Healthway Medical Corporation Limited Case Study

Executive Summary

Healthway Medical Corporation Limited is a leading private healthcare provider with one of the largest networks of medical centres and clinics in Singapore and with a fast developing network in Shanghai, China.

The purpose of this report is to analyse Healthway’s competitive strategies and financial performance in the primary healthcare service segment, as well as devise a balanced scorecard to address the challenges faced for the overall goal of creating value for the firm.

The report looks at the highly competitive primary healthcare industry in Singapore and how Healthway has stayed competitive by adopting competitive strategies.

This report analyses the group’s financial performance in 2010 and 2011 in comparison with its historical data and one close competitor, Raffles Medical Group, using selected financial ratios. This report also examines the fluctuations in Healthway’s financial ratios.

A balanced scorecard is devised to help Healthway Medical achieve its goal of value creation. The report identifies a set of strategic objectives that addresses the challenges faced, along with appropriate performance indicators to translate the vision into terms that is meaningful for, and can be applied by, people who would realize that vision.

We have concluded that Healthway Medical’s overall performance deteriorated in 2011 as compared to 2010. However, Healthway Medical has potential to grow in the near future from its expansion plans both locally and overseas.

1. The current competitive environment of primary healthcare in Singapore

1.1 Industry Overview

Primary healthcare involves the provision of primary medical treatment, preventive healthcare and health education.[ Primary Healthcare Service, Ministry of Health. Last accessed: 20 Sept 2012

Available:http://www.moh.gov.sg/content/moh_web/home/our_healthcare_system/Healthcare_Services/Primary_Care.html] This segment contributed to 67.2% of the Healthway Medical Group’s FY11 revenue, and is supported by the increasing demand of the ageing population and rising number of immigrants.[ Healthway Annual Report for financial year ended 31 December 2011. Pg 10. ]

1.2 Threat of New Entrants (Low)

Being large and established, existing private healthcare medical groups achieve Economies of Scale (EOS) by producing large quantities, thus lowering unit cost. Potential entrants would likely lack the capital to construct medical infrastructure as comprehensive as the existing firms. Also, new entrants have to advertise aggressively to establish their brand name in order to compete with existing firms that are able to benefit from years of cultivated brand recognition and established clientele. Additionally, the various licenses required to build clinics, purchase medical devices