Strategic Management Report: Strategic Analysis of Lanka Hospitals

This report provides a comprehensive strategic analysis of Lanka Hospitals, a leading healthcare provider in Sri Lanka. It begins with an executive summary outlining the report's objectives, which include examining the company's background, industry attractiveness, macro-environment, strategic position, competitive advantages, and strategic direction. The report then delves into a detailed analysis of Lanka Hospitals' background, highlighting its evolution, services, and competitive advantages within the Sri Lankan healthcare sector. It assesses the macro-environment using PESTLE analysis, evaluating political, economic, social, technological, environmental, and legal factors. The industry attractiveness is evaluated using Porter's Five Forces, assessing the threats of new entrants, bargaining power of suppliers and buyers, threats of substitutes, and rivalry among competitors. The report proceeds to evaluate Lanka Hospital's strategic position using SWOT analysis to assess its strengths, weaknesses, opportunities, and threats. It further analyzes the company's competitive advantages and strategic capabilities. The report sets two SMART objectives for the hospital to be met within the next five years. Finally, it identifies the company's strategic direction using the Ansoff matrix, exploring market penetration, product development, market development, and diversification strategies. Overall, the report offers insights into Lanka Hospital's strategic management and provides recommendations for future growth and competitive positioning.

Running Head: STRATEGIC MANAGEMENT
STRATEGIC MANAGEMENT
Name of the Student
Name of the University
Author Note

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Executive Summary
The strategic management is the term that is used for denoting branch of the management,
which is related with development of the strategic vision, setting out of the objectives,
implementation and formulation of strategies and providing the remedial measures for
deviations for reaching strategic intent of organization. Hence, this report aims to discuss
about background statement of Lanka Hospitals and analysis of its industry attractiveness and
macro environment. Further, evaluation will be on strategic position of Lanka Hospitals with
the respect to environment and critical discussion will be on organization’s competitive
advantage among the competitors and the strategic capability analysis. Moreover, objectives
will be determined of the hospital. Lastly, strategic direction of hospital will be identified
using Ansof matrix.

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Table of Contents
Assignment 1..............................................................................................................................3
Task 1)........................................................................................................................................3
Company’s Background Statement........................................................................................3
Company’s Macro Environment and Industry Attractiveness...........................................4
Task 2)........................................................................................................................................6
Company’s Strategic Position................................................................................................6
Task 3)......................................................................................................................................10
Company’s Objectives.........................................................................................................10
Task 4)......................................................................................................................................10
Company’s Strategic Position..............................................................................................10
Reference..................................................................................................................................13
Bibliography.............................................................................................................................15

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Assignment 1
Task 1)
Company’s Background Statement
Lanka hospitals is the most accredited hospital in healthcare sector of Sri Lanka.
Since 2002, this hospital has revolutionized industry of healthcare by the development of
infrastructure and the advancement of its services and products with the view to deliver the
healthcare, which is on par with the globalized medical standards. Further, Lanka Hospitals
started its operations on June 7, 2002 in the Sri Lanka, under Apollo Hospitals’ brand name,
which is part of Apollo hospital’s chain that was founded in India by renowned Dr. Pratap C.
Reddy.
Lanka Hospitals is three hundred fifty bed “multi-specialty tertiary care hospital” that
is spread over 350,000 sq. ft with seven acres of the beautifully reformed garden. This state
offers the state of art characteristics, which is accompanied by the cutting-edge technology
and it is staffed by well-trained and experienced team. It provides complete ranges of the
latest diagnostic as well as high-end medical technology. The hospital is having eleven storey
structure, which is complete with the helipad and it is only the private medical facility in the
Sri Lanka that is equipped with the services of Air-ambulance. Apart from this, the medical
practitioners’ team of Lanka Hospital are perfect blend of the Sri Lankan as well as
internationally qualified trained doctor, who are at the forefront of medical spatiality of
hospital (Lankahospitals.com. 2020).

