Analysis Of Aster DM Healthcare Ltd. – Opportunities, Threats And Recommendations

Opportunities and threats

For any company to keep doing well it needs to understand its customer needs and identify the gaps that exist between customer demand and what the industry delivers. This goes the same for the healthcare industry also and the consumers’ demand with the industry is even way much higher than with other industries. The scarce of quality healthcare services at affordable prices and lack of an extensive customer reach are two wider reasons why the healthcare industry should grow in terms of quality service and higher customer accessibility. This sets the theme for the present study as it analyses “Aster DM Healthcare Ltd” under many parameters of the different management models and frameworks. The findings of the analysis will thus be utilized to recommend a few points of suggestions on how Aster can better address the gaps in the industry and even address the untapped areas.

As obtained from (Assessment 1), Aster is explored several opportunities and threats. The opportunities include online pharmacy and telemedicine, which grew in popularity, especially during the COVID-19 pandemic (Li et al., 2021). “Telemedicine” can help reach people in rural parts of India who either are short of money or don’t have access to a quality healthcare system. Telemedicine wouldn’t just mean providing consultation online, but more than just this. Indeed, a general primary consultation point alongside medications, examination, and investigation facilities can be major initiatives in days to come. The key to success would be using the most advanced technology to enhance the infrastructure system and utilize patients’ data to deliver testing and treatment accurately (Newschainonline.com, 2022). Further, there is always an opportunity to assist with government-run healthcare programs. This could be helpful for the company to get the much-required traction in India. People would get to know more than they actually are aware of Aster.

Besides opportunities, there are some clear threats faced by the company. The thinking of the Indian is different in the country’s urban and rural parts. Even the major cities have far more sensible thinking towards consuming the advanced care system than their counterparts in small cities (Dutta and Fischer, 2021). In addition, the market is fiercely competitive and Aster faces tough competition from the country’s major like Apollo, Fortis, and AIIMS (Indiancompanies.in, 2022).

The internal environment of a firm shows if they are prepared for facing off the challenges and leveraging the opportunities. The internal environment can constitute numerous organizational elements such as its staff, culture, leadership style, and others. In this section, the internal environment of Aster will be analyzed using principles and guidelines of some most popular management tools and frameworks. 

The value chain of Aster DM Healthcare can be divided into primary and support activities. As evidenced in “Appendix 1: Value Chain”, the primary chain activities of Aster are:

• Inbound logistics– this involves supplies of raw materials that Aster uses to make medical tablets, multivitamins, face masks, moisturizers, etc. (Asterpharmacy.ae, 2022).
• Operations– this involves the various processes that Aster takes to execute its actions. For example, Aster integrates with industry partners to increase its product/service portfolio.
• Outbound logistics– this is the entire supply chain management (SCM) of Aster that it utilizes to collaborate with its partners and distribute products to its end users.
• Marketing and sales– Aster conducts marketing and sales to promote its products and services to its intended consumer base. They use to remain in the public and create a much-needed buzz before any launch to garner ensured success.
• Services– Aster uses this to build up strong lasting relationships with its customers. The list of activities includes after-sales service, medical tablets, and others.

Aster’s operations also rely upon its numerous support activities. These are:

• Firm infrastructure– the infrastructure includes medical clinics, pharmacies, hospitals, etc. of Aster DM Healthcare Ltd (Asterdmhealthcare.com, 2022).
• Human resource management– this involves basic human resource management activities such as staff recruitment, induction and training programs, annual appraisal, and much more. However, Aster seems not doing good in some of these areas. According to “AmbitionBox.com”, Aster fares averagely in terms of the overall rating for the human resources department. The concerning areas have been the company culture, job security, career growth, and work satisfaction. Although this is just based on a few reviews, it still is a matter of concern for its highest management authority.
• Technology development– they have been trying for some time now to adopt and practice an integrated healthcare model to provide a technologically advanced care system (Asterdmhealthcare.com, 2022).
• Procurement– this includes various activities like purchase of equipment, supplies, and related services.

