Assalamualaikum..
What have I learned
this week?
Today, I would mind to
share about our case study discussion in tutorial class for the past few weeks.
The cases study that
has been discussed is KPJ HEALTHCARE GROUP.
Kumpulan Perubatan Johor (KPJ) Healthcare Group was the largest public-listed Healthcare service provider in Malaysia. At the time KPJ operated 19 hospitals in Malaysia and managed two hospitals in Indonesia. However, in 2008, the effect of the US financial crisis was felt in many countries, including in Malaysia. Then because of this crisis the demand for KPJ Hospital services may decrease.
Kumpulan Perubatan Johor (KPJ) Healthcare Group was the largest public-listed Healthcare service provider in Malaysia. At the time KPJ operated 19 hospitals in Malaysia and managed two hospitals in Indonesia. However, in 2008, the effect of the US financial crisis was felt in many countries, including in Malaysia. Then because of this crisis the demand for KPJ Hospital services may decrease.
Then, by the end 2009,
pressure was mounting on Siti Sa’diah and her management team to make urgent
decisions on how to survive the economic slowdown and The team had three
options, first is KPJ Healthcare Group could expand its business by focusing on
the medical tourism market, which was expected to continue growing in the next
few years, then KPJ could expand its college business, in particular because of
the need to provide nurses to its
own hospitals and also to support overall rapid expansion of the medical
markets or KPJ could further expand its international market.
Moreover, in order to
growth the strategies in KPJ Healthcare they have to issue of funding the
business expansions. While in 2006, the effort to raise funds for its business expansion,
KPJ initiated a major shift in its corporate strategy from being an entirely
asset-based company to one that stayed light on its assets through
securitization and was accomplished with the establishment Al-‘Aqar KPJ Real
Estate Investment Trusts (REIT), which had played an important role in
facilitating KPJ’s strategic expansions (KPJ Healthcare). Grow the company’s
business.
The question that has
been given by Madam Ummi was what were the strategies implemented by KPJ
Healthcare prior to 2009?
It was secondary level
strategies when KPJ Healthcare was have expansion strategies with Puteri
Nursing College with the objective of providing nursing education and providing
the human resources required by its group of companies and also the country in
1990 in order to opened their education nursing. While in corporate level
strategies under the tactical strategies, KPJ Healthcare was partnered with
Penawar Hospital through a joint-venture agreement of 30-70 percent share in
1995. In addition, in 2002, KPJ Healthcare also established a joint-venture
project with the Kelantan State Economic Development Corporation to operate the
Perdana Specialist Hospital in Kota Bharu, Kelantan. In 2002, KPJ established a
subsidiary, Pharmaserv Alliances, which functioned as a wholesaler and
distributor of pharmaceutical, medical product, and other hospital related
products focusing on servicing KPJ-owned hospitals
The second question was
based on the company goals, propose 3 strategies options for growth in KPJ
HEALTHCARE.
From my opinion, KPJ needs to establish some
strategies that may help them to support their strategic expansion. First of
all, we think that KPJ need to do a joint venture with international companies
such as from Indonesia, Singapore, Thailand and any other countries. Expansion
plan will support KPJ for a long term growth. Competition was getting intense a
more players are including foreign based private healthcare providers were
entering the Malaysian market.
Even though the
competition was good, KPJ need to move faster to enter foreign market as well.
The competition was good as it can help to increase the standard of the private
healthcare services. In the next following year, KPJ should focus to do joint
ventures with private hospital in foreign market to promote their names in
international market. KPJ need to make a new entry outside Malaysia because
their names are formally known in this country.
The second strategy
that needs to be paid attention is organically grown by backward regression.
KPJ needs to think something new such as to produce their own medicine and be a
supplier of that product to another hospital, clinic or pharmacy. Their
customers also do not need to go to KPJ hospital but instead just bought their
medicine at the pharmacies available around Malaysia. Instead of that, KPJ also
can send their students in KPJ nursing education to another hospital and gain
profit from that. In the effort to overcome the shortage of nurses, KPJ should
grab this opportunity to be a supplier for these nurses in this industry.
The last strategy that
we propose to KPJ is to establishing their line of franchising. A franchising will increase a business
success because the KPJ branding is already all over the Malaysia. KPJ is
already an establish name of good service that may already enjoy widespread
brand name recognition. KPJ may offer franchising to open at Sabah and Sarawak
because there is none of KPJ service there. It can be a good strategy because
KPJ need to expand their services all over the Malaysia.
In order to achieve
their goals to increase their number of hospitals, we think that they should
use the technique and advantages of franchising properly. For the other goals
to expand their business internationally, we suggest for them to do a merging
with another international private healthcare.
Knowing how to analyze
a case study is a really great thing because this is one of our questions
during final exam later. Insya Allah with Madam explanations and all activities
that we have done during tutorial class, it will help me a lot.
Until then, wassalam.
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