Posted at 12.31.2018
Expansion of the business at the international level requires an research of various environmental issues, so the firm can put into action effective strategies and remove all the road blocks. At both micro and Macro level, there are numerous environmental conditions that have an effect on the performance of Netcare in Medicare Industry, that are as followed:
Issues in the Micro Environmental:
In order to comprehend the various issues at the micro level, the SWOT analysis would be productive:
Strengths of the Company: Netcare has a variety of patent over the medications generally in mental health. Because of this, company has generated itself as a solid brand name in Medicare industry, which is one of the strongest points that effect its performance in the international market. The business has generated a good reputation among the customers through its services. Additionally the services provided by Netcare are of low priced in compare to its opponents and provides a variety of services at a same place. Netcare provides its employees better center to preserve them. The shareholders are being satisfied with constant reputation on the market.
Weaknesses of the business: With the micro level, one of the primary issues for the business that influences company is having less satisfactory ways for the patent safety. The Company is facing problems to safeguard its patent products from being duplicating in the market. Although the company has worldwide presences, but due to the limitations of resources, it includes mainly concentrated in Africa and Europe. The company highly specializes in the region of mental health, which limited the management to give attention to the the areas of Medicare industry.
Opportunity for the Company: The Company can further go for R&D to explore the near future needs of remedies in the field of mental health. Implementation of advances solutions would help the organization to meet their patients well. The company should also focus on the international market along with Africa and European countries.
Threats for the business: On the micro environment, some other important issues are alternative medicines and highly competitive environment. The business of Netcare has been influenced by the replacement products available for sale. The performance of the business also stressed because of the high competitive pressure.
Issues in the Macro Environmental:
In order to understand the many issues at the macro level, the PESTLE research and Porter's five pushes examination would be productive:
Political, Legal and Economic Condition: Financial slowdown and highly restrict regulations of the global countries is one of the biggest problem for the business to expand globally. Based on the Porter five pushes research, enter of new entrants in Medicare industry in some countries is fixed due to the high legal and political regulations, which influences its global image. The monetary slowdown has created a major problem in front of the company. Cash are not coming for the company and to provide a rough competition to its opponents, it requires a huge amount. Additionally, there are extensive constraints on trade undertaking in just a country itself that badly affect the company. The interest of the federal government of different countries also influences the organization.
Technological and Public Conditions: In the technological and interpersonal level, Netcare encounters many obstacles. While using growing populace it is becoming difficult to provide better services to everyone. People are generally not serious about their health and take this quite casually. This affects the corporation in promoting themselves. Additionally, further focus on R&D can improve the firm's product in order to provide better services.
Key Individuals of Change on the market:
On the basis of above SWOT, PEST and Porter's Five Power analysis there are extensive motorists of change in the industry. These motorists are politics, ecumenical, regulatory, and scientific changes. Impressive technology and information systems, has transformed the point of view of Medicare industry. High politics limitations and high authenticity of the medications limit the new players to enter in the industry.
All the firms have to follow transparency and integrity with its suppliers and customers to retain for long run. The bargaining ability of suppliers is high because of limited resources that also shape the progress of the industry. Alternatively, bargaining electric power of consumers are low because they wants highly authenticates medical services because of their good health and effective treatment. Customer consciousness towards health is also a key driver for the changes in the industry.
Additionally, satisfied shareholders and the employees are the important elements in the development of a business and industry. Various other important drivers of the industry are consolidation, strong global competition for market talk about, insufficient researcher, global competition for high skilled employees and availability of capital raising.
