Faculty Name: Manisha Aujla

Designation: Assistant Professor

Subject: Strategic Management

Title of the Case: Strategies adopted by Fortis Healthcare Topic Covered: Strategies used in Business Development

Strategies adopted by Fortis Healthcare

Fortis Healthcare Ltd, the second-largest hospital chain in the country, is selling its Singapore-based hospital to NYSE-listed Chinese healthcare services firm Concord Medical Services for S$55 million ($40.2 million or Rs 251 crore), according to a stock market disclosure. "Our decision to divest is in tune with our strategy to intensify our focus on our hospitals and diagnostics business in India," co-promoters Malvinder Singh (executive chairman) and Shivinder Singh (executive vice-chairman), Fortis Healthcare, said in a joint statement.

The Indian healthcare sector has emerged as one of the largest service sectors in India in terms of revenue and employment, and the sector is expanding rapidly. The sector has registered a growth of 9.3 percent between 2000-2009, comparable to the sectoral growth rate of other emerging economies such as China, Brazil and Mexico. At the current growth rate, the healthcare industry in India will touch US$ 275 billion by 2020, according to a recent press release by the Confederation of Indian Industry (CII). The high growth of the industry is primarily driven because of domestic reasons and some of these are:-

 India's growing population and the increase in the number of affordable middle class people in the country.  India is seeing a shift in disease pattern from communicable diseases to the high incidence of non-communicable and lifestyle-related diseases which has triggered a demand for specialized treatment.  In-patient revenues of hospitals have increased since expenditure on lifestyle-related diseases has risen substantially.  Rise in insured population and widening demand supply gap.

A growing elderly population is also pushing for better facilities in the country. Others like wellness programmes, fitness programmes, health management, and preventive medicine- synonyms of healthcare are also growing more and more familiar

Fortis Healthcare Limited (FHL) , incorporated in 1996 ,established its first hospital in 2001, a New Delhi-based corporate hospital, gained remarkable brand reputation in a short span of time. It operated through multi-specialty hospitals, providing healthcare in key specialty areas like cardiac care, renal care, neuro-sciences, orthopaedics, etc. Besides, it operated a boutique style hospital, Fortis La Femme - focusing exclusively on women's health and maternity care. To provide quality service, FHL differentiated itself with its contemporaries in India by adopting unique hospital design, services, and programmes that comply with international standards. The company has alliance with international partners such as Aetna, Bupa, Cigna, GMC Services, HTH Worldwide, Vanbreda and World Access. These alliance helps the company provide quality, cost effective healthcare, medical expertise, and related health services.

The demographic shift and higher longevity of Indian population offered tremendous opportunities to many private corporate hospitals. To tap such lucrative opportunities, FHL followed hub-and-spoke model. To counter competition, FHL, going a step further, started acquiring other hospitals. Also, it planned to integrate backward and set up medical and nursing college in addition to research labs. Fortis Healthcare is engaged in providing the latest in internationally recognised medical care to patients with a variety of ailments and medical conditions. The Network of Fortis consists of Super Speciality Hospital Hubs that concentrate on one or more specialities. These hospitals are interconnected to a larger network of multi-speciality hospitals that ensures patient access to expert care for any speciality. This unique net work architecture provides expert care to patients and a level of confidence in receiving the latest medicines in offer.

The company’s international operations are expected to generate roughly US$500 million in sales this year, on a par with Fortis’ India operations.

Some highlighting aspects are as follows ::

 2004 : Fortis inks deal with Jessa Ram Hospital to take over the management of the hospital ,

 2005 ::  -Fortis Hospital rolls out Golden Age Club  -Fortis buys Escorts Heart  -Fortis Healthcare signs $33.33m pre-IPO deals  -The Company was incorporated on February 28, 1996 as Rancare Limited under the Companies Act. Subsequently on June 20, 1996 our name was changed to our present name-Fortis Healthcare Limited. The Company received the certificate of commencement of business on July 1, 1996.

