1) What makes a market attractive? How will you segment the healthcare information systems market in India and which segments would you recommend to Asclepius?

• The attractiveness of a market can be measured by using• McKinsey/ GE Matrix• Porter’s Five force model• BCG matrix

Attractive Market Attributes:Industry Growth Rate

High Entry and Exit barrier

HighThreat of Substitutes

LowBuyers Power

LowIndustry Rivalry

Low

• An average growth of 14 % per annum.• Total spending on healthcare has increased at a rate of 12.4%

from 2001 to 2010• HMIS market potential pegged at INR 4.6 billion• HMIS market potential expected to reach INR 9.8 billion by

2015• HMIS Industry expected to grow at 22% due to increased

adoption by existing hospitals and healthcare industry

Healthcare Industry: Growth Potential Snapshot

Source: India Brand Equity Foundation

Porter’s Five Force Model : HMISThreat of Substitutes:

Medium- Major Players like AllScripts

-Manual Work force-Alternate low priced software

for managing accounts and patient tracking

Potential Entrants: Medium

-Low investment-Not so attractive to bring in

competitors

Buyer Power: Low-Not many end to end HMIS

software-Low technical knowledge

-Not many companies offering specialized products and

consultancy

Supplier Power: Low-Many software vendors hence can

be outsourced-Inhouse software building

capacity

Industry Rivalry: Medium-High Growth rate of Indian Health care

Industry-Not many local big player brands

which provide HMIS software-Big foreign players like GE Healthcare,

AllScripts etc.

• The HMIS market can be segmented based on the basis of Type of Hospitals:

• Single-specialty• Multi-specialty• Nursing Homes• Charity Hospitals• Corporate Chains• Day Care centers

Size of the Hospitals: which depends upon no. of beds

• 30 to 100• 100 to 300• More than 300

• Characteristics based on size segmentation:

30 to 100 100 to 300 More than 300

Price Sensitive Single or multiple module End to end software

Hesitant to change Needs Support and Consultancy Needs support and consultancy

Generally single module Slight chance of end to end product sale

Needs support in terms of overall process improvement

Segment CharacteristicsDay care centers, nursing homes and charity hospitals(<100 beds)

Tight budgets, generic basic requirements

Charity hospitals(100+) Good process framework, enterprise level selling, complex decision making units

Single and multi-specialty hospitals Enterprise level selling, complex decision making units

Corporate chain of hospitals Holistic approach to product implementation, complex decision making units

Single specialty hospitals Demand of one specific module, depth of knowledge required

• Based on Segment Characteristics:

2.What are the factors that you will take into account while deciding on a sales strategy? Identify the same with relevance to Asclepius and its

target market

• Based on size• Based on type• Based on cost

Customer Segmentation

• Top Management : MD, CEO• Lower and Mid level

Customer Needs and Buying

Behavior• Module based or End to End• Limited time and knowledge• Consultancy

Complexity of the Product

Sales Strategy suggestion by analyzing segments of Asclepius by size and type

30- 100 Beds: Maximum Customers. Price sensitiveness is high. Average deal size is less therefore, more sales, less revenue.Strategy Suggested: Module wise sale, market penetration strategy, Use of resellers

100-300 Beds: Decent market size, Huge potential. Good average deal sizeStrategy Suggested: End to end product sale-Charak. Provide bundled offers to attract more customers, value added services. Use of resellers originally and own sales team involvement for warm leads.

100-300 Beds: The market size is low, but huge potential for customized end-to-end product. Very high average deal size.Strategy suggested: Market entry strategy with Charak and Management Consultancy. Best sales force contact. Maximum focus. Customized product.

3)Describe the decision making unit at a large hospital. How is understanding the decision making unit relevant to the sales strategy for Asclepius?