Answer 2: Analysis of Competitive Environment of Netcare through porter's Five Pushes Analysis
According to the strategic construction, in this competitive and changing world, there are various makes in the exterior environment of an organization that are more powerful than the organization itself and are beyond their control. These exterior industry environment causes influence the procedures of the organization in a variety of ways and these also help the firm to evaluate the competitive environment. In order to understand the competitive environment of Netcare, Porter's five pressure analysis model is among the finest techniques. Porter's five forces contribute and shape your competition in the Medicare industry to which Netcare belongs, in the following manner:
Threat of New Entrants: Netcare is a well established company and extending its business in South Africa, Saudi Arabia, Canada, UK, Australia, etc. Risk from the new entrants is suprisingly low for the company. In order to enter in the Medicare industry, the organization should have plenty of capital with the licensing and patent of particular drugs. This is one of the most powerful items for Netcare that it has many patents that can't be gained by new players. It also poses economies of scales to control financial slowdown.
In which markets the company runs, the political and legal limitations of these market segments are also barriers for the entrance of new players. Therefore, new companies haven't any hazard for Netcare and also there are high access barrier for the new companies that are preparing to go into the Medicare.
Bargaining Vitality of Customers: This is another drive that affects the competitive condition of the Medicare Industry. Its impact depends upon the possibilities of the potential buyers forming the communities or cartels. The bargaining electric power of the customers influences not only the prices that a company charge from them but also the price and opportunities because powerful customers usually bargain for better services. With this industry the bargaining ability of customer is average. The rival companies are providing consumers with ground breaking healthcare facilities, thus, it is a serious situation for the development of Netcare.
Bargaining Power of Suppliers: Quite often, suppliers too exercise extensive bargaining ability over companies. The more specialized the offering from the supplier, higher is his clout of course, if the suppliers are also limited in amount, they stand a still better chance to demonstrate their bargaining power, which determines the expense of raw materials and other inputs of the industry. Within the Medicare Industry, the suppliers of the natural material usually have high bargaining electric power because of the limited numbers. The company has a limitation to utilize authenticate products and services of health care, thus the bargaining electricity of suppliers is high and competition in extensive for Netcare.
Threats from Substitutes: Substitute products are a potential source of competition in the Medicare Industry. Substitute products offering a price gain and performance improvement to the patients can drastically change the competitive persona of the industry. Although there are numerous problems for the expansion of company, however the medicines and healthcare facilities which have company's patents cannot be provided by any company. Also, in the international market of the business such as South Africa, Europe, UK, etc, the health care and Medicare facilities are at low earth. Thus, menace from alternative products is quite low for Netcare.
Rivalry among Current Players: The rivalry among current or existing players can be an proven fact that can be normally realized as competition. For just about any player, competitors affect prices as well as the expenses of competing on the market, creation facilities, product development, advertising, sales team, etc. With this Medicare industry your competition is intensified because there are many players with ground breaking facilities and health care services they may be equally well balanced. Netcare has lack of effective communication tools, CRM system, and Information technology, which give a competitive edge to its competition. Inadequate funds, lack of proper staff, low morale among employees, etc, are also a problem for the company to increase advantages of rivals.
Strategies used by Netcare to Manage Competition:
In order to control the competitive environment of Global Medicare industry, the business has centered on three strategic approaches operational excellence, Health professionals relationship, and Best and Safest perseverance care. All these three approaches are used by the business to manage competitive environment and create competitive gain over its competition.
In order to keep operational excellence, the business has implemented an application of System Application and Product (SAP) to operate a vehicle the talk about service centers of its all private hospitals. Addition lay the company has also employed the IT enabled services of UK's 28 nursing homes to boost its services and communicate with patients and personnel effectively.
Apart from this, in order to enhance the abilities of workers and retain doctors and physicians for very long time, the company has centered on partnership deals with the physicians and doctors of hostipal wards. The business has invested a large amount in Africa and UK to execute the training time for the physicians and staff members. Additionally, the company has also spent to execute ground breaking technology for nursing training.
By using each one of these technologies and training programs, the business wants to improve the skills and top features of the nursing staff so the company provides better services to the patients as per their expectation as well as create competitive gain over its competition to be always a long term players of global Medicare industry.