 2006  -Fortis Healthcare to buy majority stake in Trehan`s Medicity  -Fortis Healthcare signs $33.33m pre-IPO deals

 2007 :  -Fortis HealthWorld has joined hands with US hearing aid maker Starkey for its Audible range and is looking to soon offer dental services at its Health stores too.  -Colgate-Palmolive India, the market leader in toothpaste in India, declared the acquisition of three domestic companies in south India recently.  The company purchased 75 per cent equity in Advanced Oral Care Products (Goa), Professional Oral Care Products (Goa) and SS Oral Hygiene Products (Hyderabad).  -Fortis Healthcare acquires Hiranandani Hospital

 2008:  Fortis Hospital, Noida Becomes first hospital In Uttar Pradesh to receive the coveted NABH Accredita  Fortis Escorts Becomes First Hospital in Faridabad to Launch Total Knee Replacement Unit

 2009:  Announces taking over of the operational and management control of the 200–bed Apollo Modi Hospital in Kota (Rajasthan) for providing superior healthcare services in the region.  Launches dental centre at Malar Hospital, Chennai, with the aim of promoting dental tourism in the city. The Fortis Dental Centre has been floated on partnership basis with dental chain Axiss Dental  Fortis completes Wockhardt Hospital Acquisition

 2010:  Completes acquisition of 23.9% stake in Parkway Holdings  Divests entire stake in Parkway to Khazanah  Adds cancer institute in its hospital portfolio  Inks pact with Republic Of Burundi  Inks MOU with RAK Hospital and Tanzania's RMC  Strengthens presence in Central India Network; touches 50 hospitals mark  Acquires O P Jindal Hospital in Raigarh, Chhattisgarh  Unveils new hospital in Shalimar Bagh in Delhi  Adds Vivekanand Hospital to its network

 2011 :  Signs MoU with Utah University for specialized care in emergency medicine  Changes name of company from Fortis Healthcare Ltd to Fortis Healthcare (India) Ltd.  Adds 100 bed Lifeline Hospital at Alwar in Rajasthan  Fortis Healthcare Ltd acquired 86 per cent stake in Super Religare Laboratories Ltd (SRL)), South–east Asia's largest diagnostics laboratory network to further strengthen presence across the healthcare value chain  Through its wholly owned subsidiary, has entered into an agreement with Cauvery Hospital Limited, Mysore, wherein Fortis will set up, operate and manage a Cardiac Centre in the hospital.  The name of Fortis Healthcare Limited shall be changed to Fortis Healthcare (India) Limited w.e.f. April 11, 2011.  Fortis Healthcare ties up with TotipotentRX to set up Stem Cell Therapy Centres.  Fortis Healthcare (India) Ltd has announced that it will buy 86 per cent stake in Super Religare Laboratories Ltd (SRL) .  Fortis Healt - Fortis announces new hospitals in Hyderabad and Agra.

 2012 :  Fortis Healthcare Ltd acquired Fortis Healthcare International Pvt. Ltd.  Fortis Healthcare Ltd launched the first colorectal hospital in Singapore, becoming the first Indian hospital chain with a greenfield hospital abroad.  Fortis gor Rs. 3700 Mn Equity infusion in SRL through IFC and NYLIM Jacob Ballas India.  Fortis Healthcare raises around S$510 mn through Singapore IPO.  Company has changed its name from Fortis Healthcare (India) Ltd. to Fortis Healthcare Ltd.

 2013 -"Fortis launches its Flagship Hospital, One of the First of its Kind in Asia Bridges the gap for expert talent, trans-disciplinary, quaternary care". -"Fortis to divest stake in Quality Healthcare to Bupa for US$ 355 million Intensifies Focus on Healthcare Delivery in India".

 2014 -"Fortis launches state of the art, multi super-specialty hospital in Ludhiana".

 2015 :: Malaysia's IHH Healthcare Bhd, Asia's largest hospital operator by stock market value, has scrapped its proposal to buy Singapore's Radlink-Asia Pte Ltd for 346.53 million ringgit ($93.31 million). The deal fell through due to non-satisfaction of certain conditions in the sales and purchase agreement, according to a stock exchange filing to the local bourse late on Friday. Radlink-Asia, a unit of India's Fortis Healthcare Ltd, provides healthcare services including outpatient diagnostic and molecular imaging services in Singapore

The country’s largest hospital chain Fortis Healthcare Ltd is sharpening its focus on the domestic market while Apollo Hospitals and Manipal Health Enterprises are eyeing both domestic and overseas opportunities in the mainstream hospital businesses and related areas. Fortis Healthcare, which recently sold its overseas subsidiaries in Vietnam and Australia, wants to almost double its bed capacity in India in the next few years. Fortis has 70 hospitals in India, Canada, Dubai, Hong Kong, Mauritius, New Zealand, Singapore and Sri Lanka.

Questions : 1. What are the various strategies adopted by FHL from scratch till date? 2. What strategy would you like to suggest and why? References ::

1. http://www.fortishealthcare.com/india/hospitals-in-delhi-ncr 2. www.moneycontrol.com/india/stockpricequote/.../fortishealthcare/FH 3. http://articles.economictimes.indiatimes.com/2015-03-27/news/60553741_1_fortis- healthcare-ltd-singapore-dollar-singapore-hospital