org/index.cfm?menuid=4 . Retrieved on 5.10.2009.
Gan, K.K (2007) PINK OF HEALTH: A research of the local healthcare industry
AmResearch Sdn Bhd. http://kpj.listedcompany.com/misc/analyst/am170107.pdf
Retrieved on 5.10.2009.
BBPS4103 Strategic Management, (version May 2009) Open University Malaysia
Module, UNITEM Sdn Bhd.
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