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Medipartner
Strategic Management Term Project
20031018 Yeong-gyu Kim
20041006 Kyung-min Kim
20041021 Sooyoung Kim
20041030 Ji-ae Kim
Content1. Introduction to Medipartner
1-1. Company Profile1-2. CEO Profile1-3. Vision1-4. History & Current Status
2. Business Analysis2-1. Market features2-2. Business Area2-3. Key Success Factor2-4. Strategic Options2-5. SWOT Analysis
3. Competitive Structure3-1. Five Force Analysis3-2. Competitive Advantage
4. Value Chain Analysis4-1. Value Chain4-2. MSO
5. Future Direction & Recommendation 5-1. Business expansion
5-2. Future direction
5-3. Our recommendation
Introduction to Medipartner
1-1. Company profile
Korea’s first network supporting / consulting companyTraining, marketing, purchasing, info sharing, general
mgt, etc.‘Ye Dental Clinic’-based
Chief dentist of Ye established the firm, noticing the needs for professional management
Recognized as a successful model in the industry
2000 2001 2002 2003 2004
580
Sales Revenue(Million Won)
700
930
860
950
< 출처 : 2005.1.3. 주간조선 >
1-2. CEO ProfileIn-chool, Park ( 박인출 ) – a dentist with mgt instinct
Seoul National University, Dental collegeDentist(Ye dental clinic), President(Mediparter and Medisoft)
• Impressed by U.S practical medical practices (co-opened hospitals for synergies / services for patients’ satisfaction) Co-opened “Ye Dental Clinic” with 3 doctors in Gang-Nam
• Established & has managed “Ye network”, ”Mediparter”, ”Ye medical investment holdings” with his visions • Honored as an innovative, successful doctor who brought management concept to Korean medical industry.
• In his book on hospital management: “The standard for good hospitals is service level.” “The best doctors in this era is the ones who respect patients.”
1-3. Vision
VisionCreating and sharing new business model in the era of for-profit hospitals
Service for customer.
Mgt for customer
satisfaction.
Happy hospital.
Customer-oriented World-class
World-classmedical technology,
service,and management
- Human-oriented treatment- Contribution to development of clinical studies & education- Contribution to society- Future-oriented mgt.
1-4. History & Current StatusCurrent Status
• Managing 150 doctors (58 clinics in Korea, 9 clinics abroad)• China 8, Vietnam 1• Exclusive contract with BriteSmile
(US)• Major revenue source: franchising
fees
Goal (BHAG)
• Value creation through evolution• Success of doctors and hospitals • 10,000 doctors & 1,000 clinics in
network until 2010
1992 Accumulates Knowledge•Ye dental clinic in Gangnam(1992)•Ye academy(1993)
1999 The formation of Ye Network•Medipartner(1999)•Educated Japan HPI
2002~2005
Expands to outside•Dentismile(2003. 6)•Ye clinic institute(2004. 12)•First Ye dental clinic abroad: Beijing(2004.4)•Contracts the financial support MOU with WooriBank(2005. 11)
2006 The formation of MSO holding company•Ye dental clinic in Vietnam(2006. 5)•Ye dental clinic 53, Ye oriental clinic 4, Ye plastic surgery 1(2006. 4)
History
Business Analysis
2-1. Main Features of the Market
– Increasing # of Dentists (1990: 9,619 2003: 20,446)– Customers’ preference to well-known brands– Change of customer needs: health beauty Brand & network reputation management (better customer services and
control on clinics’ quality), Focus on beauty
– Increasing # of Dentists (1990: 9,619 2003: 20,446)– Customers’ preference to well-known brands– Change of customer needs: health beauty Brand & network reputation management (better customer services and
control on clinics’ quality), Focus on beauty
Changes of policies and regulationsChanges of policies and regulations
Intensive competition among (dental) clinicsIntensive competition among (dental) clinics
– toward doctors’ additional job, hospital as a for-profit org, and tax-favor (05.5)
– Market opening (FTAs, external capital to be allowed, etc)
Seeking more profitable value chain and revenue stream (ex. MSO)
Changes in ParadigmChanges in Paradigm– Increasing # of doctors / needs of medical service / opening
market– Increasing # of failed hospital in the competition needs on
special mgt
Providing professional management, Specialization
2-2. Business Area
Abroad Franchising: sharing Ye brand and providing individual consulting
services Clinics under direct ownership and management
Dental care products Ye dental care: offering various specialty dental care products Denti Smile: exclusive contract with BrightSmile – differentiated teeth-
whitening products
Education services staff seminar, workshop for practitioners, senior seminar, Ye coordinators,
Ye way education
• Domestic Networks– Ye Network Supporting System:
Sharing know-how and supporting mgt– Yes Medical: Sharing & managing
buildings for various clinics / Joint purchasing and advertising
2-3. Key Success Factors
