JEGATH PRABHU S PGP/16/25 jegathps16@iimk.ac.in +91 9539668216

MADHUMITA PATNAIK PGP/16/27 madhumitap16@iimk.ac.in +91 8943690758

MOHAMED ANAS S PGP/16/150 mohamedas16@iimk.ac.in +91 9745034583

SUBHASH SN PGP/16/350 subhashsn16@iimk.ac.in +91 8943694839

ANAND PATIL PGP/16/128 anandgp16@iimk.ac.in +91 8943690963

Infant mortality and Maternal Mortality are still prevalent in most of the developing and underdeveloped economies. Major reasons are low sanitation awareness amongst mothers, lack of proper medical infrastructure and ignorance of safe and proven methods of child delivery. In India the current IMR is 44 per 1000 live births. Statistics also report that only 47 per cent women in India have an institutional delivery and 53 per cent had their births assisted by skilled birth attendant. Almost 75% of the IM are preventable with adequate maternal care. Though the government provides kit for birth attendants, it is not good enough to save the child’s life at abnormal cases. Over 70% of our survey respondents working as nurses in UAE also highlighted the need to provide infrastructure and trainings to midwives about safe and proven child delivery methods. With primary focus on introducing low cost advanced healthcare solutions to rural India, we propose a new product to be termed as “SAFE Hands”. This will be a single unit comprising of all vital equipments required to attend a child birth. The products would be highly sterile with suitable arrangements deemed fit for usage in remote parts where electricity may be unreliable. The product would be highly portable. The product is targeted at midwives and traditional child birth attendants who otherwise follow old and unsafe methods of child delivery. Government would have to run a separate training program for midwives and would certify them. The business model would be only B2G during initial phases and would slowly move into B2B as well in subsequent stages. Well crafted procurement strategies are suggested which will be a vital for success of the business. The rationale behind the strategies are to achieve long term competitive advantage and economies of scale. For financial analysis the pricing model adopted is Cost Based Pricing. Each component’s cost is estimated based on the wholesale price as available in the market, which all together gives the net cost of the product.

Approach

Burning Problems in Indian Healthcare

Market Analysis

Problem Solution – “SAFE Hands”

Business Model and Analysis

Implementation Strategy

Components - Pricing & Sourcing

Challenges & Mitigation Strategy

Geographical Scalability of Solution

Key Financials

Issues in Indian Healthcare

Over burdened by increasing population

High Infant Mortality rate

Poor access to healthcare owing

to economic status

Continuing/ Emerging infectious

disease

Low doctor to patient ratio;

48:100000

Low health insurance coverage

HIV epidemic and tobacco

related diseases

Malnutrition

Why choose Infant Mortality problem?

Over 400,000 newborns die within the first 24 hours of their birth every year, the highest anywhere in the world, a study by an international non-government

organization, ‘Save the Children’

The annual State of the World’s Mothers report found that 56,000 mothers die annually

Nearly 75% of newborn mortality can be reduced by improving access to affordable medicines and timely

life-saving interventions

Key issues

Half of the total maternal deaths occur because of hemorrhage

and sepsis and are preventable with adequate maternal care

More than half of all married women are anaemic and one-

third of them are malnourished (have a body index below

normal)

A High quality Portable infant care kit can save lives of many infants dying each year

Primary Research

71.4%

21.4%

0

7.1%

0

0.0 50.0 100.0

% Percentage of Respondents

Practices followed for baby delivery care in India are Safe and Proven

Completely Disagree

Somewhat Disagree

Neutral

Somewhat Agree

Completely Agree

Survey was conducted among 15 Nurses and Midwives at International Level

(Mainly from UAE having Indian Origin)

Key Insights It is a well known fact that major causes of Infant mortality are inaccessibility to proper care and poor hygiene But following traditional unproven methods is also a cause of Infant Mortality

Healthcare Industry Trends

Indian Health care industry value - $ 65 Bn (2012) India spends 2.5% of GDP on Healthcare, Least among BRIC nations Private sector contributions 80-85% of investments CAGR from 2013 to 2015 is 20% annually

