APOLLO HEALTH AND LIFESTYLE

LIMITED:
RETAIL FRANCHISING IN THE
HEALTHCARE
INDUSTRY
Group : 4

Case facts
2

Apollo Health and Lifestyle Limited (AHLL) is a wholly owned

subsidiary of The Apollo Hospitals Group.

AHLL was set up in the year 2001.

Its first initiative since inception has been the setting up of a large
chain

of

day-to-day

healthcare

clinics

across

the

subcontinent called The Apollo Clinic on a franchised basis.

Franchisee model

Indian

The Apollo Clinic Model

3

The Apollo Clinic is an integrated model and offers facilities for

Specialist Consultations, Diagnostics, Preventive Health Checks,
and 24-hour Pharmacy, all under one roof.

The Clinic also provides a range of value-added services such as

second opinion from a panel of leading experts through
telemedicine and counseling on various lifestyle parameters.

Strength
4

Brand name
Apollo has a strong brand value and that will attract customers.
Access to the latest knowledge in the medical field through Apollo
Hospitals can attract physicians also.

Value for money

Apollo can offer good quality at affordable price. From the case
regarding the competitors, nobody has such a proposition.

First mover advantage.

First to identify retail healthcare opportunity.

Training
Company is able to retain its control over brand value and processes
by good training.

Well designed clinics.

Functional efficiency to better use the resources like doctors and

support staff productivity.

Pleasant ambience through proper use of colors and lightings.

Easy to replicate and thus easy to maintain uniformity.

Weakness
6

High initial requirements.

(4000 Sq. ft, licensing fee and setting up cost)

Improper selection of franchisee (No medical background)

Failure to match Apollo standards.

Only five percentage convertion in case of franchisee applicants.

Marketing activities seems to be not very effective.Advertisement

campaigns dont convey the message properly.

This advertisement does not bring out what the core service offered
by AHLL is. It looks like an advertisement for a diagnostic laboratory
services.

AHLL is focusing on volumes than margins and thus will take some
time to breakeven.

Initial team recruited and trained had quit.

Dropout of doctors.

Poor patient flow.

Opportunities
9

Revolution in healthcare industry is increasing opportunities for

preventive healthcare. So, proper execute the franchisee model.

Changing Lifestyle

Convert into specialized clinics like Apollo dental care, Apollo eye
care etc

Study the market and invest more on high potential market

segments. May be initially focus on tier 1 and tier 2 cities.

Sensitize customers on quality.

Lack of awareness about the importance of primary health care
among people. People still go to hospital only when they are ill or
have some physical discomfort.

Doctors with existing clinic should be attracted.

Under served and poorly served markets

Population on the rise

Threats
10

Nursing homes and clinics

Almost all cities and towns have nursing homes and clinics. These are most
commonly operated by doctors who neither have any specialization nor are
in a position to make significant investments.

Next door clinic.

Lot of poor quality service providers with little accountability.

Large government or trust hospitals

Laboratories like DDRC in the field of diagnosis and preventive healthcare.

Home healthcare

Withdrawal of Tax incentives

Should the company continue with the

franchise model?
11

Healthcare industry is booming.

Advantages:
Rapid expansion is possible with a
franchisee model.

Disadvantages:

Franchisee should have same

level of commitment as the
company.

Apollo need not incur any upfront

investment.

Franchisee is expected to put in the effort

and commitment.

Customer satisfaction is very

important.

Franchisee owner can enjoy having an

independent business, on the other hand
he has the reputation that comes from
being under the umbrella of a big brand.

Difficult to maintain
consistency in service.

Initial license fee of Rs 20 lakh

is too much.

Since Apollo is an internationally

recognized brand, opening Apollo Clinic
franchise minimizes business risks.

Letter from a franchisee

causes doubt about the
technical support from Apollo.

This will also increase the brand value of

Apollo hospitals.

Health insurance in the Indian

context covers the expenses
relating to hospitalization
only.

Should it decide on setting up an owned model?

12

Advantages:

Brand name.
Financial capabilities.
Experience in the healthcare
industry.
Better control over processes
and thus quality.
As it is difficult to find
trustworthy franchisees, it is
better to have owned model.

Disadvantages:

High initial investment.

Operational difficulties.

Difficulty in maintaining
consistency.

Should the decision to launch the

clinics under new brand be reviewed?
13

Apollo is a very powerful brand name in the healthcare industry. Trust

is a very important factor when it comes to healthcare as nobody
wants to take a toss on health.

Brand Apollo is associated with excellence in patient care, rapid

technology adoption and best-in-class health care services.

The benefit of this recognition and position clearly translate the

clinics working under this brand name the most preferred choice for
both local and international as well as medical professionals.

Apoll0 should actually utilize this strong associations on reputation,

quality of doctors, equipment and ambience.

Recommendations
14

Continue with the franchisee model and expand strongly.

Initial license fee should be reduced.

Handhold franchisees until a certain level and this should be seen as an

investment.

Technical support should be given from doctors at Apollo hospitals.

Doctors at the AHLL should have interactive sessions with specialist

doctors at Apollo hospitals, so that these doctors are motivated to stay with
the clinics. They feel like they are a part of Apollo family and also specialist
knowledge and new technology knowledge is transferred.

Doctors should have a profit share and a minimum fixed salary.

Advertisements should highlight preventive/primary healthcare service and
value for money.
Improper execution has lead to lose of trust of franchisees and customers.

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