– Thorough verification for joining:2~3-week communication and value verification with CEO
– Monitoring and management on service level: customer evaluation, mystery shopper technique, etc
– Manage the adhesiveness in the value of clinics
– Thorough verification for joining:2~3-week communication and value verification with CEO
– Monitoring and management on service level: customer evaluation, mystery shopper technique, etc
– Manage the adhesiveness in the value of clinics
Sharing knowledge through networkSharing knowledge through network
Rigid standards for the network strong reputation and brand powerRigid standards for the network strong reputation and brand power
First & specialized clinic modelFirst & specialized clinic model
– Strong professionalism: each doctor treats his specialized part– Specialization on clinic for beauty– Pioneering ‘Management’ concept in medical industry: providing
professional management for hospital operationex) marketing, CRM, purchasing, doctor’s life cycle
- information of treatment, service, management, education Synergy & network effects
DIFFERENTIATION COST INNOVATION GROWTH ALLIANCE
2-4. Strategic OptionsCustomer
- patient-oriented treatment
- doctor-oriented management
Differentiation
- High quality service
- Additional services
- Interior
Growth
- Dental care products
- Expansion to foreign market
Alliance
- Inter-network
- Financial support from Woori-bank
Offensive
- frontier spirit aggressive expansion
Provide
- Direct product manufacturing
- Proprietary mgt knowledge
TARGET
CUSTOMER COMPETITORSUPPLIER
THRUST
MODE
DIRECTION
OFFENSIVE
DEFENSIVE
USE PROVIDE
EXECUTION
2-5. SWOT Analysis
Strength- Famous CEO with managerial mind in medical industry broad human network- High ”Ye” brand recognition- The 1st dental network in Korea (first mover advantage)- High loyalty of customers (doctors) for the network- Stable & high profitability
Weakness- Limited fields of medical service (dentistry, oriental medical science)- High service price- Blurring focus in the process of biz expansion- Gaps benchmarking target- Harmful effect of unexpected medical accidents in the network - Communication issue in foreign market
Opportunity
- Fierce competition Increasing demand for professional mgt. for hospitals- Increasing opportunities in foreign market ex) Cooperation with SK in Beijing - Revision of medical law Freer market condition for biz- Increasing preference to better quality of life- Best practices existing abroad
Threat- Conservative/settled medical industry- Entry of entities with deep pocket ex) large corporations, advanced , foreign MSOs- Low price of Chinese oriental medicine clinic- Strategy imitation, knowledge dissemination- Aggressive entry expected because of its rosy prospect on growth potential and high profitability
Competitive Structure
Suppliers: LEquipment, materials, financing, marketing.. large, continuing transactions/ move to vertical integration of Ye
Buyers• Doctors of small clinics: L Fierce competition in their business/ less mgt skills/ expecting benefits from MSO (++) increasing # of options (- -)Potential entrants
• MSO by large companies: H• MSO from abroad: M MGT know-how/ high experience on this industry/ strong reputation/ large investment (---) Regulation issues/ less friendliness/ less focused (large companies) (++)
Substitutes• Medical centers: M• Networked hospital based on Human network (no or less fee): M Synergy expected (--) MGT, profit distribution?? (++)
Rivalry• MSOs: H• Hospital networks: H• High #/ potential entries expected/ similar concepts/ imitation/ high margin & prospect on healthcare industry (- - -)
3-1. Five Force Analyses(1) - Doctors
H: HighM: MediumL: Low
Buyers: M• Patients Increased info/ choice (strong purchasing power) (- - -) Desire to receive specialized, diff. service (++)
Substitutes: M• Regional clinics• Large general hospitals• Medical centers High quality vs. convenience (+/-) Specialization trend (-)
Potential entrants• Hospitals combined with esthetic/spa centers: H fits trend/niche/synergy (- - -)• Foreign medical centers with low price: L less trustable different segment• Excellent quality of service: H know-how/ reputation (+++) regulatory issue
Rivalry: H increasing # of choices fierce competition in price & quality imitation (- - -)
H: HighM: MediumL: Low
Suppliers: LEquipment, materials, financing, marketing.. large, continuing transactions/ move to vertical integration of Ye
3-1. Five Force Analyses(2) - Patient
Main CompetitorGowoonSesang 고운세상 networks• From a dermatological clinic (~‘98)
nation-wide beauty care networks
• Established a medical consulting firm (‘00)- Knowledge/know-how sharing: consulting, franchising,
research institute (beauty trend), education, procurement, marketing..
- Segmented, diversified biz areas: derm., plastic surg., hair, esthetics, cosmetics, ..
