Netcare International Expansion
Essay Preview: Netcare International Expansion
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South Africas Netcare Healthcare Holding Limited is one of the largest international private medical services suppliers companies. This case illustrates the challenges faced by Netcare in its international expansion and the strategies it implemented to succeed in the emerging markets. The big questions here are whether its strategies will benefit the organization to continue to grow as before, would the South African market represent an opportunity or hindrance, and where should the group focus its efforts to internationally expand?
International expansion requires from the organization to set a global strategy that will help it to gain a competitive advantage over its global competition. This global competitive advantage can arise from sources such as efficiency, strategic operation, learning, and reputation. When applying the previous on Netcare international operations, will find out that Netcare gained a competitive advantage by operating its business efficiently, achieving economies of scale, and containing cost without sacrificing quality. Netcare was one of the first movers in utilizing the Private-Public Partnership in running its operations which gave it a strategic advantage. Furthermore, Netcare learned the hard lesson from Rwanda when it chose to send South African specialists to England instead of the English patients flying to South Africa since most of those people havent traveled outside their villages. This decision was more feasible to the English market. Over the years, Netcare has built a reputation and brand identity in the health care industry that would able it to expand across the continents.
Unlike any other industry, there are many elements that impact the health care industry. Health care differs from other goods and services in some important ways. The output of a shoe factory is shoes; but the output of the health care industry is less defined, unpredictable, and imperfectly understood by producers as well as consumers. Not to mention that the healthcare services remain in demand regardless of the economic cycle. The health care industry and the nature of its products and services affect the way in which companies operate; how about to internationally expand; for example, the political environment, economic risks and regulatory constraints in countries around the world. Which exactly what happened to Netcare when expanding to Rwanda; the company failed to realize the social and political differences between operating in South Africa and Rwanda that accordingly led to a huge failure.
The changes which take place in public healthcare systems also affects the operating and expanding strategies of such companies. Netcares growth through its public-private partnership strategy paved the way for it to become international service provider in South Africa and surrounding markets. The international expansion to UK by Netcare was achievable after identifying an attractive international opportunity of the fragile situation of the Health Care in UK. Netcare used a global strategy