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Company’s Macro Environment and Industry Attractiveness
PESTLE Analysis
Political Factors: The political factors that affects operations of Lanka Hospital
includes level of political stability, politician integrity and their involvement in
corruption, enforcement of Sri Lankan laws particularly in regards to contract law,
taxation policy and trade barriers (Stoyanova and Harizanova 2017).
Economic Factors- Sri Lanka is Democratic Socialist Republic of Sri Lanka, which
is country in the South Asia. It is the fastest growing economies of world. The
economic factors that affects the operations of Lanka Hospitals includes economic
system of country, its GDP growth rate, interest rate in country, higher unemployment
level, efficiency of financial markets and others (Ortega et al. 2019).
Social Factors: The impact of social factors is direct reflection of society in which
Lanka Hospital operates and encompasses belief, culture, values and attitudes that
majority of population hold as community. The social factors affecting Lanka
Hospitals include demographics of population, class distribution among population
and educational background differences between marketers and target market
(Kampanje 2014).
Technological Factors: The technological factors affecting operations of Lanka
Hospitals include recent technological developments as well as breakthrough made by
the competitors and impact of technology on cost, which most entities in industry are
subject to have potential for increasing or reducing resulting income greatly.
Environmental Factors: The impact of environmental factors on Lanka Hospitals
include current conditions of weather that may significantly affects transportation of
resources, climate change in country, management of waste, contribution towards
already endangered species and reliance on renewable energy.

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Legal Factors: The legal factors affecting Lanka Hospital’s operation includes
government laws and framework that are required to be abide by hospitals such as
health and safety laws, discrimination laws, intellectual property laws and laws placed
for ensuring certain quality level (Pan, Chen and Zhan 2019).
Porter’s Five Analysis
Threats of New Entrants
In hospital, new entrants bring innovation and new ways of doings things. This bring
pressures for lowering strategy of pricing, reducing the costs and providing the new schemes
to customers. Lanka hospital is required to manage these set of challenges and needs to build
the effective barriers for safeguarding the competitive edge, which could be possible by
innovating the new services or products, building the economies of scale and spending on
R&D activities (Dobbs 2014).
Bargaining Power of Suppliers
In hospitality industry, hospital purchase raw material from number of suppliers. The
suppliers, who are in the dominant position can be able to decrease margin of Lanka hospital.
The powerful suppliers use their negotiation power for extracting the higher prices from
companies in hospital field, which ultimately impacts in lowering of overall hospital’s
profitability. Lanka hospital can tackle this with the help of building the efficient supply
chains with the various suppliers, developing dedicated suppliers as well as experimenting
with the product designs by using various materials (Maresova and Kuca 2014).
Bargaining Power of Buyers

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Buyers wants to buy best available offerings by paying less price. It put great pressure
on the profitability of Lanka hospitals in long run. This can be tackled by building larger
customer base and rapidly innovating new products.
Threats of Substitute Services or Products
Profitability of the industry gets impacted, when new services or products meets
needs of the similar customer in the different ways. This can be tackled by Lanka Hospital by
being service oriented compared to just product oriented, understanding of core needs of
customer compared to what customer is purchasing and increasing switching cost for
customer (Fitzpatrick et al. 2015).
Rivalry Among Existing Competitors
If there is intense rivalry among the existing players, then it results in reducing the
prices that results in decline of overall profitability of industry. Lanka hospital operates in
competitive hospital industry, which takes toll on overall hospital’s profitability. This can be
tackled by building the sustainable differentiation, building scale for better competing and
collaborating with the competitors for enhancing market share (Yunna and Yisheng 2014).
Task 2)
Company’s Strategic Position
SWOT Analysis
Strength
Excellence in Patient Care
Strategic Location
International Standard of healthcare
Highly Qualified and Experienced Doctors
Big Brand name
Using of the cutting-edge technology
Ability in attracting top healthcare personnel in healthcare.

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Weaknesses
Charging of hefty amount of the money, which is difficult for the common people
to bear.
Higher turnover of staff.
Lack of regional presence in the Sri Lanka.
Capacity constraint in rooms, theatre and OPD.
Opportunities
By twinning the world-class healthcare offer of Lanka Hospital with globally
acclaimed tourism potential of Sri Lanka, this hospital has envisioned the
opportunity for growing medical and wellness tourism product of Sri Lanka.
Rising per capita income
Lanka Hospital is first internationally certified hospital for the medical tourist by
Medical travel quality alliance.
Expansion of pharmacy operations of Lanka Hospital (Bull et al. 2016).

