Dr.

Harris Turino
harristk@indo.net.id harristk.blogspot.com

1. External Analysis 2. Future Analysis

Introduction
Our business model and strategy are set up by matching up to external and internal environment. When external environment changes, the power of business model and strategy is deteriorated reduce companys sales and profit

 External analysis is identification factors outside the company boundary that might influence its business performance. This analysis helps us to :
o Provide an update understanding about environment where we (will) compete o Identify Opportunities and Threats o Guide in creating scenarios in the future o Initial information to guide strategy formulation

Politic/Regulation
Socio Culture
Supplier

General Environment
Economy

New Entrant

Buyer

Industry Environment

Demography

Substitute

Technology Globalization

Competitive Environment

Company Environment (internal analysis)

Golden Period
<= 4 hours

Intensive Care
+/- 7 days

Non Intensive Care

+/- 7 days

Post Stroke Rehabilitation

2 months 12 years

First Aid (ICU)

+/- 30 minutes

First Rehabilitation
+/- 7 days

Immediate Integrated Intensive Continuity

Aspect
Politic and Regulation Demography Socio Culture

Description
Align with government focus to develop health sector Inpres: 01/2010 (3rd priority accelerating development) PMK: 659/2009 (world class hospital) 234 mio in 2010, and predicted to 260 mio in 2020 (growth=1.05% p.a) Indonesians behavior and consumption are exposed high risk to stroke attack and its risk factors (hypertension, diabetes, hyper cholesterol, smoking, heart attack, etc) GDB growth Inflation BI rate : Stable: 4.0% - 6.3% : Stable: 5.0% - 6.6% : 6.5% since Aug-2009

Economy

Globalization

Attract more foreign competitor to entry: Kepres No 96 and 118 / 2000 (hospital ownership for foreigner) CAFTA (January 2010) More advance to prevent death from stroke Few rehabilitation providers optimize those technology

Technology

 This analysis includes the description of: 1. Industry Definition 2. Industry Life Cycle 3. Industry Structure 4. Industry Critical Success Factors 5. Industry Competitiveness

 Industry Definition: Post stroke rehabilitation service providers in Indonesia for upmarket. Post stroke rehabilitation service providers: o Their customers are dominated by stroke patients. o Fee >= IDR 100.000 / therapy / hour

Emerge

Growth

Shakeout

Mature

Decline or Extension
Life cycle extension

Industry Sales or Profit

rapid growth of suppliers many differentiation opportunities new customer relatively easy to catch

Sales

Time

Description of the functions, characteristics, activities and interrelationships of organizations within a defined industrial sector.
Post stroke rehabilitation service providers:
o o o Stroke Unit Stroke Clinic General rehabilitation

Fragmented geographically No market domination Relatively low differentiation Low switching cost Monopolistic market competition

The elements needed by companies in defined industrial sector to exist or succeed.

Specialist (neurologist, medical rehabilitation, audiologist, psychologist, etc.) attract, recommendation, coordinator. Sourcing to high skill therapies increase recovery and close interactions. Building comfortable condition make patients enjoy.

Equipments support therapies and as physical evidence.

Rivalry Intensity: Industry growth Fixed cost Differentiation Switching cost Exit barriers

New Entrant

New Entrant Threat: Invested capital Cost advantage Differentiation Switching cost Access to channel Regulation

Supplier
Bargain power of Supplier: Supplier concentration Buying volume Differentiation Switching cost Strategic value of input Integration threats

Rivalry

Buyer
Bargain power of Buyer: Buyer concentration Buying volume Differentiation Switching cost Information availability Benefit for buyers Integration threats

Substitute
Substitution Threats: Price Switching cost Customer preference

 What Five Forces Analysis for?

o Broader understanding about external factors that influence level of competitiveness, o Identify the strength of each forces o As guidance to formulate business strategy

Five Forces Analysis does not aim to test the attractiveness of an industry.

RIVALRY INTENSITY New Entrant Less differention Low switching cost High growth industry HIGH No market power Relatively less fixed cost Low exit barrier

NEW ENTRANT THREAT: Relatively low investment Less differention Low switching cost Low restriction of regulations

Supplier

MEDIUM

Rivalry
MEDIUM LOW

MEDIUM

Buyer

BARGAIN POWER OF SUPPLIER: Strategic value Buying volume Differentiation Switching cost For 3 kinds of input: knowledge, equipment & talent; financial; and general input.

Substitute

BARGAIN POWER OF BUYER: Less differention Low switching cost High benefit for buyer Much credence attribute Less power of negotiation

SUBSTITUTION THREAT Low switching cost Much substitutes as supplement

 Competitive environment analysis aim to get understanding about rivals (their products, target market, cost structure, positioning, strategy, etc.) Strategic group: group of companies that pursue similar strategies, characteristics and competencies. Strategic group can be used to:
o Simplification in analyzing our rivals (competitors) o Identify the closest rivals o Identify where we are (will be)

Broad

Distribution Channel

STROKE CLINIC

Moderate GENERAL REHAB

STROKE UNIT

Narrow

1-2

2-4

>4

Number of Therapies

Stroke Unit
# of therapy Specialist Inpatient Nursing home # of channel Structure Differentiation Target 23 Much Available (some) None - Few 1-2 part of hospital

Stroke Clinic
34 One few Mostly not available Some Few to some independent business

General Rehab
1-2 One None None 1-2 individual business Technical skill Therapist reputation broader

Hospital reputation Various therapies Specialist Various POD Stroke patient Stroke patient

 Supply-Demand Analysis Scenario Analysis

Upmarket Stroke Patient

450,000 400,000 350,000 300,000 250,000 Upmarket Stroke Patient Trendline

y = 6961.9x2 - 67322x + 347491 R = 0.789

200,000 150,000 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Upmarket Stroke Patient

2,500,000

2,000,000
y = 6961.9x2 - 67322x + 347491 R = 0.789

1,500,000

1,000,000

500,000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

3,500,000 3,000,000

Supply Demand

2,500,000 2,000,000
1,500,000 1,000,000 500,000 -

GAP

2010

2019

2007

2008

2009

2011

2012

2013

2014

2015

2016

2017

2018

2020

 Scenario analysis aim to describe the possibility of future conditions. Identify some uncertainty indicators (at least 3 indicators)

Based on those indicators, describe three or more scenario, e.g. pessimistic, most likely, optimistic; or modest downturn, more severe recession, full-blown depression.

Consumption Behavior Impacts Trend in 20142023 Number of stroke patients Not change

GDP Growth
Proportion of middle-up patient Increase

BI rate Cost of capital Increase

Consumption Behavior

GDP GROWTH
Decrease

BI RATE
Decrease Stable Increase

More healthy
Not change More unhealthy

Pessimistic

Increase
Decrease

Increase
Decrease

Most Likely

Increase

Optimistic

Pessimistic
Stroke Unit

Most Likely

Optimistic
Improve unit to dept Intensify R&D Increase therapists skill and competency Expand branch (if any) Expand branches to other cities More complete organization More specialists Inpatient & homebased therapies

Increase therapy fee Expand capacity (space, therapist, equipment) Outsource therapies Develop new package Cross selling and bundling Increase therapy fee Outsource therapies Expand capacity (space, therapist, equipment) Expand branches Develop herbal supplement Alliance with specialist

Stroke Clinic

Now, can you analyze your company external factors by your self?