GE HEALTHCARE

Strategies For BOP Markets

Submitted by Group 11, Section A

Mahesh | Punit | Sairam | Raju

Snapshot of the presentation

Key Issues
Approach Strategy Implementation

Key Issues

4As of serving BOP Markets

Awareness Access Affordability Availability

Variation in languages across regions Low literacy levels Lack of ready access to financial institutions Less capability to handle economic shocks Low per capita income Minimal savings Restricted Mobility Limited travel patterns

Key Issues

Service Models

Trade-offs between keeping costs low and providing access to the customers Maintaining the quality of service even in remote areas Trade-offs between direct distribution and third-party distribution Infrastructure constraints leading to higher costs Language barriers and illiteracy resulting in reduced promotion options
Providing financial services in an accessible, convenient and affordable manner

Distribution Channel Selection

Credit and Financing

The Emerging Markets Approach

Minimizing Distribution/Service Costs

Use dealers to distribute/service to the customer set A {independent Clinics, Mop-Pop Clinics, MDs Office} Use own sales force for set B {Govt. Inst, Corp and Private Hospitals, Nursing Homes}

Managing Turnaround time

Establish Service Centers based on no. of customers and usage in a region which will also create a sustainable competitive advantage

Tackling Competition

Tie up with state govt. to supply to PHCs at concessional prices and provide services through service centers Form as many exclusive supply contracts with dealers as possible

Total Cost of Ownership

Bringing down the total cost of ownership

Collaborate with an IT vendor to deliver IT solutions at affordable prices Keep product costs as low as possible using alternative designs and materials Enter into PPP agreements to share the total cost of delivering the service Financing considerations

Collaborate with MFIs and banks located in the BOP markets to finance the purchase of these equipment

Enter into PPP agreements to share the total cost of delivering the service

Distribution Strategies

GE (HC) provides solutions in three areas

Broad-based Technologies Information Technology Life sciences

Distribution strategies cannot be uniform across the offerings Need to design distribution models for each offering
For high-end medical equipment (probable clients in set B) For portable or miniaturized medical devices (probable users in set A)

Distribution Strategies (Set B)

For High-end medical equipment

Low demand for these products in rural markets Markets to be created primarily in Tier 2 cities Financing is a major concern for GPs and hospitals

Solutions

Collaborate with leading hospitals and GPs in Tier 2 cities Provide low cost financing by collaborating with leading nationalized banks like SBI which have extensive network Volumes can be driven by keeping prices low and The Base of the Pyramid distribution challenges IFMR Research maintaining high service levels

Distribution Strategies (Set A)

For portable medical devices

Can be marketed in villages and Tier 2 cities Financing requirements are likely to be lower Create partnerships with local NGOs/dealers to market the products NGOs/dealers collaborate with VLEs to provide last mile coverage

Solutions

Service channel

Partnership with government organizations like PHCs to improve the accessibility of the services

Ex : B Braun to set up 11 centres equipped with 111 haemodialysis machines within medical colleges and hospitals in AP to provide treatment to patients suffering from chronic kidney diseases (CKDs)

Helping in financing local entrepreneurs to set up labs so as to leverage demand across hospitals tier 2/ 3 cities Sales force can be in collaboration with NGO in that area

Medical Technology Industry in India Riding the Growth Curve by Deloitte

Hub and spoke model

Reference labs:

Regional hubs in large metropolitan areas Offer comprehensive and specialized testing capabilities
Feed reference labs and offer a limited test menu Can be either owned or franchised Located in hospitals, nursing homes, pathology labs Samples are collected and forwarded to either a satellite/reference lab.

Satellite labs

Collection centers

Service Delivery Model

Advanced Diagnostic Centres
Referrals

Pathology Labs

Referrals Referrals

Village GP (Basic Diagnostics)

Town GPs (Basic Diagnostics)

Technology based Collaboration

Reference Medical Centres

Thank You