IHH Healthcare: Strategies for Analyzing and Entering Global Markets

This report examines the strategies employed by organizations to analyze and enter global markets, with a specific focus on IHH Healthcare Berhad's expansion into China. It begins with an executive summary highlighting the importance of agile policies in facilitating international business growth. The introduction establishes the objective of analyzing various tactics, models, and frameworks used in global expansion, supported by a literature review that explores key concepts such as global expansion, corporate strategies, and the role of joint ventures. The discussion and analysis section delves into IHH Healthcare's approach to entering the Chinese market, emphasizing the significance of joint ventures. The report concludes with recommendations based on the analysis and provides a list of references to support its findings. The report underscores the importance of strategic planning, market analysis, and understanding the nuances of foreign markets for successful international business ventures. The analysis of IHH Healthcare's case provides practical insights into the application of these strategies, making it a valuable resource for understanding global market entry.

Strategies for analyzing and
entering global markets

Executive summary
Due to agile policies and laws, it becomes easy for the organisations to expand their
business operations in different countries. The study will help in comprehending the strategies
used by organisations for analysing and entering into global market by considering example of
IHH Healthcare Berhad Company who will expand its operations in China.In the present
assignment, significance of the Joint venture in the international business expansion has been
systematically addressed.

Table of Contents
INTRODUCTION...........................................................................................................................1
LITERATURE REVIEW................................................................................................................1
DISCUSSION AND ANALYSIS...................................................................................................4
CONCLUSION................................................................................................................................6
RECOMMENDATION...................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
To maximise customer base and profits, the management of business organisations are
now expanding their business operations in different parts of the world. The core objective is to
raise organisational brand value and generate ample amount of profits (Sellar and Lingard,
2014). The aim is to analyse different tactics, models, and frameworks used by the organisation
in order to expand their operations in different countries. This will be accomplished by reviewing
the available literature on these topics. Development of practical application and knowledge will
be made through analysis and discussion. Eventually, the best recommendations will be provided
that can help the organisation to expand in China effectively and efficiently.
LITERATURE REVIEW
Global Expansion
Archer, (2014) enunciated that global expansion refers to the planned expansion of
organisational business operations into countries in several regions throughout the world. Global
expansion implies more than just making investment in nations outside of the parent nation; the
concept includes maintaining actual business presence in those countries. Ruggie, (2017)
elaborated that a corporate strategy for global expansion refers to the formal plan through which
the management of business organisation expands its operations in multiple countries. To be
"global" a company must extend its reach to all major continents across the globe, not just one or
two other countries (Pouzols and et.al., 2014). Organisations uses numerous strategies in their
global expansion plan including licensing, acquiring or merging businesses, forming strategic
partnerships and establishing new facilities in decided country (Zander, McDougall-Covin and
Rose, 2015). Through this the management is able to enhance its productivity and profitability.
Abbott, Green and Keohane, (2016) argued that for small or medium size businesses going
global is a significant undertaking that could disrupt the existing business activity. Thus, it is
essential for the Chief Executive Officer of the organisation to consider all the aspect and
analyse its position in order to know whether the company can expand its business in global
markets or not.
Cavusgil and Knight, (2015) elucidated that in order to sustain in the competitive market
and enhance the profitability of the organisation, it is important for the management to expand its
operations in overseas market by analysing all the potential risks and benefits effectively and
efficiently. Hospital operator IHH Healthcare Bhd is looking to expand its operations in China
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and is open to potential deals to help it grows its presence in the market. The management had
ample amount cash to fund deals in China and beyond helping it tap “enormous” fast growing
Chinese healthcare demand. Friedmann, (2018) elucidated that in order to expand the business
activities in global markets, the management of organisation must consider two things (Knight
and Liesch, 2016). The first is the impression the organisation has developed in its core market
and second is the experience one has developed while doing the business. Thus, it is crucial for
the business organisation to make effective reputation at home market before going global (Cho,
Roberts and Rodrigue, 2015). IHH Healthcare has developed good impression in the health care
sector of Malaysia and Singapore. IHH Healthcare is Asia's biggest private hospital
headquartered in Kuala Lumpur, Malaysia. They are known for providing excellent health care
services and facilities to the healthcare seekers. Now the organisation looking for expanding its
business operations in China.
