Apollo Pharmacy Franchise Model

Introduction

In the '80s Dr. Prathap C Reddy started Apollo Hospital Enterprises Limited, the flagship company of Apollo Hospitals. His desire to produce world-class healthcare installations in India was touched off by an incident that occurred in the late ’70s — A man in his 30s failed of coronary heart complaint because he couldn't pay for a simple coronary bypass surgery. This incident acted as an encouragement for the birth of the Apollo Hospital in Chennai. After original times of struggle, the Hospital established a base in Chennai. Gradationally, the Apollo Group set up more hospitals in Hyderabad, Madurai, New Delhi, Ahmedabad, Kolkata, Pune, Bangalore, etc. moment, Apollo Hospitals are synonymous with commercial healthcare in India. Dr Reddy realized that the cost of healthcare made it unaffordable to the middle class of India; the only system of reducing the cost of healthcare for the common man was thus to promote preventative healthcare. preventative healthcare emphasizes the significance of regular health check-ups rather than using healthcare installations only when necessary. Apollo Health and Lifestyle Limited (AHLL) was incorporated in late 2000 as a result of Dr Reddy’s vision of making quality primary healthcare available as an affordable proposition to people all over the country. After much deliberation, the ballot model was taken as an ideal way to expand the business.

According to a study conducted by Arthur Andersen, it was possible to produce a civil chain of 250 primary healthcare conventions on a ballot base; thus, it was decided to go ahead with the design. Later, AHLL was formed to deliver quality primary health care through a separate identity, called “The Apollo Clinic,” to be launched across India and the neighboring countries. A franchisee enjoys the style of two worlds – as the proprietor of an independent business, he's free to work his entrepreneurial capabilities and knowledge of the original request; also, he has the assurance of service from the franchisor and the confidence that he'll be continuously streamlined about developments in the medical field, where he's a neophyte. A nationally honored brand like Apollo minimizes its business pitfalls while furnishing all the knowledge and moxie needed to successfully run the business. also, being part of a large network, allows the franchisee to offer world-class service without taking to spend a lot of money. He's buying ‘peace of mind.’

Market Opportunity

As per the study of KSA Technopak on Healthcare Expenditure Trends in India, based on around 10,000 SEC A and B respondents in 20 cities, as it were 32% of the normal family consumption of healthcare is on account of hospitalization, the rest accounted for by domiciliary healthcare. A later report by CII-McKinsey, Healthcare in India, proves it by showing that 61% of private investing in India is in outpatient care. It sets up that this section speaks to the bigger cut of the healthcare trade. This day-to-day healthcare portion comprises three major constituents: consultation (with family doctors, masters, or super-specialists), diagnostics (extending from scheduled lab tests to ultrasound), and drug stores (for drugs). Right now, the supplier arranged for such administrations, indeed in expansive cities, is greatly divided, unorganized, and unbranded. The non-appearance of accreditation standards or quality controls has come about in an ineffectively controlled bungalow industry-like environment. The day-to-day healthcare (visits to the family specialist, research facility tests, etc.) advertisement is not organized. There are no characterized measures of benefit and no exacting directions. Quality parameters are not characterized. In this way, exceptionally frequently, a blood test taken in two diverse clinics yields distinctive results.

Selection of Franchisees

The process of selection of franchisees regularly begins with notices in national or territorial daily papers seeking search for franchisees. Promotions are taken after a survey of applications from potential franchisees. Franchisees are at first short-listed based on the taking after criteria:

·         their foundation, counting entrepreneurial interface

·         their budgetary qualities and capacity to contribute.

Short-listed candidates are called for a meeting where they are displayed with the subtle elements of the establishment demonstrated contained in a brochure approximately the Clinic, a compilation of past victory stories (created afterward), and a point-by-point budgetary arrangement for an ordinary clinic. Potential franchisees are empowered to ask questions and look for clarification. Finalization of the candidates is a two-stage handle – in the to begin with arrange, all data is made accessible to the candidates, and in the moment arranged, they are met by a senior board from AHLL, who survey their capacity to run an establishment.

Conclusion

According to Mr. Jalan, ‘We have witnessed in quite a numerous case that the franchisees anticipate that the brand should induce ‘automatic’ returns on their investment. It's a manifestation of the larger Indian reality, which is characterized, more constantly than not, by the owner’s disinclination to get his hands dirty and the proverbial rent-seeking gesture.” As a result, not all conventions have shown the same deal characteristics. While some of the conventions are remarkably successful, others have sagged in terms of deals and profitability. As a business model, AHLL demanded to set up nearly 250 conventions five times. still, only about 50 conventions were functional by 2006. As a result, AHLL was still largely dependent upon the original licensing figure from the franchisees for its operations. Some of the conventions that had signed up in the original phase were approaching the time for renewal of the contract. Mr. Jalan was wondering whether AHLL should renew the franchisees or allow the agreements to lapse.