ENT 615: Strategy & Leadership for Entrepreneurs

Strategy & Business Fundamentals

5th March, 2025
Session 1

Desai-Sethi School of Entrepreneurship

ENT615: Strategy & Leadership for Entrepreneurs
Context

Founded in 1983

Core business overview:

>600 Clinics and Day Care, >6000 Pharmacies in 1100 towns

Tertiary hospitals: 50 cities, 75 hospitals, over 10k beds, 10k doctors

33 million Digital (24-7) users

Additional businesses: Education, Homecare, Hospitality

FY 2024: INR 20k cr revenues, INR 1000 cr PAT, INR 100k cr market cap

Ref: Annual Report FY 23-24

Where to Play Choices and Rationale

Metro Hubs for Advanced Procedures: Focus on complex surgeries targeting premium patients
World's best clinical outcomes in India, premium pricing and care wrt local hospitals
Services for family within TG: preventive, critical care, diagnostics
Tertiary care in large cities (including international patients)
Pharmacies all over, now omni-channel with 24-7 services

Ref: Annual Report FY 23-24

Right to Win / Positioning and Differentiation

Quality of outcomes (e.g. JCI accreditation)

Quality of doctors: CoEs, research focus

Quality of care: patient-centric approach

Quality of equipment: first in India (e.g. Proton, 640 slice CT)

Aquilion One Prism Biplane Cath Lab

640-slice CT

Ref: Google Images

Operating Strategies: Capabilities & Systems

FFS for doctors: recruit from the best, fee for service model (salary only for juniors)
Equipment: large capex, ahead of time
Training pipelines: nursing colleges, continuous upskilling, and global best practices
Technology: AI for predictive diagnostics, remote healthcare
Support services: maintenance, hospitality
Patient care: luxury hotel-like experience

Ref: Annual Report FY 23-24

Financial Model

High capex hospitals, high turns pharmacies and retail

Hospitals: Focus on boosting ARPOB, minimizing CWIP, and managing strong ROCE
Pharmacies: EBITDA growth and faster inventory turns
Network effect: Digital+Pharmacies+Clinics+Hospitals
Sustainable Returns: Balanced capex strategy, stable cash flows, and operational efficiencies

Ref: Annual Report FY 23-24

Leadership

Visionary founder: Dr. PC Reddy

Third innings (Started in 1983 at age 50), achieved industry status for
healthcare
Risk taker: large capex, PE investment
Resilient: works 6 days a week at 91 years of age
Inducted 4 daughters into the business

Ref: Google Images

Strategy & The Entrepreneur
Is there an Do I have Can
ATTRACTIVE ACCESS TO RESOURCES I DISRUPT
INDUSTRY /COMPETENCIES an existing industry or
where I can enter that can help me do well CREATE a new one to my
and do well? in some industry? advantage?

• Who is my CUSTOMER and WHY SHOULD

THEY BUY from ME RATHER THAN
SOMEONE ELSE?
• Can I PROFITABLY deliver this value
proposition?
• Is my model SUSTAINABLE?
Identifying Attractive Industries
Factors affecting attractiveness

Size

Growth Rate

Intensity of
Technology/Innovation

Government Policies

Source: Competitive Strategy, Michael

Porter
Identifying Attractive Industries
Porter’s Five Forces Framework
Threat of New Entrants:
How easily can new players
Threat of Substitutes:
enter and compete in your
Are there alternative solutions
market?
fulfilling the same customer
need?

Competitive Rivalry:
How intense is competition
among existing firms in the
market? Bargaining Power of Buyers:
Can buyers force lower prices or
easily switch to competitors?

