Saturday, 20 December 2014

What have I learned this week : KPJ HEALTHCARE GROUP


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.

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. 

currently I'm keeping an eye on one person, but I'm not a nutty as a fruitcake. saranghae.

No comments: