Abstract
The paper outlines the expansion strategies that can be undertaken by Cancer Care Hospital Australia that offers high standards facilities necessary for cancer treatment. The research shows the global industry analysis, with USA, India and Germany being among the top cancer care providers.
A critical analysis indicates that there is a potential market in developing countries, where there is a sharp increase of cancer related problems. The paper concludes by analyzing three potential markets that is Kenya, Singapore and Britain, with Kenya presenting the best market with a very high growth potential.
International Expansion Strategy
A Report of Cancer Care Hospital, Australia
Cancer care hospital is a service provider industry based in Australia. The hospital specializes in treatment of all types of cancers such lung cancer, neck cancer, gynecological cancer, melanoma and head cancer. The hospital is also a leading research institute of cancer related disorders.
With the recent increase in the number of people suffering from cancer, the hospital aims at providing high quality services to their clients at an affordable cost. The main business of Cancer care hospital Australia is to provide health care related services to the growing demand in the world.
Cancer care hospital, Australia has been facing stiff competition in this country. This is because of the increased number of cancer related service providers in the country. The hospital has continued to face challenges from foreign hospitals as well as local competitors, hence necessitating the need for expansion.
Due to the high quality facilities in the hospital, the Australian market has proved not to be substantial; hence the need to expand and target other markets in the world so as to accomplish their goal of becoming a world class cancer treatment centre.
Global Industry Analysis
Cancer has become a major concern in the world today (Gates 2007). It is the primary cause of death in both developed and developing countries. A report indicates that cancer related problems might increase to more than 50% by the year 2020 (World Health Organization 2008).
This disease is very expensive to treat and only patients from developed countries can afford treatment. A report indicates that cancer related problems such as premature death and disability, not including medical bill, cost the world more than one trillion dollars. With increased medical cases, different countries have come up with hospitals specifically designed to take care of cancer related problems.
Countries Providing Cancer Treatment
United States of America
USA has been a leading player in this industry. There are several hospitals in this country that specialize in cancer treatment. University of Texas M.D. Anderson Cancer Center is the best ranked hospital for cancer treatment (World Health Organization 2008). The hospital is said to have the best facilities for treating cancer and other related complications.
Other cancer leading hospitals in this country include Memorial Sloan-Kettering Cancer Center, John Hopkins Hospital, Mayo clinic and Dana-Farber/Brigham and Women’s Cancer Center (World Health Organization 2008). There are also more than nine hundred hospitals in this country that deal with cancer related problems (World Health Organization 2008). A pilot research that was carried out showed that cancer care centers received more than 1000 new related cancer problems every year (World Health Organization 2008).
The hospitals treat both local and foreign patients, especially from the affluent class in developing countries. Most of these hospitals are accredited as cancer institutes by commission of cancer in the USA (World Health Organization 2008), having met all the necessary requirements. The hospitals contain modern facilities which are useful in detecting and treating cancer. With the increased number of cancer related problems, the country has continued to face major challenges in meeting the demand of cancer patients.
According to the World Health Report 2008, most of the developing countries in Asia, South America and Africa account for more than 60 % of cancer diseases, yet most of these countries do not have facilities which can detect and treat this disease. As a result, most of them travel to the United States in order to receive treatment hence exhausting their facilities.
India
This is another major player in this sector. It is commonly referred to as the medical tourism country of the world for cancer related problems. The country has various hospitals specializing in offering cancer treatments.
The hospitals include Apollo cancer hospital, Amala cancer hospital, Dharamshala cancer hospital in Delhi, best cancer hospital India, Bangalore institute of oncology, Gujarat cancer research institute, Kidwai memorial institute of oncology, Sibar cancer hospital and TATA memorial hospital among many others (World Health Organization 2008).
According to a research that was carried out in India, it is estimated that there are more than 1.5 million cancer cases reported per annum. This is a very high number compared to the hospitals in this place. Statistics indicate that in India, cancer prevalence is over 2.5 million with over 800000 new reported cases each year.
