Case Memo
I. Identify/Define the Key Issues/Situation Analysis
A. Key issues
Although India has a huge blind population with cataract, few of them have access to surgery due to a lack of enough qualified ophthalmologists. On the strength of this, Dr. Venkataswamy established the successful Aravind Eye Hospital, and in turn wants to spread the Aravind model to every corner of India, other parts of Asia and Africa through franchising. To implement this model, Dr. V has to find solutions to the various problems in finance, relationship with partners, management and reputation and other issues.
B. Key Success Factors
1. Aravind Eye Hospital has qualified medical personnel.
2. Administrative system is well organized.
3. The hospital boasts modern equipment.
4. Local sponsors support camp activities.
II. Mobilize Strategic Choices
We summarize three ways for the Aravind Eye Hospital to invest in the future.
A. Choice 1 – Joint Venture
1. Significance of choice 1 * Good local knowledge and network * Acquisition of experience for future development, such as franchise * Less finance stress and wider expansion than as a sole investor * More control than franchise
2. Reasons why choice 1 may not be optimal * Possibility of conflict with joint-venture partner * Slow decision making * High risk for being over-reliant on partner
B. Choice 2 – Franchise
1. Significance of choice 2 * Good local knowledge and network * Low risk and investment * Quick and wide expansion
2. Reasons why choice 2 may not be optimal * Low control * Reputational risk for different standards * Possibility of conflict with franchisee
C. Choice 3 – Sole Proprietorship Enterprise
1. Significance of choice 3 * Full control * Low reputational risk * Quick decision making
2. Reasons why choice 3 may not be optimal * High investment and risk * Slow expansion * Lack of local knowledge and network
III.
A. Key issues
Although India has a huge blind population with cataract, few of them have access to surgery due to a lack of enough qualified ophthalmologists. On the strength of this, Dr. Venkataswamy established the successful Aravind Eye Hospital, and in turn wants to spread the Aravind model to every corner of India, other parts of Asia and Africa through franchising. To implement this model, Dr. V has to find solutions to the various problems in finance, relationship with partners, management and reputation and other issues.
B. Key Success Factors
1. Aravind Eye Hospital has qualified medical personnel.
2. Administrative system is well organized.
3. The hospital boasts modern equipment.
4. Local sponsors support camp activities.
II. Mobilize Strategic Choices
We summarize three ways for the Aravind Eye Hospital to invest in the future.
A. Choice 1 – Joint Venture
1. Significance of choice 1 * Good local knowledge and network * Acquisition of experience for future development, such as franchise * Less finance stress and wider expansion than as a sole investor * More control than franchise
2. Reasons why choice 1 may not be optimal * Possibility of conflict with joint-venture partner * Slow decision making * High risk for being over-reliant on partner
B. Choice 2 – Franchise
1. Significance of choice 2 * Good local knowledge and network * Low risk and investment * Quick and wide expansion
2. Reasons why choice 2 may not be optimal * Low control * Reputational risk for different standards * Possibility of conflict with franchisee
C. Choice 3 – Sole Proprietorship Enterprise
1. Significance of choice 3 * Full control * Low reputational risk * Quick decision making
2. Reasons why choice 3 may not be optimal * High investment and risk * Slow expansion * Lack of local knowledge and network
III.