As the VRIO analysis of Aster in “Appendix 2” indicates, Aster should take things seriously to grow stronger from within the company to be better prepared for emerging challenges and leverage the rising opportunities. They have got skilled talent and keep rolling out recruitment campaigns, but need to take a further step to act differently from rivals (AsterDMHealthcare, 2022). For example, they should run a talent hunt program in the country’s rural parts to support its most anticipated “Telemedicine” journey. Although such a clinic is known for having less to fewer staff, it still is a big task to fulfill that need due to low literacy in rural areas (Nayak, 2018).

Internal environment analysis using management models and frameworks

As far as firm infrastructure is concerned, it is ever-growing with more facilities coming underway. Aster DM plans new strategies for its expansion in India such as focused clusters as well as new revenue streams (Asterhospitals.in, 2022). Besides, Aster has announced bringing healthcare closer to the doorsteps through its new plan for 455 facilities (Asterhospitals.in, 2022). As Aster claims, they are planning to launch more hospitals and other clinical arrangements in the vicinity of existing medical units in Bengaluru and Kerala state (ThailandBangkok.asia, 2022). The management believes this will ensure quick exchange of messages between departments and functionalities, and hence, quick service can be offered even under critical situations. As per Azad Moopen, the Chairman and Managing Director of Aster, the company is pushing its boundaries by considering telemedicine soon (ThailandBangkok.asia, 2022). However, that has to be on a larger scale to make an impact else things will go unnoticed by a large number of people. This is the time that innovative actions are taken because others are doing it in another way to reap the benefits. For instance, Fortis launches the “Workplace mental health program” to ensure employee distress level is well-taken care of (Business-standard.com, 2022).

This section performs an analysis of Aster using another set of management frameworks, tools, and models. The findings could be used in drawing out some points of recommendations for Aster to expand in India both organically and through strategic alliances.

3a Business level 

As in “Appendix 3: BCG matrix”, Aster DM Ltd. receives tough competition from two widely known names in India, Fortis, and Apollo. Fortis has been doing well and occupying a larger portion of the Indian healthcare sector. As per a report, the company’s revenue stands at Rs 4,638 Cr and market growth at a CAGR of 2.10% (3 Yrs.) (Indiancompanies.in, 2022). On the other hand, Apollo leads the market with a whopping revenue and market growth rate. The market revenue for Apollo stood at Rs 10,407 Cr and market growth at a CAGR of 16.08 % (3 Yrs.) within the same period as of Fortis.

Aster’s product/service offerings include many such as Aster pharmacy, Aster hospitals, Aster clinics, and Aster diagnostic centers. In regards to Aster pharmacy, there is scope to grow and the company should consider reinvesting in the sector. Aster is willing to expand its pharmacy network to regions where there is no hospital under Aster branding. They are planning to roll out about 650 pharmacies in India by 2025. To do so and to open up labs also, they are open to inorganic growth through acquisitions (Business-standard.com, 2022).

For Aster hospitals, the company should preserve the investments and keep exploiting the sector to offer quality affordable treatment services. This is worth noting that medical treatment in India ranges from budget to expensive packages. It is generally challenging for middle-income groups to afford major operating cases if they do not have any Mediclaim policy backing up the hospital expenses (Pilla, 2022).

As for Aster diagnostic centers and Aster clinics, there are scopes to improve. Instead of divesting from these sectors, it would be better to improve in the areas to keep the portfolio wider. For example, they can work on delivering accurate medical tests reports and collaborate with doctors to grab more customers and thus, attain increased fame. Aster clinics equipped with modern state-of-the-art facilities can help reach more customers than now. 

Ansoff matrix

Value chain analysis

As in “Appendix 4: Ansoff matrix”, Aster currently is in the ‘D’ quadrant as it has remained a conglomerate company maintaining diversification from its competitors with the help of new products and services. These have also helped Aster to expand to more regions in the world (Indiancompanies.in, 2022). India is a big market for Aster and hence, it should keep identifying new sectors and exploiting the existing ones to expand its offerings portfolio and increase its customer base. All these are required for Aster to increase its revenue and achieve a higher market growth rate with passing years.

