Introduction
Although the proposed the venture can be beneficial to both sides, Stanford Medical Center (SMC) needs to consider various trade-offs that might emerge during the establishment and consideration of the business processes.
Analysis
First, SMC has to pay attention to services and products that the venture is going to include. The services proposed in the venture are human-based and impossible without the engagement of professionals and skilled personnel, which will require investments in staff’s repositioning and relocation. However, the identified expenses can be covered by SMC as the proposed business idea is a for-profit medical tourism center, which SMC will manage in the future according to the terms of the agreement. According to Berkowitz (2016), if the business is for-profit, some portion of this profit is often directed to shareholders. Thus, profits that will be gained by the facility (tourist medical center) can potentially cover the expenses SMC will have to endure and even provide revenues to the hospital.
Another consideration is the product line that is not specified in the case study. As this is a co-branding arrangement, prior to the launch of the services under the logo of SMC, both the Vietnamese government and SMC itself need to control and assess quality processes and the personnel (Berkowitz, 2016). To use SMC’s brand, the Vietnamese government will need not only to train the staff of the medical facility appropriately under the supervision of the personnel from SMC but also to report various issues, including hospital-acquired infections, medical errors, and their consequences (both nonlethal and lethal) to SMC to ensure that services provided at the medical facility are corresponding to the quality of that provided at SMC. At the same time, SMC should also consider how possible mistakes or improperly trained staff can affect their brand and future operations.
As the Vietnamese government plans to expand the services of the facility in Saigon and create a medical tourism center, SMC needs to evaluate what target market this affiliation will focus on. Patients from the USA or European countries can be attracted to provided services by a lower price and nature (considering that the latter a primary tool for capitalization). However, the lack of developed infrastructure, equipment, and qualified staff can affect SMC’s brand and the whole affiliation negatively if the provided services do not correspond with the quality of services expected from SMC and its alliances. A combination of recreation and quality services, supervised by SMC and provided by the hospital and staff trained by SMC’s professionals can be an option to support SMC’s brand and attract more customers who seek quality medical tourism that is priced reasonably (“Medical tourism in Vietnam”, 2015).
Conclusion
SMC has to consider how its co-branding value will be purchased by the Saigon hospital. As suggested by Berkowitz (2016) and shown in other examples, the Vietnamese affiliate can pay a fee for access to information or contact with SMC’s physicians. Another suggestion is a supervision program from SMC’s professionals provided for a fee to Vietnamese colleagues. It is also important to have a wide range of products to attract the target market, especially since the SMC is entering an introductory phase of its product (“Does your value proposition”, n.d.). Recreational services, among others, should be considered as primary services that can be of interest to the target market; furthermore, they can be coupled with relaxation services that can have a positive influence on the introductory phase of the product and SMC branding in the region.
References
Berkowitz, E. (2016). Essentials of health care marketing. New York, NY: Jones & Bartlett Learning.
Does your value proposition effectively communicate how you’re different? (n.d.). Web.
Medical tourism in Vietnam: Awaken the potential. (2015). Web.