• Decision makers: MD, CEO• Influencers: Doctors, IT and administrative staff• Mostly through references• Some top hospitals had RFPs(request for proposal)• Top-down approach preferred over bottom up approach

Bottom up ApproachPros

Easier to get in touchWould understand the flow better

ConsWastage of time and energyNot much influence in decision making

Top Down ApproachPros

More transparent in evaluationLess cost sensitive approachInternal consultants would help remove bureaucracies

ConsDifficult to get appointment

Important to:• Increase effective touchpoints• Make better selling decision• Better selling of product features and benefits

Purchasing Behavior Of Various SegmentsSector Type Size Purchase Behavior Decision

MakerGo To Market Strategy

Public •Day Care Centers•Nursing Homes

<100 •Very High Degree of Price Sensitiveness•Sensitive to Change•Adhoc Processes•Generic Basic Requirements• Decision Making ProcessIs less complex, but involves red tape and bureaucratic hassles

Hence, Module Purchasing is preferred

Departmental Head

•Use Top Down Approach•Product Specialists •Use a Combination of In-house Sales Executives and Resellers

Public •Day Care Centers•Nursing Homes

>100 •Not too price sensitive•Sensitive to Change•Adhoc Processes leads to preference for Module Purchasing •Enterprise level Implementation possible, would involve red tape and a very complex decision making unit •Issues RFP

Modular: Departmental Head

Enterprise Level:Ministers or Govt. Official

•Use a both top down and bottom up approaches simultaneously•Product and Process(Customer) Specialist•Use a Team of Highly Dedicated In-House Sales Executives with a high level of understanding of govt. bureaucracies

4) Discuss the purchasing behavior of the various segments. How will you utilize this information to devise your go-to-market strategy

Sector Type Size Purchase Behavior Decision Maker

Go To Market Strategy

Private Charitable Hospitals

<100 •High Degree of Price Sensitiveness•Sensitive to Change•Adhoc Processes•Generic Basic Requirements• Decision Making ProcessIs less complex•Buying Based on References

Hence, Module Purchasing is preferred

Trust Head

Departmental Head

•Use Top Down Approach•Product Specialist•Use a Combination of In-house Sales Executivesand Resellers

Private Charitable Hospitals

>100 •Not too price sensitive•Well Defined framework of processes•Might issue RFP or make use of References for Buying

Here Enterprise Level Implementation is Preferred

Trust Head

CEO or MD

•Use Top Down Approach•Both Product and Process(Customer) Specialist•Combination of In-house Sales Executivesand Resellers

Sector Type Size Purchase Behavior Decision Maker

Go To Market Strategy

Private Single or Multi Specialty

<100 •High Degree of Price Sensitiveness•Might be Sensitive to Change•Adhoc Processes•Generic Basic Requirements• Decision Making ProcessIs less complex•Buying Based on References

Hence, Module Purchasing is preferred

Departmental Head

•Use Top Down Approach•Product Specialist•Use a Combination of In-house Sales Executivesand Resellers

Private Single or Multi Specialty,Corporate Hospitals

>100 •Price sensitive in terms of return on Investment•Well Defined framework of processes•Might issue RFP or hire an Independent Consultant•Prefer a Holistic Implementation•Have a complex decision making unitHere Enterprise Level Implementation is Preferred

CEO or MD •Use both top down and bottom up approach simultaneously•Product and Process(Customer) Specialist•Use a Team of Highly Dedicated In-House Sales Executives

What are the various go-to-market alternatives for Asclepius? What are their pros and cons and which model would you recommend?

Based on the data provided in the case, how many salespeople or resellers would Asclepius need to a) break even and b) effectively cover the market?

• Total Annual Sales target = 50 million• Sales cost (Max)= 10 million( 20 % of total sales)• Total Annual Other cost= 8.5 million• Seller: Yearly /per head cost= .828 million• Total seller incentive= 1 million(2%)• Reseller: Yearly/ per head cost= .1 million• Total reseller incentive= 3 million( 6%)• No of Sales exec= 50/4=12.5 sales exec• No of reseller= 50/10= 50 reseller + 5 sales exec( 1 for every 10)• Therefore total cost= 50* .1+5*.828+4= 13.14 million for reseller• Total cost for sales exec only= 13*.828+1=11.764 million