Answer 3: Key Issues of Netcare and Recommendations
As Netcare is one of biggest company in Global Medicare Industry. Expansion of a firm in the international market is an extremely critical because of unstable and changing environment. Though it is an effective company, but it in addition has some issues and problem related to external and inner environment. These key issues and the suggestions are as follow:
Patient complaints: Among the main issues of Netcare is the grievances of the patients. Patient's issues are not considered really by the nursing staff and management of the company plus they feel difficulty to join up their complaints. This matter de-motivates patients and diverse them into the other medical facilities provides by the competitors. This may have an effect on the budget and success of the company. In this concern, it's important for Netcare to put into action a CRM program, to solve the concerns of Patients and effectively talk about their issues.
Lack of Facilities for Patient Treatment: Another major problem of Netcare is the lack of enough resources and facilities for the caring of patients. Patient's cares never have been upgraded because so many times which have to be enhanced. But the systems have been upgraded but many facilities that are must be provided to patients are not available in the business. On the other hand, the rivals of the firm are providing latest and innovative healthcare facilities. To be able to resolve this issue, it is essential for the business to implement latest solutions and healthcare services and the number of medical professional should be increased.
Inadequate information of Patients: The management of Netcare is targeted only on the development of medicine, mainly in mental health care, and they have avoid other aspects like execution of Innovative technologies, information and communication system, CRM process, etc. The management and personnel have not any sufficient system to acquire enough information about patients. Patients always roam occasionally in lack of information about where to go. It is vital for the business to execute a IS and CRM system to talk to patients effectively. Notice table should be there to place duty chart and Doctor's locations so the patients will get out their locations easily. Different skin cells need to be made to provide the information regarding different facilities of the organization.
Lack of Proper strategies to apply new facilities and improve the existing Services: The Company also faces the problem in the launch of new health care facilities because of limited resources and insufficient innovative technologies. Additionally, insufficient effective solutions also restricted the firm to improve its existing services and facilities for the existing and future patients. With the growth in technology, it could become quite easy to add new facilities to the patients. It really is being expected from such a big firm like Netcare to obtain these facilities. The health care facilities currently provided by the organization are also not in well condition.
Financial Position: Preserving a strong financial position is also a key challenge for the business. As the business is operating on no income basis and providing free services to some patients, the success of the business is not very good. The company may charge a nominal amount from the patients not to make them habituated of the practice. This would also be beneficial for the company to collect money and execute new information systems. The business can also get make deal with non-profit organizations, administration health care organizations and other health care agencies to
Lack of Effective Nursing Programs for the Staff Members: THE BUSINESS is also battling with the problem of effective training and development program for the employees. On this highly changing and diversified environment, It is actually difficult for the personnel and management of any hospital to satisfy the needs and requirements of every patients. The business has didn't provide highly trained nursing staff because of the lack of nursing staffs technologies. . The company should encourage new person and trained them to be able to gratify the lacking of qualified nursing staff.
Issue related to the Retaining of Doctors in Africa: The most important issue of the business is that because of the insufficient basic facilities in African health care industry, worker turnover of medical staff mainly doctors is high. The business hasn't any proper solution to keep them for long time. The basic facilities in Africa aren't up to the standard, so the doctors aren't willing to remain there. In order to resolve this issue, the business should motivate doctors by providing their appraisal and extra facilities in both economic and non-monetary conditions.
Lack of Progressive Systems that are necessary for the Global Development: Another key concern related to the development and expansion of Netcare is the lack of effective and innovative information systems to accumulate data and analyze the requirements and needs of the clients. The info system and communication facilities through online and offline marketing sources allows the firm to understand the requirements of the patients. With the lack of effective data the efficiency of the business is also being affected. The company should introduce a strong MIS system to aid its work efficiently.