It is estimated that India earns more than 2 billion US $ from medical tourism. The number of patients from abroad is expected to rise this year with an estimate of 15%. This indicates that India is a key player in this sector. Majority of the patients who visit India for treatment come from Great Britain, East Africa, Malaysia and Singapore. Due to the increase in the cost of treatment in developed countries, India has taken this as an advantage to market its sector (Block 2009).
Germany
Germany is also renowned as a major player in cancer treatment. It said that other cancer clinics from other parts of the world originated from Germany, hence it is highly respected for their high quality services. Another country in Europe that is accredited due to their cancer treatment services is Spain. The country offers alternative cancer treatment that improves body cells. This makes the country a popular destination for cancer related problems (World Health Organization 2008).
Clients Of Cancer Services
According to a data released by world health organization (W.H.O), it was estimated that 7.6 million people died of cancer in 2005 and the trend is rising (World Health Organisation 2008). The same organisation estimated that in 2015, more than 84 million people will die due to cancer related problems. This indicates that there is need for a serious intervention in order to face this challenge. Cancer related problems were mostly associated with developed countries but this is not the case.
A recent report by W.H.O indicates that over 60 % of cancer cases are recorded in less developed countries. Most of these less developed countries cannot afford the cost of cancer treatment. Most of these countries do not have specialized cancer care facilities, hence there is a need to meet this growing demand.
Most of the hospitals in less developed countries cannot meet the standards as they do not have enough facilities required in treatment of cancer. This means that most of the patients who can afford have to travel abroad in order to access treatment.
In developed countries, there has also been a sharp increase in cancer related diseases. This has resulted in increase in the demand for cancer care treatment. Hospitals in these countries are not able to meet the growing demand, hence forcing the patients to seek medical help from other countries.
Due to this increase in demand for cancer care treatment, there is need for Cancer Care Australia to expand into these regions in order to meet this growing demand. Some of the major consumers are patients from developed countries who cannot afford the cost charged in their hospitals and patients from developing countries who travel abroad to receive treatment.
Hospitals providing cancer care treatment have been in the forefront to improve their services through incorporating information technology in their services. Hospitals have been in the forefront purchasing necessary equipments used to detect and treat cancer related issues. Hospitals in this sector have incorporated the element of research in order to improve their treatment. Cancer care hospitals such as University of Texas M.D. Anderson Cancer Center and John Hopkins are leading in cancer related research.
Potential Markets
The demand for cancer treatment is on the increase globally. In almost all countries in the globe, there are fewer facilities to meet the demand of cancer patients. However, this challenge is mainly felt in Africa, where there are few hospitals dealing with cancer cases. Those already dealing with such cases are not well equipped. Other regions where there is a potential market for setting up a cancer care hospital include Asia, South America and United Kingdom. Some of these potential countries are discussed below:
Kenya, Africa
Kenya is a strategic country located at the Eastern part of Africa. The country is a gateway to many countries in East and Central Africa. According to a report released by Kenya cancer association (KENCASA), the number of people dying from cancer is more than that of people dying from malaria and HIV related complications (Kenya Cancer Organisation 2011).
According to this report, it is estimated that more than 18000 people die out of cancer related complications in Kenya per annum. Kenyatta national hospital is one of the referral hospitals in Kenya and in the neighboring countries. It attends to more than 4000 patients suffering from cancer related complications annually. The largest hospital in the country used to have only two Radiotherapy machines and only one was operational.
This is a clear indication that the hospital cannot meet the growing demand in the country and the surrounding countries. In this hospital, there is a cancer unit with 25 patient’s bed capacity. The country also faces a major challenge in that there are no cancer specialists who can comfortably deal with cancer related cases.