Bargaining Power of
Suppliers:
How strongly can suppliers
influence prices and terms?
Leveraging unique and valuable resources and capabilities
• Resources • Unique
• Access to raw materials • Physically unique
• Specialised Plant & Machinery • Too long to imitate
• Brands • Too costly to imitate
• Patents • No-one knows quite how you do
• Data it
• … • …
• Capabilities • Valuable
• Process knowledge / Accrued • Can be used to deliver something
Experience of
• Customer relationships value to customers
• Supplier relationships • Different from competition
• Culture • Integrated into business process
• … • Used to enter multiple markets
• Continuously improved

Can you use your Resources and Capabilities to outperform

Competitors?
Disrupting or Creating New Industries
Why Disruptions happen? Strategies to disrupt
• Dominated by few players • Capture the Customer Interface
• Excess / fragmented Competition • Attract new source of supply
• Industry Large but “Not Attractive” • Cost / Quality Redefinition
• Powerful Suppliers / Distributors

UBER Napkin Sketch

iPhone Launch David Sacks, Bill Gurley
Redefining Mobile Industry in 2007
Who is my Customer and Why will They Buy?

WHO WHAT
(Characteristics) (Need) UNMET
• Demographic • Functionalities / CUSTOMER
Features NEED
• Geographic
• Quality
• Behavioural /Performance
• … expectations
• …
WHY WHERE
(Motivation) (How) YOUR
• Rational • Online Vs Physical PRODUCT
• Emotional • Self service / SERVICE
• … Vs concierge FEATURES
• …
Why from Me rather than Competitors?
Competitive Strategy, Michael Porter The Discipline of Market Leaders,
Michael Treacy and Fred Wiersema
COST DIFFERENTIATION CUSTOME
PRODUCT
based based
Competitiveness Competitiveness Leadership R
Intimacy
VALUE
WIDE
Customer DISCIPLINES
Segment
NARROW
Customer
Segment OPERATIONA
L
Excellence
● Cost Leadership: Compete on price by
● Operational Excellence: Efficient
driving costs down
processes, consistent low cost
● Differentiation: Stand out through
● Product Leadership: Continuous
unique features or branding
innovation, cutting-edge products
● Focus: Target a narrow market segment,
● Customer Intimacy: Tailored services,
either by cost or differentiation
strong customer relationships
Can I Profitably deliver this Value Proposition?

REVENUE
COST CAPITAL
• Price - What the customer is
willing to pay (excl • Variable Cost Vs Fixed • Equity capital is costly
discounts, promos etc) Cost • What are you using equity
• Recurring / Subscription • Risk Vs Efficiency capital for
Revenue Vs Project • Cost to Service Revenue
• Investing for future revenue
Revenue Vs In period • Cost to Acquire Revenue – R&D, Brand, Plant &
sales • Amortisation Machinery
• Overheads
• Revenue per unit (price) Vs • Overheads
• Servicing Revenue
Revenue per customer • Interest expenses
• Acquiring Customers
(LTV) • Taxes
• Path to Profit > Investment
• Collection Vs Sales
Define Business Model

• What do you sell?

• To whom do you sell it?

• How do you acquire customers?

• What is a typical transaction?

• How will you go to market?
• How does product flow?

• Who else is involved

○ Distributor / Partner
○ Advertiser
• How do you make money ? Business Model Canvas Template
Strategy vs Operational Planning
Implementation

Marketing
Plan Strategy is the
Supply Sales &
Chain Distribution guiding framework that
Plan Plan

STRATEGY shapes each functional plan,

HR Plan …
rather than just a

Finance
Sum Total of Operating
Plan
Plans
Feedback
So What is Your Strategy, and will it Work?

1. Have you identified an attractive industry?

2. Does your strategy tap a true advantage?
Matching an unmet customer need 3. Is your strategy granular about who your
with your unique ability to serve customers are?

to create and capture economic profit 4. Does your strategy say why you will be
better than your competition?
through an integrated set of choices,
5. Will your strategy deliver an acceptable
made ahead of time in the face of return on invested capital?

uncertainty, 6. Does your strategy balance commitment

and flexibility?
to commit scarce resources
7. Is your strategy contaminated by bias?
for expected outcomes.
8. Have you translated your strategy into an
action plan?
Thank
You