Answer 4: Internal Environment Research through Resource Centered View
The framework of resource established view model is mainly used to recognize the strengths of internal strategic resources of a firm. According to this RBV model, the sources of the company are analyzed based on following factors: Values, Rarity, Inimitability and Non-substitutable. As in this model, main focus is given on these four traits of interior resources to preserve a competitive benefits. In this RBV platform of internal evaluation, all the elements are directly linked with each other and contribute in the success of the company. It really is so, as valuable, rare, inimitable and Non-substitutable resources assist the business in maintaining its competitive advantages.
This RBV examination would be beneficial for Netcare to identify what resources are creating competitive advantages and the way the company can improve its advantages.
Value: According to this component all the sources of the company should create value for the business. When the resources do not deliver value go back to the company, they are simply worthless and boosts operating cost of the business. According to the component, all the sources of an organization have their own value to attain the goals and targets of the business. Company has valuable resources by which it is becoming possible for the management to control profitability.
According to the given research study, Netcare, It has more than 75 medical and oral centers across South Africa. Also, company has more than 18, 877 employees with professional skills and capabilities to manage high quality services for the patients. The business treats it HR and customers as an important strategic asset to develop value for the company. The facilities in South African Medicare industry are not well established, which really is a biggest problem for the business. The doctors and other medical employees do not produce efficiency for the business because of lack of impressive facilities.
Rarity: This is the second component of the platform of this model. In the event the valuable resource is already had by the other group, the business firm cannot contemplate it as the source of fabricating competitive advantage. This is of rarity can be discussed as the critical resources of the company that cannot be sustained by others. Relating to this case study, company's resources are not matched the requirements defined by Rarity. Company has not ground breaking facilities, IS system, CRM process, etc. but its opponents have each one of these system, which is problem for the future progress of the organization.
One of the primary strength of the business is the lot of Patents. Company has many patents and accredited compared to its competitors and it also provides low cost services with a good reputation. Although the business have specialists and capable worker to control with emergence situation compared to its challengers, but it is actually very difficult to match the amount of competitors because of the lack of latest and progressive information systems.
Inimitability: It means distinctiveness, which is one of the main elements to make value of the tactical resources of an organization. Inimitable or unique sources of the business assist the organization to create long-term profits. Success of value and rarity in the tactical resources of group eventually differentiate the sources of the firm and put them in to the lost of unique resources.
According to Netcare case study the particular resources and strengths of the company is its patents and trademarks for the medical facilities. The initial resources that distinct its services and facilities from the rivals are the option of mental treatment and drugs. Insufficient management information system and venture resources planning is one of the weaknesses of the business to build uniqueness and development inimitability among resources. These elements are a good source to control the changing weather of the economy. Because of the innovations and unpredictable business environment, development of inimitability is a complicated task for the business firms.
It is very hard for Netcare to attain inimitability in the organizations, but uses of high quality procedures and knowledge of experts can help to achieve a ecological competitive gain.
Non-substitutable: This factor of the tool structured view model is mainly dependent upon the accomplishment of the sustainable competitive edge for the companies and the resources that are non-substitutable. If the company have non-substitutable resources, it would be problematic for the competitors to handle the strategic performance of the company. The effective approach of company in mental healthcare sectors and patents and trademark of medicines are the non-substitutable products for the company.
The medications and heath facilities, which have company's patent are non-substitutable products and services to create competitive advantage. Apart from this, in the European, African and UK market segments, where the health care facilities are in low surface the medical services of mental health provide by Netcare are really appreciable and beneficial for the progress of the company. These non-substitutable resources will also assist the organization in fulfilling certain requirements of the task push and providing support to them for effectively undertaking in the task environment.
Answer 5: Strategic Strategy of Netcare
As Netcare is operating at the international level, they have made a decision to use different tactical approaches to achieve success. Netcare has used mainly three ways of support its business like HR strategy, transformational strategy and development strategy. These three proper approaches of the business enterprise organization have greatly influenced the entire business performance of the business. According to the given research study, Netcare is suffering with the issues like ineffective management of HR and other tangible resources.