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Competitive Advantage
Competitive Advantage
A portfolio of the relevant international certifications bears the testimony of
commitment of the Lanka Hospital to global standards of the patient’s care. This helps in
providing competitive advantage as well as is key factor in the promotions of Lanka Hospital
as player of medical tourism in the overseas markets. The successful forays in to markets of
Fiji, Seychelles and Maldives are strengthened by the reputation for the high-quality
healthcare that are affirmed by certifications. The medicine field has witnessed rapid
advancement in the technology that necessities higher level of the investment in order to keep
pace with the emerging diagnostic and treatment that drives the competitive edge of Lanka
Hospital (Phadermrod, Crowder and Wills 2019).
Strategic Capabilities
Threat
Competition of Price
Emerging city as well as regional Hospitals.
Improvements in the healthcare facility provided by Government.
Attractive medical policies of insurance for utilizing foreign medical services.
Tax policies of government
Pressure for reducing cost of healthcare
Emerging online medical services.
Rising living cost that results in lower disposable income.
Industry wide shortage of the skilled professionals that meant challenges for
retaining staff.

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Lanka hospital has ability to deliver the world-class medical care by balancing
equation of the affordability and role played by it in uplifting the general living standards of
the citizens. It remains agile in maintaining their competitive edge and market position and it
continuously monitors demographic changes, the evolving needs of consumer and the other
risks and opportunities that could affect the ability for creating value. This hospital continues
to strengthen its brand in bid to enhance brand value as well as for gaining greater goodwill.
Its aim of ‘Renaissance’ is built upon its core competencies, while sharpening its competitive
edge by focusing on technology, ranges of care and quality (Gürel and Tat 2017).
Figure: Strategic Framework of Lanka Hospital

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Task 3)
Company’s Objectives
The two objective of Lanka Hospital that should be met within next five year are as
follows:
Lanka Hospital should demonstrate the skill of critical thinking in making decisions in
all the circumstances for providing quality care that ultimately results in enhancing
market share and profitability (Bjerke and Renger 2017).
The hospital should maintain compassionate and the exceptional quality, while
offering cost-effective solutions of the healthcare of international standards.
In addition, caring each and every patients of the hospital with utmost respect as well
as consideration (Toffler 2016).
Task 4)
Company’s Strategic Position
ANSOF Matrix
Marketing Penetration Strategy
Marketing penetration strategy includes encouraging the growth of sales within the
current customer’s base. This includes activities used for increasing share of market through
focusing on the existing product in existing market. It is primary intensive strategy of growth
implemented by Lanka Hospitals for accomplishing growth objectives. The market
penetration adoption as the primary intensive strategy of growth is associated with the
differentiation of Lanka hospitals through the ability of hospitality in order to differentiate its
offerings. The strategic objective linked with this strategy includes increasing sales by the
help of reducing its prices (Patrick Sim 2015).
Product Development Strategy

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Product development is the second intensive growth strategy. Lanka Hospital with the
help of its hospitality uses this as their secondary strategy for achieving the objectives of
growth. This strategy comprises of new products or services development or modifications in
current services or product lines for making it new to the current customer base. The growth
seeking hospital such as Lanka Hospital adopts this strategy, in case they find limited
opportunities of growth in current market with current line of products or services. The
objective behind adoption of this strategy is using intensive strategy of growth for increasing
investment in research and developments for innovations and the development of new
product. In current situation, Lanka Hospital is having more competitors that are offering
competitive products. Hence, product development is significant tool for attracting more
customers (Irtaimeh, Al-Azzam and Al-Qura'an 2016).
Market Development
Market development strategy is third strategy of growth of the Ansoff matrix. This
strategy mainly objects for exploring and entering new markets. This strategy is used by
Lanka Hospital as strategy of growth, which supports the product development and market
penetration. All around world Lanka hospital is strong brand name, which is the result of
successful entry of this hospital in the new consumer market. It is having the objective to
apply the market development strategy for expanding value chain, so that this could support
growth of the network of distribution (Thijsen, Tong and van Leer 2014).
Diversification Strategy
Distribution strategy is fourth strategy of growth of Ansoff matrix. It involving
entering new markets with the new products. Further, strategy of Lanka Hospital through the
portfolio diversification of hospitability is supported by the generic strategy of growth as the
ability of minimization of cost and the existing infrastructure, which is possible for company