- IT solution: customer DB, diagnosis & treatment
• Globalization: China, Chicago (US)
• Active media play with its research institute, strong move to IT, creative new biz model (new clinic in a hotel)
3-2. Competitive Advantage
3-2. Competitive Advantage “Differentiation Focus Strategy”
Patient-oriented More communication with patients Less patients a day increasing the quality of each service Minimum waiting time Good ambience in the clinic & additional health and beauty related
services Focus on high-end customers
top quality service & equipment VIP customer service & marketing (Spa service/ Exquisite interior
design/ Valet parking/ Aroma, massage service) For better quality of medical services and it mgt
Professional management team: Medical MBA Expert Course at ‘Ye Academy’
Advanced know-how & information sharing network
: Cooperation among professionals from dentistry, plastic surgery, and oriental medical science
Value Chain Analysis
ProcurementLaw & taxes
Employees
IT systemAsset mgt
IndividualClinics
(Doctors/Staff)
NetworkSolution/
Consultingcompany
SolutionKnow-howSupportNetwork
Clinics (Doctors/
Staff)
Law & taxissues
EmployeesProcurement
IT system
Asset mgtMarketing
Fees, Knowledge sharable, Agent of network
Better service for patients
Failed in increased competition
Diluted focus (medical care + management)
Training
Marketing
4-1. Value ChainTraditionally, clinics were run by the owner doctor.
Things to consider increased failure increased
Currently, Medipartener works as a solution provider/ consulting firm who support doctors’ mgt.
4-2. MSO (Management Service Organization)Future business model of Medipartner
Role• Offers overall professional management except medical treatment (marketing, joint purchasing, CRM, vision sharing, training, etc.)
Advantage
• Scale of economy: enhanced purchasing power cost reduction, stronger mktg• Professional mgt with more responsibility improved efficiency better service for patients• Creates synergies within N/W through closer interactions (new, creative biz model, co-diagnosis & co-treatment, etc.)• Easier, broader financing more power for the medical industry to advance• Reduced operating costs (up to 12%)
Investment MSOBetter service for patients
Know-howSupportManagementNetwork
Clinics (Doctors/
Staff)
Doctorsas
stockholders
Profit sharing(fees, incentives, ..)
Profit sharing(Dividends)
MSO- Ye’s BenchmarkOCA (Orthodontic Centers of America) (’85 ~)
More than 365 clinics worldwide Comprehensive mgt service to orthodontists, pediatric dentists
and general dental practitioners (separation of doctor and manager)Financial services to both patients and practitionersJoint purchasing (up to 81% discount)Joint marketing (radio advertisement, events)HRM (training, recruiting, deployment, etc.)Practical IT solution (financial system, CRM, etc.)
For-profit hospital: active to make substantial money, IPO Expanded medical service’s reach to the masses by low cost
structure More direct management and ownership of the head office
Future Direction & Recommendation
Business Expansion Franchising
Source of Revenue: Registration/ monthly/ brand loyalty fee ‘Ye’ brand enhancementCash cow
Diversification (dental care, teeth whitening products) & affiliationSource of Revenue: Commission fee, profit sharing with affiliated
businessesValue creation by taking advantage of huge buying power
International investmentSource of Revenue: Profit sharingExpansion to the global market (China, Vietnam, Russia, etc.)
Seeking new business modelsMedical center: opened in April, 2007 Integrated for-beauty center with clinics, spa, esthetic care, café,
etc.
Future Direction Globalization
Launched YMG (Ye Medical Group) initiativeGlobal market share extension through FDI (Foreign Direct
Invest.) Evolution towards MSO
Franchising Direct management Holding company* Vision for a holding companyVertical integration: manufacturing, consulting, practicing,
financing, marketing, …Expansion for the purpose of successful doctorsA company that concerns about overall management of clinics
and even the doctors’ post-retirement life IPO
More capital to evolve and expand furtherFor a real ‘business firm’ that aims to make money
6. Recommendable Strategy Localization
Communication with local doctors Study Abroad Program for Korean doctors (i.e. have doctors study & work in China) Building close relationship ("Quan-si") with Chinese public officers to weaken
strict regulations
Lower cost lower price Share expensive medical equipment among clinics in the network to save the
operating cost Provide discounts/special offers to offset high price Joint insurance to prepare for unexpected accidents at lower cost
Minimize the number of accidents Maintain optimal service quality in every clinic Prepare contingency manual to counteract to unexpected accidents
Business expansion Expand the fields of medical service, maintaining quality & specialization Joint marketing: medical tour (i.e. travel packages for plastic surgery)
Strengthen organizational unity Develop strong incentive system to raise doctors/staffs' motivation Open national workshops/seminars to exchange ideas and build its own culture
Thank You
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