Kenya is, therefore, a potential country that Cancer Care Australia can relocate to. There is a ready market from the cancer patients in this country and other countries in East and Central Africa. Due to limited facilities in this region, most of the people seek medical attention abroad and it is estimated that a medical trip will cost approximately two million shillings.
By setting up a high class cancer care facility in this region people, will be able to save the cost of traveling, hence increase demand. Due to the fact that most of the hospitals in this region do not have the necessary facilities required to treat cancer, relocating to this place will create an alternative to the millions of people seeking medical attention from abroad.
In Uganda, a neighboring country to Kenya, it is recorded that cancer kills more people than tuberculosis, HIV AIDS and malaria combined. This is the same case in other neighboring countries such as Rwanda, Tanzania, Sudan and Burudi. Setting a good cancer care centre with all modern facilities in Kenya will be able to provide medical services to clients from all these countries.
Asia, Singapore
Relocating cancer care to Singapore will meet the growing demand in this part of Asia. According to a report from World Health Organisation, Asia recorded 112 deaths per 100000 people in 2005. The same report indicates that there may be a 45 % increase to 163 per 100000 people by 2030.
This indicates that the region will be having the highest number of cancer deaths compared to other regions such as USA and Britain, hence there is need to intervene. Most of the developing countries have limited access to anti cancer drugs, with USA, Britain and Japan absorbing more than 90% of the total supply (Block 2009).
Due to the increase in cancer adoption behaviors such as smoking and poor diets, it is expected that the number of people suffering from the disease is going to increase, especially in Asia. This will strain the medical facilities in this country, making it hard for them to meet with the rising demand.
Through relocating to Singapore, Cancer care Australia will enjoy a good market without facing any major competition. Relocating to this area will reduce the burden of traveling to other countries such as India, where facilities are also strained. Most of the countries in Asia do not have medical facilities specializing in cancer treatment and those that are there do not have relevant facilities. Cancer Care Australia, a modern hospital with all facilities, will enjoy a good platform almost as a sole provider of cancer treatment in this part of the globe.
Britain
This is another potential market for Cancer Care Australia to relocate in. According to world health organization report, Europe has the highest cancer prevalence, with 215 deaths per 100000 people in 2005. The prevalence is expected to rise to 234 deaths per 100000 people in 2030.
The disease accounts for more than 20 % of deaths in this region. The report also indicates that there are more than 2.5 million cases of cancer diagnosed every year. Some of the factors associated with this high rate include poor diet, lack of exercises and exposure to some dangerous chemicals in the industries.
Setting up a cancer care in this area will be a good alternative to majority of patients seeking help from other countries such as India and USA. Most of the countries in Europe offering these services are very expensive, hence not affordable to majority of the patients. Setting up a cancer care in this place with all modern facilities will meet the growing demand in this area as well as make good profit.
Strategic Analysis And Recommendations
There is a potential market for cancer related treatment in the three countries: Kenya, Britain and Singapore. However, before deciding on which country to expand to, it is important for the company to consider several things as well as the business environment in the three different countries.
Business environment are the factors surrounding a business that influence its performance either positively or negatively (Fernando 2011). Components of business environment include political, legal, environmental, social, economical and technological environment. (Lucas 2000)
Business Environment in Kenya
Kenya has been in the forefront in creating a good business environment so as to attract investors from other countries. In order to comply with the legal environment in Kenya, one will need to follow 11 steps before a company is fully registered.
Step number one involves registration of legal entity, statistical, and tax registration with the Center for Public Registration, Stamp the memorandum and articles and a statement of the nominal capital, Pay stamp duty at bank, Declaration of compliance (Form 208) is signed before a Commissioner of Oaths /notary public.
Step five is File deed and details with the Registrar of Companies at the Attorney General’s Chambers in Nairobi, Register with the Tax Department for a PIN and VAT online, Apply for a business permit, Register with the National Hospital Insurance Fund (NHIF), Register for PAYE and the last one is making a company seal after a certificate of incorporation has been issued (World Bank Group 2012).