As evident from “Appendix 5: Parenting matrix”, Aster DM Ltd is one of the fastest and largest growing conglomerates in the MENA region. They exist across almost all spectrums in the market. However, there are still some untouched areas, like telemedicine. Telemedicine is an emerging concept and can be utilized using the skills and resources of the company to make wider impacts. The rural part of India either doesn’t have access to a quality healthcare system or has less money to afford the service (Newschainonline.com, 2022). This is largely an untapped area and must be leveraged with excellent market standing and rigorous investment. Aster can do wonders with telemedicine; however, that requires an excellent understanding of who your users would be and how to enable the service from a small unit installed in the different parts of rural India. More importantly, they need to figure out the extent to which they need to go digital to serve the Indian rural population.

Of “Vertical and Flat” organizational structures, Aster Dm Healthcare Ltd has a vertical structure. This structure is generally common with larger companies like the conglomerate, Aster. This structure is more suitable for providing employees a larger sense of job security as well as creating an understanding of their respective roles in the company. This organizational structure is suitable both for skilled and new employees since they can utilize the guidance and direction available to accomplish their tasks (Yu et al., 2020).

7S framework 

Aster should do the following to ascertain that both hard elements and soft elements of the 7S framework are well managed. This is generally easier to make decisions in context to hard elements in the company, but not the soft elements. The behavior of soft elements is not easily predictable and cannot be judged entirely with the data. This involves some form of subjectivity also. Therefore:

• Structure– Core – keep updating the current one with an increasing business need to meet the needs for faster and more efficient communication between personnel and departments (Nwachukwu and Chladkova, 2019)
• Systems– Core – evaluate the current strategy to identify the loopholes to keep updating the system to an enhanced form (Gardiner and Reefke, 2019)
• Strategy– Core – evaluate the current strategy, so that, newer could be designed based on the gap between market demand and what Aster delivers (Kurniawan, Christiananta and Ellitan, 2018)
• Style– Additional – transformational leadership since Aster is operating more projects at one time that may require someone to keep the staff motivated towards the change and support the process through newer better strategies and much-needed funding (Eliyana and Ma’arif, 2019)
• Staff– Core – experienced, skilled staff is needed in every business domain to support the operations under changing and challenging circumstances (Griffiths et al., 2020).
• Skills– Core – emerging technical skills such as supporting digital systems at the Telemedicine format of clinics of Aster (Chen and Decary, 2020).
• Shared values– Additional – the values of Aster include excellence, passion, respect, unity, integrity, and compassion (Asterhospitals.in, 2022).

Indicates some benchmarking to be set for providing a world-class treatment service to patients. The sets of benchmarking could be setting up standards concerning its rivals, and one which is best in class. Strategic alliances are needed for inorganic growth to capture more markets. In this context, the following would be a few strategies:

• Strategy 1– To be number one in the market (hospitals, pharmacy, telemedicine)
• Strategy 2– To lead in Telemedicine
• Strategy 3- To utilize advanced technology like AI (Artificial Intelligence) to leverage rising opportunities in Telemedicine.

Some goals and their measures:

An integrated care model should be adopted by Aster to serve its existing and emerging business needs in India and abroad. Aster healthcare must go beyond its existing portfolio of products and services to address the needs of a broad audience spectrum and hence, become highly accessible to those who cannot access quality healthcare in rural parts of India.

VRIO analysis

Conclusion

It can be concluded basis analysis in the report that Aster is an emerging giant both in India and abroad. They have raised to the status of conglomerate and enjoy massive popularity in the country. However, the analysis indicates they trail Apollo and Fortis to a great extent in terms of a wider geographic presence. But they have expansion plans in India by 2025, which is huge. They must work in the ‘Telemedicine’ area in a way nobody has done so far. Before that, they must identify what are those areas where they can make a difference in. 

• Since they trail Apollo and Fortis in India, they must keep trying to become number one in the market. They can do so with a bigger portfolio of their product and service, and some brands in the country, like Aster Pharmacy and Aster Telemedicine.
• The ‘Telemedicine’ sector is growing; hence, Aster should take advantage. They should know that telemedicine is more than just online consultation. It is a Primary consultation point easily accessible to villagers in India. It is a pharmacy point that runs on automation and can perform a patient examination using digital ECG, otoscope, rhinoscope, laryngoscope, thermoscope, fetal doppler, etc. The pharmacy won’t have a doctor but a nurse to take care of all primary checkups and tests. There will be some installation costs but the service can be availed by rural people at as less as 275 rupees.

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