As its business is resolved in South Africa and it is absolutely very difficult to wthhold the skilled folks and doctors in this industry for long time, due to the lack of effective facilities and higher income. All these three strategic techniques are also given in the module.
Strategic Approach to manage HR:
Netcare was facing problem with the lack of nursing personnel as the skilled nursing staff do not want to work in South Africa. Thus, it is vital of Netcare to look at different HR strategy and provide training and development programs to support its business in South Africa as well as achieve success in UK. These training and development programs would allow the business to inspire employees to be the part of company for long lasting.
To handle this example Netcare has used its HR strategy quite proficiently to overcome this issue. Netcare has started providing training to the medical staff and the as it includes increased their quantity also to be able to overcome this example. In 2007 only Netcare has trained more than 3700 nurses under this strategy. Netcare is rolling out special packages for nurses to maintain them with the company as well.
The company in addition has wisely used its HR strategy in order to sustain doctors in South Africa. As the country is not well toned so the doctors from other countries do not need to stay there. By using this strategy, the company has become in a position to preserve doctors and established the company as employer of choice.
As an integral part of its HR strategy Netcare has launched relationship plans with the doctors in UK and broadened more than 60 practice development groups across their hospitals. Netcare has provided state-of-the-art facilities to its doctors. It has helped the business to catch the attention of additional 162 medical specialists in the year 2007.
Approach of Transformation Strategy:
Netcare has successfully implicit the change strategy throughout its procedures and the contemporary society in which it operates. As a part of this plan Netcare has spent R 37 million on corporate cultural investment. The transformational strategy of the business is dependant on the moral point of view which includes the clear and the target to be performed. These strategies of the business generally focus occupation equity and organization development essentially in South Africa.
As an integral part of this strategy company has entered in a relationship with the government to improve the healthcare sector in the united states. Netcare in addition has provided holistic method for those families as a part of this strategy who cannot spend the money for private professional medical. Netcare has developed different answers to cater the need of its shareholder to be able to support their go back. As Netcare has been the first choice on the market though it has to take further action to serve all of those other culture in Africa as competition is highly producing in the sector.
Company has given emphasis to its public responsibility as part of its strategy. The strategy has helped the company to be ranked among the very best on the market. The strategy has helped the business to come up with new and advanced technology to serve the population better.
Approach of Development Strategy:
Expansion strategy is another strategy that company followed to be able to internationalize itself. Netcare has also begun its businesses outside Africa in the year 1997. In the year 2002 Netcare first got into the united kingdom with the collaboration with NHS and seen the possibility to explore there. Netcare has greatly used its acquisition strategy to generate high earnings rather than low expansion rate of the industry in UK. The business has also harvested through PPP strategy that has been popularized in the encompassing market segments of South Africa.
As a part of this strategy company has opened up 91 bed private hospitals with the aid of Nalithemba Hospital. These initiatives have provided company with strong occurrence in PPP and allowed the management to grow internationally. Netcare has effectively implemented the penetration strategy in UK as a result of similar dynamics of market. In order to meet its growth strategy the company has gone through various acquisitions.
The company has takeover BMI Professional medical one of the largest private medical center in UK to aid its business outdoors. This acquisition has provided company with strong great infrastructure, property and facilities. This acquisition has established company as a respected international health care-solution.
As a part of its internationalization the company entered in a higher profile jv with Rwanda administration to open a world class hospital. This has helped company to get familiar with the social and cultural craze of the country to help expand expand. Netcare also look for the opportunities far away and it is rolling out an international department to consider opportunities. The division has contributed almost R 80 million to the earnings of the company mainly through patient referral. Netcare is now looking for further enlargement either by acquisition or by public private partnership to aid its internationalization.