Before commencing its activities, a company should comply with all these steps. Political environment in Kenya has been stable for the past four years after the post election violence that took place in 2008. Kenyan economy is in the rise for the last decade; hence any business in this country is bound to succeed. The country is also advancing technologically; therefore, any business located in this place will be able to embrace technology without incurring high costs of installations.
Business Environment in Singapore
Singapore is one of the most business friendly countries in Asia. The country presents an enabling business environment that makes it easier to start and sustain a business. When registering a company in Singapore, the first step is name approval by the registrar of companies. Once the name has been approved, the filling of incorporation request form is done and approved by the registrar. After the form has been approved by the registrar, the form is signed by the directors and shareholders of the new company.
Registration cost in Singapore is approximately $300 (GuideMeSingapore.com 2008). The country is strategically located. Therefore, it is accessible by many people from different parts of the world. The country has continued to enjoy a stable political environment.
The economy of this country is also doing well, with a high potential of growth in the near future. For a business to thrive, the social environment is very important. Singapore has one of the most friendly and active labor forces. The country has invested heavily in technology, hence providing a good technical environment to any business.
Business Environment in Britain
Registering a company in Britain is easy. One needs to follow only seven steps in order for the company to become fully operational. The first step involves coming up with a unique name that does not resemble another company’s name. After choosing a name, one is required to fill a memorandum and articles of association form.
The forms are then submitted to the registrar of companies. Step number four involves registration for VAT and then PAYE. The company becomes fully registered once you sign up for an employer’s liability insurance form (FindLaw 2008). The political environment is very stable hence no risk involved as you set up your company in this place. The country is highly advanced in technology and with good clear environmental rules to comply with.
Recommendations
Considering the three potential countries, Britain presents the best business environment. It is easy to start and register a company in Britain than in any of the two countries. However, when comparing the potential market in the three countries, Kenya presents the best opportunity for growth.
This is because the hospital will be strategically located in that it can serve different countries such as Rwanda, Burudi, Tanzania, Sudan and Uganda. The hospital will also attract patients from other parts of sub Saharan Africa and Southern part of Africa.
Setting up the business in Singapore is an ideal place and there is potential for growth though there are many competitors such as India and China. This means that the hospital will face competition from these countries and this may result to high expenses incurred while competing, hence reducing profit.
Cancer Care Australia should seek to relocate or expand to Kenya where the cost of doing business is not very high, there is ready market from the surrounding countries, no major competitors hence the hospital will be operating as a monopoly and the workforce in the country is friendly and active. Another advantage of relocating in Kenya is because of the stable political environment hence there is no high risk involved. The political environment is very crucial in determining business growth (Nieman and Pretorius 2007)
Once Cancer Care, Australia relocates to Kenya, the hospital will make high profits due to the increased number of patients. The hospital will also have a good opportunity to grow because statistics indicates that the prevalence of cancer is on the rise in developing countries such as Kenya and its neighbors.
Reference List
Block, K 2009, Life over cancer: Integrative Cancer Treatment, Bantam, Bantam City.
Fernando, A 2011, Business Environment, Pearson Education India, Delhi.
FindLaw 2008, Starting a Business: License and Permit Checklist. Web.
Gates, R 2007, Oncology Nursing Secrets, Mosby, Missouri.
GuideMeSingapore. 2008, Singapore Company Registration Guide. Web.
Kenya Cancer Association (KenCASA) 2010.
Lucas, M 2000, Understanding Business: Environments, Routledge Publishers, London, U.K.
Nieman, G and Pretorius, M 2007, Managing Growth: A Guide for New Business Ventures, Juta and Company Ltd, South Africa.
The World Bank Group 2012, Doing Business: Measuring Business Regulations, Starting business in Kenya, World Bank Group.
World Health Organization 2008, World Health Statistics, World Health Organisation publishers, Geneva.