According to Cho, Roberts and Rodrigue, (2015) timing plays crucial role and in order to
establish new business plant in other country, management and CEO needs to wait for the right
time. Even if the technologies are highly advanced, it will be adopted only if there is a need for
innovation in the market. For example, if the organisation wants to expand its business
operations in some developing country, the management needs to wait for the time till when
people have adequate knowledge about technologies and after that they can lay their business
activities in the country (Balakrishnan, 2016).
Theories and methods for global expansion used by organisation
Zander, McDougall-Covin and Rose, (2015) elucidated that numerous frameworks, methods,
theories and models has been proposed by the researchers and authors which helps the
organisation to expand their business operations in different countries. Global expansion can
adds value to the organisation by increasing their customer base, brand image and profitability
(Friedmann, 2018). In order to establish business in multiple countries, it is important for the
management to make use of appropriate tools and framework so that it can expand its business
operations effectively and efficiently. Pouzols and et.al., (2014) said that management needs ask
certain questions to themselves whether they are capable of operating in overseas environment or
not. In order to establish the business in overseas market, management of organisation needs to
goes through various phases. At initial phase they need to comprehend the foreign policies,
norms, companies act, laws and legislation (Solarin, Al-mulali and Sahu, 2017). To operate
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efficiently in foreign countries the management needs to analyse their customer’s needs,
preferences, taste, culture and behaviour. They must conduct their business operation in a way so
that customer’s sentiments and emotions cannot be harmed.
According to Knight and Liesch, (2016) exporting goods to foreign country from home
country organisation can be solid beginning point for global expansion. By using this method the
management of business organisation will able to make contacts in foreign organisation.
Through this they can able to understand the policies, cultures and behaviour of customers.
Balakrishnan, (2016) said that licensing agreements allow foreign companies to sell or represent
your brands in their home markets, achieving the same kind of product introduction that
exporting provides, but with a different set of risks. According to Solarin, Al-mulali and Sahu,
(2017) one of the best and efficient way to expand business activities in overseas market through
merger and acquisition. Most of the companies find merger and acquisition is the best way to
expand business operations in different countries. According to O'Neill and Chapman, (2015)
merger refers to the process through which management of one organisation combines with
management of other organisation and forms a third organisation. In this process two companies
agrees on certain terms and conditions and formulate a third company in order to expand its
business activities, operations and customers (Cavusgil and Knight, 2015). This can be efficient
way to expand in the global market. For example, Company A operates its business activities in
Malaysia and Company B operate in India. Company A wants to increase their business
activities in India. The management meet with CEO of Company B and put terms and conditions
for negotiations. They agreed on certain terms and conditions. The CEO of both the company
decided to expand their business operations through collaborations. Thus, Company A merged
with Company B and begin doing business activities in India (O'Neill and Chapman, 2015).
Hla and bin Md Isa, 2015 said that there five main types through which company merges.
Conglomerate merger refers to the merger where two companies operating different business
activities decided to merge in order to increase their wealth and stakeholder. Another form of
merger is congeneric merger which is also known as product extension merger. The form of
merger occurs when two companies are working in the same market or industry with overlapping
factors such as marketing, research and development, technology, etc. Krugman, (2017)
elucidated that market extension merger occurs when two companies selling same products but
compete in different markets. These companies merged together in order to enhance both
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productivity and profitability. Another form of merger is horizontal merger. When two
organisations operating in same sectors. Here, two competitors merged together in order to
enhance the productivity and profitability of the organisation. Sellar and Lingard, (2014) said
that vertical merger is the form of merger where organisations that manufacture parts and
services for same industry. It totally depends upon the management organisation which forms of
merger they prefer in order to expand their business in global market. In order to establish
business in multiple countries, it is important for the management to make use of appropriate
tools and framework so that it can expand its business operations effectively and efficiently
(Abbott, Green and Keohane, 2016).
