Strategic Analysis of Mediclinic International: A Project Report

This undergraduate major project provides a comprehensive strategic analysis of Mediclinic International, an international healthcare provider. The project begins with an introduction to the company and its financial performance, followed by an analysis of its internal and external environments. It uses frameworks such as Balanced Scorecards, SWOT, PEST, Porter's Five Forces, VRIN, and McKinsey 7S to evaluate the company's strategic position and capabilities. The project also addresses the challenges faced by Mediclinic, particularly in its Middle East unit, and explores potential growth strategies using Ansoff's Matrix, Porter's generic strategies, and organic growth models. The project concludes with an evaluation of the growth options and recommendations for future strategic directions, supported by relevant academic references.

Running head: UNDERGRADUATE MAJOR PROJECT
Undergraduate major project
Name of the student
Name of the university
Author Note:

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Table of Contents
Introduction................................................................................................................................4
Question 1..................................................................................................................................4
Balanced Scorecards (Financial Ratios, Comparator Financial Ratios)....................................4
SWOT Analysis.........................................................................................................................5
PEST Analysis...........................................................................................................................6
Five Forces porters.....................................................................................................................6
Strategic Position & capabilities/resources................................................................................7
Culture and its organizational past.............................................................................................7
Strategic Drift.............................................................................................................................8
VRIN Model...............................................................................................................................8
McKinsey 7S – hard and soft.....................................................................................................8
Question 2..................................................................................................................................9
Challenges of the Organization..................................................................................................9
5W’s & How..............................................................................................................................9
Ansoff’s Matrix........................................................................................................................10
Porter’s generic Strategies........................................................................................................10
Organic Growth........................................................................................................................11
Diversification..........................................................................................................................11
Mergers and Acquisitions........................................................................................................11

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Evaluation of options...............................................................................................................12
References................................................................................................................................13

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Student ID:
Introduction
Mediclinic International is an International healthcare provider with a number of hospitals
located in different places like South Africa, UAE and Switzerland (medclinic.com 2018).
Headquartered in South Africa, the company is listed in the South African Security Exchange
as well as the London Stock Exchange. The hospital that was founded in 1983 has now an
annual revenue of more than pound 2500 million and a net income of pound 250 million.
This makes it one of the most profitable hospitals of the world. The following report aims to
analyze the internal and external environment as well as the strategic choices of the hospital.
Question 1
Balanced Scorecards (Financial Ratios, Comparator Financial Ratios)
Financial Process Customers Growth
Return on equity
(6.03)-2017
Competitors Average-
1.78
Effective supply
chain
High end customers Higher amount of
sales
Current Ratio (1.81)- Lean process of Expected to grow 5
percent per year in
Expected to grow 8

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2017
Competitors Average-
1.76
customer service terms of customers percent per year
Debt equity Ratio
(0.43)-2017
Competitors Average-
0.47
SWOT Analysis
Strengths The management of the mentioned hospital generally employs highly
skilled employees who have a proper amount of experience under their
fold.
Weaknesses The failure of the company to come out of the traditional system of
providing services has led to the turned the company incapable to provide
quality services to the people.
Opportunities The failure of the hospital if well dealt by the management can be turned
into profitable opportunities.
The management of the hospital must use the help of the latest
technologies to provide a much high standard of healthcare to the patients.
Threats The absence of modern technologies and its use by other competitors along
with the emergence of large number of small clinics has been a throne to

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the success of the hospital in modern times.
PEST Analysis
Political Political stability of the operating countries especially in South Africa
The amount of corruption. The political factor is crucial at the beginning
stage
Economical Economic situation of the countries
GDP of the country. The economic factor is important at beginning and
growth stage of the organization.
Social Skill levels of the residents of the country
Culture of the country. Social factors form an important part in the growth
and maturity stage. The company is socially responsible to provide the
patients with best services
Technological Technological developments in the country
Cost Structure in healthcare industry. The saturated market stage involves
the use of technology.
Five Forces porters
Threat of new
entrants
Low
Bargaining
power of the
buyers
High

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Threat of
substitute
High
Bargaining
power of
suppliers
High
Competition
among the
rivalry
High
Existence of other health centres
Quality of the practitioners
Better patient service
Good check up system
Strategic Position & capabilities/resources
The main strategies of the hospital are;
a. Providing a wide range of hospital related treatments
b. Improve the quality of healthcare
c. Provide safe and scientific healthcare facility
d. Improve the patient experience
Culture and its organizational past
In Mediclinic International the management ensures a proper and sustainable culture.
The management aims to deliver the best quality healthcare to the patients and work on
improving relationships among the hospital and the service users (Lovelock and Patterson
2015). The organization was established in 1983 and slowly grew into a large scale health
service provider with operations in three different countries.

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Strategic Drift
The strategic drift of the organization has been notable as they have shifted their focus
to more customer oriented rather being profit oriented.
VRIN Model
a. Value- The resources of the hospital includes the special and innovative services that
are hard to match by any other hospitals.
b. Rareness- If the services of the organizations are available to all the organizations
then the hospital will fail to achieve any competitive success in the business (Lee and
Kotler 2015).
c. Imitability- The premium services cannot be easily obtained by other hospitals
d. Non Substitute- The premium services of the hospital cannot be matched by any other
services.
McKinsey 7S – hard and soft
The implementation of the Mckinsey 7’s framework will help the organization to;
a. Improve the performance of the company
b. Determination of using the best strategy for implementation
c. Align the departments and the different processes during a merger or acquisition
d. The examination of the likely effects of future changes within the company.