Answer 6: Id and Evaluation of varied Options to Continue Competitive Benefit in Netcare
In order to become successful and remain competitive in this highly changing and competitive environment, Netcare is approaching middle age. It is necessary for Netcare to keep its competitive advantage by utilizing its key competencies and minimize its weaknesses. To be able to cope with the opponents in the international market and remain profitable it is vital to apply some ways of maintain competitive benefits and utilize the opportunities available in the international market.
Netcare is continually growing its market in both South Africa and UK. The Medicare industry of South Africa and UK is not so developed and well established, thus it is a challenging duties for Netcare to compete for permanent. Netcare should think about different options that ensure it about ongoing competitive advantages and long term success. Some options and advice for Netcare to retail long term competitive benefit are the following:
Low Cost & High Level Service: Netcare provides low cost service to its customers with an array of services. But the Medicare industry of South Africa and UK is highly critical but the still company help with good quality services and huge range of medicines within low priced, so that the patients can get brilliance services.
It allows Netcare to deal with different private patients because these patients easily find the money for Netcare's services. So, it is strongly recommended to Netcare that it should maintain its low cost for customer by reducing its service cost. It should also keep up with the wide selection of services at lower rate. It could reduces its service cost by reducing the income cost because of its employees and by purchasing the necessary equipment at less expensive. At the same time it is also important for Netcare to maintain the grade of services. In order to improve its profitability, the company should package with the non-profit organizations and other administration health establishments to provide impressive machineries and techniques for the speedy check up of patients.
Use of Practice Physician: In private medical center businesses basic practice physician takes on an important role to improve the operational excellence and improve quality of services. Thus, it is vital for the business to Hire practitioner and professionals in different medical filed. Also, the company should employ the service of assistants and nursing personnel for these practitioners and physicians, in order to serve patients patiently within minimum amount time. Progressive information system and other medical technology would also help the health professionals to provide the patients in a better way.
Netcare also provides advanced of training program to these physicians. It can help Netcare to appeal to large number of physicians because of its service. According to the case, in the united kingdom, Netcare launched a relationship techniques with doctor and set up practice development group that provides their services across all the private hospitals. So, it is recommended to Netcare that it will start those partnership schemes in South Africa also that make it in several ways.
Combination of Experience Senior Team: Netcare should incorporate the experienced older team from both South Africa and UK to keep its competitive advantage in both markets. Combination of older groups with fresher practitioners will reduce the excess cost of recruitment. It is because if blend doesn't take place then it will increase this cost. Thus, it can help Netcare to increase its business and keep maintaining competitive advantages.
Implementation of various IT and MIS systems: In order to improve the operational excellence the organization should apply various IS system and CRM programs to keep patient databases. As the company has performed SAP system in South Africa, it will also put into action this service in UK industry. It offers efficiency available procedure. Netcare should make an effort to assimilate all its clinics from both South Africa and the united kingdom through the use of IT system.
It is because by using IT system important info is easily transferred from one spot to another and helps in conserving both time and cost for Netcare. By using IT and communication systems, older managers and older staff can easily transfer their experience with other inexperience staff in a short time period.
Clinical Governance Program: Netcare should start a medical governance program that helps in explaining about clinical pathways such as reduce variability from services and offer safer good care to patients. In order to control trauma and ICU illness, Netcare is rolling out its own medical governance guidelines. That is one of the most powerful points of the company.
This helps Netcare to diminish the hospital infection rate in South Africa. The program increases the number of patients for Netcare. It is recommended to Netcare that it will keep up with the performance of this program and also try to get this to program effective.
Skilled and talented RECRUITING: In Netcare, as there exists lack of skilled nurses because of its business, so it is necessary that Netcare to employ experts and trained nurses. It will produce a post of workplace who would be responsible for the recruitment and development of the nurses. It will also find the skilled personnel through effective recruitment and selection where, people would come from different countries with different skills.
With the help of above tips, it might be beneficial for Netcare to keep its competitive advantage and maintain its profitable position in the critical and turbulence environment of Medicare Industry.