Management needs ask certain questions to themselves whether they are capable of
operating in overseas environment or not. In order to establish the business in overseas market,
management of organisation needs to goes through various phases. At initial phase they need to
comprehend the foreign policies, norms, companies act, laws and legislation. Archer, (2014)
defines acquisition is the process where one organisation purchases stake of other organisation in
order to increase its capacities, assets and consumers. This is done with consent of both the
organisation. Companies perform acquisition for numerous reasons. The first reason is that they
want to raise the economies of scale, second could be increasing market share and so on.
Acquisition is also done by the business organisation in order to make global expansion in
different countries (Ruggie, 2017). For example, if one company operating in another country is
not able to sustain in the market but have enormous assets and market value. An outside
company makes deal with the host country company and acquire more than 50 per cent of stake
of that host country company. Through this outside company able to make entry into another
country.
Actual or potential risk in entering foreign market
According to Archer, (2014) corporate who desires to enter into foreign market have to prepare
for various risks that can affect their entry. These potential risks are categoerised into two
categories which are are internal risks and external risks. External risks includes regulatory
frameworks, natural hazards, accident, riots, politcial unrest etc. Internal risks includes
managerial policies, human errors, cost overruns due to delays, loss, squeesing cash flow, etc.
Ruggie, (2017) elucidated that market risks such as availability of inputs, cost fluctuations,
competitions and honouring of agreements are other risks which act as barrier to entry. Other
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potential and acutal risks includes operational risks such as maintenance, suitability, safety,
currency fluctuations, inflation, changes to taxation, etc.
DISCUSSION AND ANALYSIS
IHH Healthcare Company is Malaysian based health care organisation which has headquartered
in Kuala Lumpur. The management of IHH desire to expand its business capabilities in China
through joint venture with ParkwayHealth Shanghai International Hospital. The motive of
expansion is to gain market share in China and providing high quality medical facilities to
Chinese patients and health care seekers. IHH Healthcare has provided 210 million yuan for the
organisation in order to affirm the deal. The latest deal also dovetails into IHH Healthcare's plan
to expand in emerging economies where large population coupled with rapidly rising income are
driving demand for quality healthcare and advanced treatment. In order to establish market in
China, the management of IHH uses joint venture method for global expansion (IHH Healthcare
gets joint venture license in China's Chengdu, 2016). Joint venture is business entity established
through agreement of two or more parties. Organisation in ventures share their resources, assets
and liabilities in order to enhance the market share and capacity.
Through joint venture with ParkwayHealth, the management of IHH will able to increase
their market share and customer base in China. In order to sustain in the competitive
environment, it is very important and crucial for the management to make effective business
deals that helps in promulgating their market share. IHH further expands it business operations in
other parts of China such as Hong Kong and Chengdu with the motive to capture middle class
markets. This can be done by using methods like merger or acquisition. After India, Singapore,
Turkey, China is considered as the fourth market where IHH will establish their global
expansion. In order to enhance the productivity and profitability of the organisation, it is
essential for the management to make global expansion in different countries (Hospital operator
IHH eyes China expansion, seeks M&A targets, 2016). Numerous frameworks, methods,
theories and models have been proposed by the researchers and authors which help the
organisation to expand their business operations in different countries. Global expansion can
adds value to the organisation by increasing their customer base, brand image and profitability.
In order to establish business in multiple countries, it is important for the management to make
use of appropriate tools and framework so that it can expand its business operations effectively
and efficiently. The management of IHH enunciated that the organisation purpose is to become
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market leader in China's foreign funded private hospital sector. The company has broken ground
on 1.36 billion yuan hospital in Hongquiao area, Shanghai (Ren and Yan, 2017). China political
conditions are stable though there different types of risks such as economcial and environmental
risks which IHH can face while operating in China (Sellar and Lingard, 2014).
From the above discussion it has been analysed that IHH Healthcare desires to gain the
maximum profitability and market share in the china market. For attain this objective, cited
venture is going to conduct joint venture with ParkwayHealth Shanghai International Hospital.