Key Players: GE Healthcare, Siemens Healthcare, Philips Healthcare, Hitachi Medical Systems, Toshiba Medical Systems

Clinical & Lab Diagnostics

Value $6.5 BN CAGR 15%

Value $ 8.6 BN CAGR 13%

Value $ 2 BN CAGR 6.4%

Value $ 5.4 BN CAGR 11%

Field Market Size Attractiveness

H L

Health Insurance

Medical Equipments

Healthcare BPO & IT

H L

H L

H L

Consumer Preferences

After Sales Service/Support

Value for Money

Geographic Location

Product Availability

S>G>P>T

P – Philips G – GE Medical S – Siemens T – Toshiba Med Firms are arranged from Left to right in decreasing order of Correlation between Consumer pref. and Firm Goals

Goal 2 Goal 1 Goal 3

Preference 2

Preference 1

Preference 3

Source: http://www.indmedica.com/journals.php?journalid=6&issueid=21&articleid=176&action=article

Preference 4

Market Size(2012) and CAGR (2012 to 2015)

KEY

S>P>G>T

S>P>G>T

S>G>P>T

P>S>G>T

G>S>P>T

P>S>G>T

G>S>P>T

G>S>P>T

G>P>S>T

G>P>S>T

G>S>P>T

Product Portfolio

Tie-ups with Suppliers

Market Share Firm Goals

Medical lamp for

examining

purpose.

Rechargeable

Stethoscope for

medical

examination of

mother & fetus.

Digital

Sphygmomano

meter for

mother’s BP

level (3 AAA

Battery)

To perform

episiotomy, a

surgical cut ,

make baby’s birth

easier & avoid

vaginal tears

Collecting the

infant and

examining

placenta

To determine

the amount of

oxygen in the

blood and

pulse rate of

Infant. Detect

Congenital

Heart Defects

(CHD). 3

AAA

Batteries

For providing

Neonatal

Resuscitation

& Child CPR

UV Technology

for sterilizing

steel

equipments

Incontinence

sheets,

Gauze

Swabs, Baby

Diaper,

Gloves,

Saline water

bottle, &

Basic

Medications

Used to

monitor

fetal heart rate

& uterine

contractions

while baby is

in uterus.

Rechargeable

Li-ion Battery

Measure

Infant’s weight

& Temperature

Clamp the

infant’s

umbilical

cord, post

cleaning the

infant’s face

& mouth

Disposables Examining

Lamp

Stethoscope &

BP Apparatus

Cardiotocho

-graph

Episiotomy

Scissors &

Vaginal Specula,

Spencer wells

Forceps

Umbilical

Cord Clamps

Rectal

Thermometer

& Weighing

Scale

Baby Warmer

Baby warmer

to maintaining

temperature

of low weight

& pre-mature

babies

Sterilization

Unit

Tray & Bowl

Pulse

Oxymeter

Infant

Resuscitation

Unit

Recharge Docks

Product Description & Significant Features

The product includes a 72 cm

size trolley bag comprising

necessary electronic

equipments and things essential

for safe baby delivery

The Equipments are

arranged in a sequential

manner that is in tandem

with procedures followed

during a child birth

All equipments are either battery

operated or rechargeable. The docking ports are used to

recharge these devices by

connecting via single wire into

AC supply

1 2

3

4

5

6 7

8

9

11

10

12

New Product

Existing Product

A compact portable infant delivery attendant kit with world class capability required for a safe and secure

infant delivery

Traditional Birth attendant kit with narrow range of simple amenities such as blanket, weighing scale, a

warm bag, a spoon and a torch

Quality Compiles with widely accepted and scientifically tested and proven methods which eliminates unsafe traditional practices in rural India

Differentiating factors

Government certification program for Midwives (Sahiyyas)

The product’s primary target will be midwives. Govnt. should run a

certification program that certifies the midwives as competent in service during

baby delivery

Phases of Business

Hygiene In-built sterilization unit enabling 100% infection control over existing traditional techniques

Global Standards A product not only suitable for Indian rural but also is scalable to developed countries

