Examining the Business Operations of Sonic Healthcare in the Australian Healthcare Sector

This report examines the business operations of Sonic Healthcare in the Australian healthcare sector, including its growth over the last ten years, competitive landscape, industry trends, and ethical issues.

Health Systems Management

Table of Contents
Introduction...........................................................................................................................................2
Main Context.........................................................................................................................................2
Business activities.............................................................................................................................2
Overview of the competitive landscape.............................................................................................3
Industry trends...................................................................................................................................4
Ethical issues.....................................................................................................................................6
Conclusion.............................................................................................................................................7
References.............................................................................................................................................8
1

Introduction
The health system of Australia is considered to be one of the best on the globe. It provides
safe, affordable and quality health care facilities to the people of the country. The healthcare
industry is also growing rapidly which is being supported by the government of Australia.
The main aim of the report is to examine an industry segment of the Australian healthcare
sector and evaluating its model of operations growth over the last ten years. The
environmental factors influence the business operations of organizations within the sector.
The organization also faces difficulties to compete in the competitive environment. Sonic
Healthcare has been taken for determining and analyzing business operations. It is the third
largest laboratory/pathology organization carrying out its operations in eight nations.
Main Context
Business activities
The cause of the disease is being identified by diagnostic pathology through morphologic and
clinical pathology findings. It is necessary for both the areas of pathology, in spontaneous and
experimentally-included illness. As per the experimental studies, the effect of spontaneous
illness and external agent test must be separated. Diagnostic pathology helps in investigating
the disease which is unexpected or any dead animal laboratory colonies. Toxicologic
pathology is a centre to help in diagnosing and preventing of the disease related to
spontaneous, a chemical in the veterinary diagnostic laboratory (Sonic healthcare, 2018). The
diseases which occur due to natural chemical should not be neglected, as these cases may
help in getting crucial information and understanding the mechanisms of toxicity of these
chemical or similar groups. Diagnostic pathology is being continued using complementary
data and morphology. The diagnostic process will include new data by decreasing the
turnover time and the cost of current technologies.
Sonic Healthcare is a world-renowned organization which provides health care service In
Australia, the USA, Germany, Switzerland, the United Kingdom, Belgium, Ireland and New
Zealand. Sonic Healthcare is one of top 50 companies of the world in providing healthcare,
specializing in radiology, pathology and medical centres. The main division of Sonic
Healthcare is Sonic Clinic Service (SCS). It covers a wide range of health services such as
primary care research programs, community and home nursing service, health assessment
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technologies, clinical trials and chronic, hospital avoidance program and disease management
program (Sonic Healthcare, 2018). Trusted brands are included under the SCS network, like
Sonic Health Plus, IPM Medical Centres, and Australian Skin Care Clinic. The SCS network
also includes national health care service and solutions in urban and rural areas of the
country. Sonic is also working to improve the health care service and human lives in those
areas of the world which are still not getting proper care services such as Congo and Sudan.
Overview of the competitive landscape
Sonic is a leading provider of provider of pathology services in Australia. However, there are
few competitors of Sonic like Quest Diagnostics, Neo Genomics, LabCorp etc.
Quest Diagnostics is based in America and it was being found in 1967 as Metropolitan
Pathology Laboratory Inc. Later it becomes an independent organization with the name of
Quest. It operates in the United States, the United Kingdom, Brazil and Mexico. Quest is also
an agreement with multiple hospitals and clinics around the world (Quest Diagnostics, 2018).
Quest provides the diagnostic testing and the information which help patients and doctors to
take better decisions regarding health care. They do regular blood tests, like Pap testing,
cholesterol and white blood cell count. Medical test for diagnosis of diseases and curing of it
is also being provided by Quest.
A broad portfolio of products and services is being offered by the Quest Diagnostics to the
vivid customer base. These customers can be categorized into Individual, healthcare
organizations and commercial entities. And the values that Quest Diagnostics provides their
customers according to the size and the industry standing, broad range of services and
products, its commitment of involvement, partnership and industry expertise and experience
(Ball, 2013). They have a wide network of partner organizations and companies that can be
categorized supplier and vendor partners, medical and healthcare partners and strategic and
alliance partners.
LabCorp is a globally renowned life science company, based in Burlington, North Carolina.
They offer clinical laboratory and drug development services. The main objective of LabCorp
is to deliver world-class diagnostic solutions to improve health and lives and introducing
innovative medicines and technologies to bring improvement in delivering care (LabCorp,
2018). They cover a wide range of customers such as biopharmaceutical companies,
physicians and other healthcare providers, care organizations, governmental agencies,
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employers, hospital and health system, contract research organization, patients and
consumers, food and nutritional companies and independent clinical laboratories.
LabCorp serves more than 220,000 all over the world and this can be categorized into three
parts, such as individuals, healthcare organizations and commercial and government ethics.
The value is being provided to the customers according to its industry standing and
reputation, its international services reach, extensive testing capabilities, proprietary
technologies and its specialist expertise and experience. The key partners of LabCorp can be
categorized into supplier and vendor partners, ensure partners, courier and distribution
partners, strategic and alliance partners (Griffin et al., 2014).
Industry trends
Sonic healthcare is considered to be one of the largest business organizations in Australia.
The market in Australia is mature which affects the business operations of Sonic Healthcare.