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Question 2
Challenges of the Organization
The management of the company has announced its success in its South Africa unit,
whereas it still suffers from the challenging Middle East unit. The company has entered into
an agreement with Al Noor Company to establish the biggest private health care facility in
UAE. But unfortunately the move failed as because the number of patients availing the
services as well as the operating performance of the Company has been way below
expectations.
The absence of a proper and effective planning has led the company to such a crisis in
the Middle East. Given the sheer size of the hospital and the service providing facilities the
company must charter out a policy to attain profits in the country (McCreaddie et al. 2017).
5W’s & How
The 5W’s of communication are namely;
a. Who- The management is fully responsible for such a debacle. The Company should
have conducted a proper marketing research before entering the West Asian Market.
The government rules and regulations for private companies had also been overlooked
by the management which led the company to a crisis situation in Abu Dhabi.
b. What- As mentioned earlier the company suffers from low turnout as well as a poor
operating performance.
c. When – The debacle started in the year 2015 when the mentioned health provider
entered into an agreement with a local company titled Al Noor.
d. Where- The debacle occurred in Abu Dhabi, a west Asian city in the country UAE.

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e. Why- The main reasons for such a problem are the schemes of the UAE government
to provide different types of facilities like free treatment and 20% discounts on first
health related treatments.
f. How- The challenging environment in Abu Dhabi is because of the weaker second
half performance of the company which saw a steep decline in the number of patients
visiting the organization and also the lack of proper performance by the management
of the Organization.
Ansoff’s Matrix
Market Penetration Market Development
 The health service provider has target
to achieve more with their existing
services by increasing its market
share
 The mentioned organization has plans
to expand its business in different
sectors of health with the already
existing services
Product Development Diversification
 The hospital can develop the existing
products or innovate new products
and services to have a competitive
advantage over their rivals
 The most important element is to
diversify the products and services of
the Company from the others in the
market
Porter’s generic Strategies
a. Cost Leadership Strategy- Cost leadership strategies of the mentioned hospital will
involve increasing the profits by reducing the cost of products and services and also

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increasing the market share by different strategies (Peters Blohm and Leimeister
2015).
b. Differentiation Strategy- The success of the differentiation strategy will involve a
proper research, development and innovation. It also depends on the capability of the
organization to provide the best quality products and services.
c. Focus Strategy- It is essential for the organization to stay focused and concentrate on
the strategies adapted by them to gain success in the modern world.
Organic Growth
Organic growth can be achieved by following some simple steps like;
a. Patience and Diligence- The management must have the necessary patience and
diligence to achieve organic growth (Ranchod Childs Abraham and Taylor 2016). The
executive leaders must need to focus on the goals of the business rather than assuming
it to be automatically happening during budget and strategic planning.
b. Selection of the proper team- The Company must recruit talented as well as reliable
and consistent team members to help in the steady growth of the organization.
Diversification
The company must diversify itself through its products and services as such a
diversification will help them achieve the growth targets. It also helps to provide the service
seekers with better quality services and help them have a stronghold in the market.

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Mergers and Acquisitions
The management of the company must consider of possible mergers and acquisitions
of both large and small scale business that provides similar services to have a competitive
advantage in the markets and achieve better profit shares (Sovbetov 2016).
Evaluation of options
The above frameworks have a number of ways that can be adapted to select the
growth strategy for the mentioned private hospital (Winston and Weinstein 2016).
Diversification and innovation of new products and services can lead them to success.
Selection of the Best Way Forward
The best way forward is to diversify the varied range of products as well as services
of the hospital and also by merging or acquiring companies to stay sustainable in nature.

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References
Ginter, P.M., Duncan, J. and Swayne, L.E., 2018. The Strategic Management of Healthcare
Organizations. John Wiley & Sons.
Gupta, A., Calfas, K.J., Marshall, S.J., Robinson, T.N., Rock, C.L., Huang, J.S., Epstein-
Corbin, M., Servetas, C., Donohue, M.C., Norman, G.J. and Raab, F., 2015. Clinical trial
management of participant recruitment, enrollment, engagement, and retention in the
SMART study using a Marketing and Information Technology (MARKIT)
model. Contemporary clinical trials, 42, pp.185-195.
Hardyman, W., Daunt, K.L. and Kitchener, M., 2015. Value co-creation through patient
engagement in health care: a micro-level approach and research agenda. Public Management
Review, 17(1), pp.90-107.
Kotler, P., 2015. Framework for marketing management. Pearson Education India.
Lee, N.R. and Kotler, P., 2015. Social marketing: Changing behaviors for good. Sage
Publications.
Lovelock, C. and Patterson, P., 2015. Services marketing. Pearson Australia.
McCreaddie, M., Kuzemski, D., Griffiths, J., Sojka, E.M., Fielding, M., Al Yateem, N. and
Williams, J.J., 2017. Developing nursing research in the United Arab Emirates: a narrative
review. International nursing review.
Mediclinic.com. (2018). About Us. [online] Available at: http://www.mediclinic.com/About-
Us [Accessed 26 Mar. 2018].