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IHH Health Care Berhad. Expansion to South Africa

von Niko Greger (Autor) Andrea Lindner (Autor) Felix Monash (Autor) Jacob Bröcker (Autor)

Hausarbeit 2015 18 Seiten

VWL - Internationale Wirtschaftsbeziehungen

Leseprobe

Content

Firm profile of IHH Berhad

Scanning of South Africa

Identification of Competencies

Mode of Entry

Operational and Exit Strategies

List of references

Firm profile of IHH Berhad

The IHH Berhad group is the second largest health care provider worldwide (Market capitalization 48.846 billion RM) with several health care brands in emerging markets (IHH Berhad, 2015a). The group owns 38 hospitals with 7,000 beds in eleven countries in Asia and Europe and employs 25,000 people. Further our company is listed on the Malaysian and Singapore stock exchange. The stock grew to 75% since its initial offering (Bloomberg, 2015). The annual sales of IHH Healthcare Malaysia have an amount of 2.4 million USD and the market value of the group rose to nearly 12.6 billion USD. (IHH Berhad, 2015e)

Our home markets are Malaysia, Singapore and Turkey. Our key markets are the People's Republic of China, India and Hong Kong. Further we operate in Brunei, Vietnam, United Arab Emirates, Macedonia and Iraq, as shown in figure 1.

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Figure 1: Markets of IHH (Own reseach)

Source map image: https://upload.wikimedia.org/wikipedia/commons/b/b4/A_large_blank_world_map_with_oceans_marked_in_blue.gif

The company focussed on premium-brand healthcare assets through a unique multi-market investment position in the healthcare sector. Our wholly owned subsidiary (WOS) Parkway Pantai owns our brands Mount Elizabeth, Pantai and Gleneagles. The brand Mount Elizabeth is only located in Singapore. Gleneagles is our biggest brand with hospitals in China, Malaysia and Hong Kong. Our subsidiary Abicadem is the leading health care provider in Turkey and has additional hospitals and clinics in Iraq and the United Arabian Emirates. Further we operate in the health care education sector with our WOS International Medical University of Malaysia. (IHH Berhad, 2015a)

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Figure 2: Structure of IHH Berhad (IHH Berhad, 2015a)

The health care sectors in the markets we operate in, are steadily growing. The market growth plays a crucial role during the decision making process for a new market. South East Asian countries have relatively low expenditures for health care with an average of 4,5 percent of GDP. Leading market researches expect a growth of health care expenditures and thus a growing market, in our key markets (Deloitte, 2014), (McKinsey, 2012).

According to this our company is planning expansions to additional markets with a high growth in the health care sector to a relatively low investment risk.

Scanning of South Africa

In order to understand the key issues of the potential market, we will conduct a PESTEL analysis of the South African market.

Political

In 2014 South African government started gradually selecting pilot sites and conducting various projects to improve health care systems in the selected districts, with provincial and national support (Deloitte, 2014). The report adds that South Africa’s health care system is two-sided: a large, under-resourced and overused public sector and a small, well-funded and well-equipped private sector. “The disparity in access to good health care between South Africa’s public and private sectors provides huge opportunities for innovative reforms that will increase access to wider sections of the population and generate additional value and revenue” (Deloitte, 2014).

Economic

According to World Bank (2015) the GDP of South Africa was $349.8 billion in 2014 with a forecast of an increase of two percent. GDP per capita in 2014 was $6477.9 (World Bank, 2015). The total health expenditure of South Africa was 8.9 % of GDP in 2013, of which 48.4% was a public expenditure which consists of recurrent and capital spending from government budgets, external borrowings and social health insurance funds (World Bank, 2015). Especially the private health care sector is receives investments from highly developed hospital groups. As a result the private health care sector of South Africa is growing (Deloitte, 2014).

South Africa has 4200 public health facilities, including 400 public and 215 private hospitals (Deloitte, 2014), with a usable bed occupancy rate of 70% (South Africa, 2015). The number of hospital beds owned private hospital groups is shown in figure 3.

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Figure 3: Number of private hospital beds in South Africa ( (Econex, 2013)

Improvements of the business environment for foreign investors led to an increase of FDIs to South Africa. A volume of 27,5% of FDI is invested in the South African market. Drivers of FDIs to South Africa are the increasing prevalence of peace, the democratic elections and improved governments. (KPMG, 2014). The OECD´s FDI Regulatory Restrictiveness Index of South Africa shows a value of 0,034 (0 = open, 1 = closed). This value is far under OECD average and shows a very unrestricted market for FDI (OECD, 2014). Further a survey of KPMG states that South Africa provides the lowest risk for FDI on the African continent (KPMG, 2015).

Social and cultural

With a slow, but steady growth rate of 0,1%, South Africa’s population is around 54 million. South Africa is considered as an upper middle-income country according to World Bank (2015). 62% of South Africa’s upper-middle income population lives in a metropolitan environment where most of the medical infrastructure is located.

The public sector struggled to recruit and retain enough skilled medical staff, with the number of doctors being merely 0.6 per 1 000 people, according to WHO (EIU, 2014). In addition, due to the shortage of doctors in South Africa, the government signed a co-operation agreement with Cuba in 1995 which allows Cuban doctors to practice in South (South Africa, 2015). According to Ataguba (2010) nearly 80% of doctors work in the private sector. In order to attract more foreign doctors, the government has made it easier for them to register in South Africa (South Africa, 2015).

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Details

Seiten
18
Jahr
2015
ISBN (eBook)
9783668122109
ISBN (Buch)
9783668122116
Dateigröße
1.3 MB
Sprache
Deutsch
Katalognummer
v309644
Institution / Hochschule
Monash University Malaysia, Sunway Campus
Note
Schlagworte
health care berhad expansion south africa

Autoren

  • Niko Greger (Autor)

  • Andrea Lindner (Autor)

  • Felix Monash (Autor)

  • Jacob Bröcker (Autor)

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Titel: IHH Health Care Berhad. Expansion to South Africa