The overall market of the organization grew around seven per cent but the market share
declined which is due to the decrease in the collection centres and unprofitable centres
(Landis, 2018). However, the margins have improved slightly because of the stabilization of
rents of collection centre. The revenue growth of the organization has shown positive results
but the earnings growth depicted negative results which mean the expenditures of the
organization have been increased in recent years in comparison to the previous ten years
(Witcomb, 2018). The environmental factors that influenced the business operations of Sonic
Healthcare are as follows:
Political factors
The political factors impose a significant impact on the long-term profitability of Sonic
Healthcare in some market or country. The organization carries out its operations in health
care services and equipment in more than twelve nations and exposed to various types of
political environment risks. The unstable political environment creates huge problems for the
organization which led to the decrease in the earnings and increase in the costs. For example,
the organization lost around $200 million contracts a year in Canada because the new
government did not accept the laboratory services contract as Sonic was considered to be the
preferred proponent (Binsted, 2015).
Economic factors
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The environmental factors also influenced the business operations of Sonic Healthcare such
as inflation rate, interest rate, economic cycle, foreign exchange rate and savings rate. The
growth rate of the economy and consumer spending also affects business operations. The
organization faces problems in both developed and developing nations due to economic
fluctuations. The business operations in the USA are affected by the Medicare fee cuts and
the weak economic conditions also contributed to the low industry growth. The increase in
the cost of raw materials leads to an increase in the overall cost of production (Sonic
Healthcare Limited, 2013).
Social factors
The culture of the society also imposes an impact on the culture and business operations of
Sonic Healthcare. Understanding the attitude and shared belief of the people for the marketers
is considered to be important for selling the products and services. Apart from this, the
employees in different countries are from different backgrounds and it becomes difficult for
the management team to direct them in an appropriate manner. Thus, the organization has to
invest funds for conducting training programs for the employees. The company has to also
invest in marketing activities by hiring marketing professionals. Thus, the company has to
bear the cost of managing workplace diversity and customers in different countries
(Chambers, 2011).
Technological factors
Technology is disrupting many industries all across the world. The industry over the last 10
years has been transforming very fast providing wide opportunities for the established
organizations to cope up with the changes. Technologies have supported the speed of the
business operations of the organizations in different industries. Thus, to compete with the
major players in the market, Sonic Healthcare have to invest a huge amount of money in the
technological processes and equipment. The company has to purchase devices and machines
in the countries in which the business operations are carried out (Griffin et al., 2014).
Environmental factors
The environment rules and regulations are different in the countries in which the Sonic
Healthcare operates. Thus, the environmental standard imposes a significant impact on the
profitability of the organization. Sonic Healthcare has to meet all the relevant legislative and
regulatory environmental laws in order to avoid any kind of issue in the business environment
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(Environmental Policy, 2018). The organization has invested in energy an efficiency
initiative which consists of the use of the renewable energy systems, providing training and
education to the employees on the environmental practices, recycling programs, minimising
wastages through digitalized solutions and partnering with suppliers for decreasing transport
emissions and packaging.
Legal factors
The legal institutions and framework are not strong enough in many countries for protecting
the intellectual property of the company. The legal rules and regulations are needed to be
followed by Sonic healthcare because it affects the business operations. Some of the legal
factors which affect the business operations of the organization are discrimination law,
antitrust law, intellectual property law, consumer protection, health and safety law and
employment law (Meiners, Ringleb and Edwards, 2018). If the organization breaks any break
then huge penalties are being imposed by the law of that country. Thus, Sonic Healthcare has
also invested funds for ensuring each and every rule is being followed in an appropriate
manner.
Ethical issues
Sonic HealthCare and all of its subsidiaries are committed to ethical execution. The staffs the
industry uses the set of fundamental principles as a guide which is being provided by the
Sonic Healthcare Code of Ethics. The Board of Directors and the executive members of the
Sonic are bound to operate a business with honesty and ethically. And zero tolerance against
corruption and bribery (Anti-Bribery & Corruption Policy, 2018). The Sonic has been facing
bribery and corruption issues and in order to prevent it there are some laws and regulations
have been created. Sonic and all of its subsidiaries operate a business with an honest and
ethical manner. All the members and employees of sonic are bound to laws and according to
its bribery receiving or giving money is illegal. Bribery allows corruption and both are
criminal offences; the punishment can be critical for the company as well as for the
employee. Bribery and corruption may lead to an employee to the imprisonment or a fine. At
the same time if any involvement of sonic is being found in any corruption then they have to
pay fine and will also face damage of their reputation that they have built in several years
(Corporate Responsibility, 2016). All the suppliers, service providers, agents and third party
contractors follow ethical ways to do business with the Sonic as its consistent focus on
maintaining global reputation quality and service excellence. The workers of the health care
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are responsible to maintain the patient’s health and also to help in getting improvement into
it. Advance technologies and knowledge may set new ethical issues for Sonic as it is not
possible to set a guideline which needs to be followed for forever.
Conclusion
Sonic Healthcare has been carrying out its business operations as per the needs of the market.
The organization has expanded its operations in different markets but it is facing problems
due to the rapid changes in the environmental factors. It has become important for the
organization to compete with its competitors and carrying out its business operations ethically
(Shaikh, 2015). The organization has to also decrease its operational costs by managing the
market environmental factors.
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References
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Meiners, R., Ringleb, A. and Edwards, F. (2018). Legal environment of business. 11th ed.
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