User-Friendliness Provision of a set of pictorial instructions easily comprehensible by common man

Design Innovation Innovative sequential arrangement of products in the kit and elimination of need for external charging of equipment

Phase II (B2G and B2B)

Phase III - B2G and B2B and International Expansion Phase I (B2G)

Porter’s Five Forces

New Entrants Threat Medium. Replicating the business model requires mobilizing critical resources and capabilities

Substitutes Threat Low cost equivalents may be a threat but unmatchable quality will stand out

Competitive Rivalry High. Fierce competition expected from a few big players trying to launch similar products

Buyers’ Bargaining Power Medium to High power – Since currently no product with equivalent quality and cost exists

Suppliers Bargaining Power Medium – Sourcing products from different players may be challenging

H

L

H

L

H

L H

L

H

L

Pilot Phase

1st Year

Phase II 4th & 5th

Year

Phase III > 5 Years

Promotion Place

Aggressive Social Media promotion through Philips page and Advertisement Apps

Organizing trade shows inviting Ministers, NGOs and Government officials

Free training workshops to midwives on the kit demonstrating the usability and efficacy

Before the start of this phase the product would have got better visibility hence the promotions stand on that assumptions Creating awareness to across the country to

all states through a mass media documentary

Segmentation Targeting Positioning

Segmentation based on accessibility & affordability of healthcare providers; the deciding factors in access to quality healthcare

Primary Target: Trained Midwives and birth attendants of rural areas Secondary Target: Gynaecologists, obstetricians

The product is positioned as a world class quality and low cost solution to take care of the child till it reaches the safe hands of the mother

Highly affordable Providers

Medium affordable Providers

Low affordable Providers

Rural Midwives

Primary Target

Less promotional activity within India; getting ready for scaling it to international level Tie up with global organizations such as

UNICEF and WHO

Distribution through government owned distribution channels and direct selling

Pilot phase will be launched in Madhya

Pradesh which has the highest IMR

On the success of phase 1 the product will be

launched in other states on one-on-one basis

Time to expand globally to prospective

countries having high infant mortality rate

In addition to government owned channels Distribution through NGOs and sales representatives to private hospitals

and medical centres in rural areas

Distributing to international community through exporting and distribution

channels owned by global organizations such as UNICEF, WHO etc

Distribution Strategy

Phase I 2nd & 3rd

Year

Components Sourcing Cost Leading Suppliers

Available with Philips

5000 Relevant Differentiation

Unique design & portable: Changing

the existing model of bringing patient to the

equipment -> Equipment to the

patient

Awareness Leveraging upon the existing Brand name

of Philips/GE as Leading Innovators

in Healthcare

Emotional Connection A Life saving

instrument. High quality delivery care system of child till it reaches safe hands

of mother

Accessibility Very highly accessible

as it will be made available in all PHCs

and CHCs

Attributes for Brand Building

Conducting training programs as a part of initiative by Govt. and NGOs and Certification by Philips This will act as a big brand building exercise

Midwives Certification Program

Net Cost = INR 1,71,200

Episiotomy Scissors / Vaginal Specula / Tray, Bowl

Examination Lamp & Headlight

Stethoscope & Digital BP Apparatus

Pulse Oxymeter

Rectal Thermometer& Weighing Scale

Baby Warmer

Sterilization Unit

Resuscitation Unit

Trolley Bag

Cardiotochograph

Disposable Surgical Equipments

Procure from OEM

Outsource to ODM

Outsource to ODM

Procure from OEM

Outsource to ODM

Procure from OEM

Outsource to leading ODM

Procure from GE Medicals

Outsource to ODM

Outsource to ODM

1500

2200

130000

1400

1250

6200

1650

11000

3500

7500

Philips

Medline, Baxter

Riester, Spencer Italia, JSB Healthcare

Jumper, GE Medical

Medline, Baxter

Jumper, Philips

Hangzhou, Rycom Electron Technology

Shenzen Wap –health Technology

GE Medical from Embrace

Olampus, Jupiter Scientific, Surgico

Samsonite, VIP

Developing strong relationships with governments of various states and central government Cutting edge technologies based on R & D Capabilities and Mindful acquisition of selective value adding companies Building strong distribution/ sales network Providing Value Added Services