The major aim of this joint venture is that by help of this joint venture company can effectively
enter in the china market and carry out its all business activities and function in more effective
and efficient manner. The major advantage of the joint venture is that company can enhance its
brand image in the market and enhance also its product customisation. In addition to this, with
help of joint venture company can easily redesign its position in the new market in an effective
and efficient manner. IHH Healthcare company have aim in the new market is to attract the new
customers and gain customer attraction in large manner so by help of this joint venture company
can easily enhance its business. With help of international business, IHH Healthcare has various
opportunity to earn the profitability and revenue in the market. By help of international expand,
company can also develop its strong brand image in the market and enhance profitability. By the
aid of joint venture, company can easily share its business value, profit, loss, resources,
equipment and material with other company in the international market. While company
performs its business at international level then it is very easy to earn the profitability and market
share in the competitive business environment. Worldwide development can enhances the
association by expanding their client base, mark picture and benefit. Keeping in mind the end
goal to set up business in different nations, it is critical for the administration to make utilization
of proper instruments and system with the goal that it can grow its business tasks successfully
and proficiently. The administration of IHH articulated that the association design is to wind up
showcase pioneer in China's outside supported private healing facility part. The organization has
gotten things started on 1.36 billion yuan doctor's facility in Hongquiao zone, ShanghaiWith help
of worldwide business, IHH Healthcare has different chance to procure the benefit and income in
the market. By help of worldwide extend, organization can likewise build up its solid image
picture in the market and improve productivity. By the guide of joint wander, organization can
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without much of a stretch offer its business esteem, benefit, misfortune, assets, gear and material
with other organization in the global market.
CONCLUSION
From this entire report, it has been summarised that in order to earn maximum
profitability, revenue and market share, global expansion of business is one of the effective
methods in the present time. As there is huge competition in the business environment and
company requires adopting such business strategies through which it can sustain in the market
for long time. While company expand its business internationally, then there are various
opportunities and chances to gain the profitability in the new market. In this current report, IHH
Health Care Company has used the strategy of Joint venture in order to enter in China market. It
has joint venture with ParkwayHealth Shanghai International Hospital which is one of the
popular health care organisation in china market. Organisation uses numerous strategies in their
global expansion plan including licensing, acquiring or merging businesses, forming strategic
partnerships and establishing new facilities in decided country. Organisations uses numerous
strategies in their global expansion plan including licensing, acquiring or merging businesses,
forming strategic partnerships and establishing new facilities in decided country It is very
important for the company to select one appropriate strategy for market expansion because
wrong selection of strategy can negatively influence the performance of business. In the present
study, IHH Health Care Company has used joint venture strategy for market expansion by which
the management of IHH will be able to increase their market share and customer base in China.
Global expansion adds value to the organisation by increasing their customer base, brand image
and profitability. With the help of this joint venture strategy, cited venture can easily sustain in
the competitive business environment. It has been also summarised that cited venture will be
able to develop its strong market position and goodwill in the competitive business environment
by implementing strategy of Joint venture with ParkwayHealth Shanghai International Hospital.
In this strategy, both companies will share their profit, loss, material, equipment, resources etc.
RECOMMENDATION
From this above discussion, it has been analysed that international business expansion
helps the company in increasing the profitability and market share. By implementing the joint
venture strategy, company can easily enter in the new market. IHH Health Care Company should
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use following criteria to perform more effectively in the new market. Several recommendations
are as follows-
 IHH Health Care Company should design a systematic planning for implementing its
strategy in the new market. Furthermore, it should provide complete information about
business expansion to all stakeholders. It should share each and every new method,
practices, policies and strategy to its all stakeholders in the new market so that they can
perform in better manner.
 IHH Health Care Company should provide the training and development to its workforce
in the new market so that they can learn the new method, criteria of working and
understanding the new environment in the market. By help of training and development
program, company can easily set up its business in the new market and perform its
business activities and functions in more excellent manner. Training and development
assist the company in enhancing the skill, ability, knowledge and working criteria of
employees by which they can perform in better manner in the international market.
 IHH Health Care Company should use the advanced and high quality of technology
according to the requirement and business environment. It should purchase that
equipment and material which is used in the new market. By help of advanced and high
quality of tools and equipment, company can easily enhance its performance and quality
of product and services. By use of the advanced technology, it can enhance the speed of
business operation and function in the new market.
 Company should focus on the effective culture and structure of the business so that it can
effectively perform all task and activities in an effective and efficient manner. By
managing the effective culture and structure, all workforce can achieve determined
objective on the specified time.
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REFERENCES
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