Healthcare Industry Sri

Lanka

Healthcare Industry Sri

LankaIndustry AnalysisIndustry Analysis

Isuri KumariB.Sc. in MIS

Summary

• Fast growing industry• Healthcare can create an enormous part of a

country’s economy.• Consists of hospital activities, medical and

dental practice activities, and other human health activities.

• Companies that provide medical equipment, medical supplies and healthcare services such as hospitals and nursing homes.

Political and Legal Environment

Technological Factors

General Environment

Economic Forces

Socio – Culture Influence

Political Forces

• Rules and regulations -valid license for importing drugs.-entry and exit laws.- Foreign degree holders cannot work

without passing exam conducting by government.

-Tax policies Sri Lanka government is currently getting less percentage per annum on the cost.

Economic Factors

• Quality and demand depends on the personal income or wealth

• International financial crisis is very important when conducting business globally.

• Interest rates on loans affects the industry.

• Exchange rate is also important when importing and exporting.

• Domestic production level of medicine.• Government spend lot for maintain good

health of the country (malaria and HIV projects).

Socio-cultural Factors

• People’s spending for health and their loyalty.

• Attitudes of people.

• Country’s demographic factors

- female percentage is higher than others..

• Media glance for this industry is higher and media

can be used as a publicity tool, respecting the

culture.

• Ethics of country

Technological Factors

• Introducing new vaccines. • R & D to find new treatments - SAS, SWINE

FLU • Well tested medicines and medical

equipments to serve.• Adoptability of modern information and

communication technology.• Safety & standardized transportation techniques for medicine.• Government legislation on technology• Patent for medicines and equipments.

Porter’s Five Forces Model

Threat of New Entrants

• Initial capital requirements - to buy high technology equipments, salaries, to rent premises.

• Government rules and regulations

• Brand loyalty of customers to existing hospitals

• Needs highly qualified medical consultants & nurses. Qualified and trained professionals

desire to work with reputed institutes.

• Switching costs

• New entrants will lower the market share of the existing institutions.

Competition from Substitutes

• Quality services and well branded medicines.

• Brand loyalty. Brand Loyalty. All competitors try to give best service with low price than others.

• Kind and heartiest hospitality service for patients.

• Different brand names for the same generic (Paracetamol)

• Service expansion - e-channeling, partnership with mobile service providers and geographical growth

Bargaining Power of Suppliers

• Well reputed consultancies and medicine suppliers have bargain power. They can demand themselves - gsk, Hemas, SPC

• Monopolist miscellaneous suppliers - Lanka Oxygen Company & Ceylon Electricity

• Food and beverages are the essential for day today activities in Hospitals.

• Generally hospitals should be kept environmental friendly- Need to hire quality cleaning service

Bargaining Power of Buyers

• This industry deals with human lives. So always they are comparing the services and facilities with competitors.

• It is needed to look after them and give them satisfactory service to retain them.

• If some hospitals have quality services with low price, patients visit those hospitals.

Rivalry between Established Firms

• Price competition between main competitors creates intense rivalry due to changes of prices.

• Service introduction. Competitors always update with the latest technology and seeking for innovation.

• Advertising directly affects to the company picture.

Opportunities ThreatsOpening new branches in island wide and world wide

Labor turnover

Opening new laboratories using latest technologies

Patient turnover

Increase number of rooms in hospitals

Other hospitals moving to new technologies

Facilities for mobile and e-channeling

Inimitability of unique features

24/7 hours Availability Interest rates fluctuation

Opportunities and Threats