Building good relation with suppliers and Customers (Service after sales) and making them feel very much an essential part of Supply chain Building International reputation for the product through relationship with NGOs and International Organizations such as UNICEF, WHO and World Bank

Dominant design with continuous improvement and value additions Building an optimized operations and Supply chain for cost reduction Philips presence in over 60 countries will give an edge for Philips in scaling the business in a faster pace

Short Term

Long Term

Both Long and

Short Term

Inimitability Study

Supplier Relations

Acquisitions and Partnerships

Dominant Design

Relations with Govt. and Other Insti.

Strong Supply Chain

International Reputation

Very High

Contributing Factors Level of Contribution

High

Moderate - High

High

Moderate

High

Inorganic Growth Strategy

Acquisitions Partnerships

Products Companies Products Companies

Cardiotochograph

Jumper

Pulse Oxymeter

Rectal thermometer

Jumper

Hangzhou Universal

Surgical Equipment

Medline

Stethoscope & BP

Apparatus

Resuscitation Unit

Customized Trolley Bag

Spencer Italia, JSB Healthcare

Shanghai EMSS Med Tech

Samsonite

Source: World Bank

Analysis

World Africa

Scalability study is done considering two basic criteria; Market attractiveness and Ease of doing business Apart from these, politically stability of the countries is also considered since the regions under consideration are politically sensitive countries. [Source: Economist Intelligence Unit]

Market Attractiveness

Ease of Doing Business

Asia Latin America

Market Attractiveness

Ease

of

Do

ing

Bu

sin

ess

Africa

Asia

Latin Am.

Europe

North Am.

Market Attractiveness

Ease

of

Do

ing

Bu

sin

ess

Nigeria

Ethiopia

Uganda Kenya

Ghana

South Africa

Rwanda

Market Attractiveness

Ease

of

Do

ing

Bu

sin

ess

Pakistan

China

Indonesia

Bangladesh

Philippines

Vietnam

Nepal

Market Attractiveness

Ease

of

Do

ing

Bu

sin

ess

Brazil

Mexico

Haiti

Bolivia

Colombia

Market Attractiveness High Low Circle’s Size Indicates Market size. Do not compare circles between different regions

Market attractiveness is gauged through not only the Infant Mortality rate in particular region, but also through the total number of Infant deaths happening in that region each year Ex: For India (2011), Infant Mortality Rate: 47 per 1000 live Birth, No. of Infant Death: 1,273,000 [Source: World Bank]

World Bank ranks each country every year on ease of doing business based on certain important criteria for business operation. June 2012, India ranks 132 in the world in ease of doing business, with1 being most ease

Project Phase

Important Metrics

INR 63 Crores

407070042

The revenue has been projected from 2014 to 2022. Phase I : 2014 -16 (3 yrs) Phase II : 2017 -19 (3 yrs) Phase III : 2020 -22 (3 yrs)

Source : http://www.fulcrum.com/medicaldevice_appraisal.htm

582048000

8560

1201

3063 units

2.54 years

Assumptions

Average Sales of 3 years

15% CAGR

Net Present Value

Discount rate 12%

Outside India Madhya Pradesh Other States

Avg Units/Year

Revenue

PV

NPV

Phase I Phase II Phase III

182987308 129594955 91781515

103441608 205202289

2049 1033 520

Avg. Units sold in a year (Based on 8 yrs data)

Fixed Costs

Variable Costs

Break Even Units

Break Even Time

• World Health Statistics 2013 published by WHO • http://www.ncbi.nlm.nih.gov/pmc/articles/PMC521580/#!po=6.25000 • http://www.ncbi.nlm.nih.gov/pmc/articles/PMC521580/#!po=6.25000 •http://nrhm.gov.in/images/pdf/media/publication/brief-note-on-child-health/brief_note_on_ch_nov_2011.pdf

Financial Analysis Calculations