Accenture Strategy The

Strategists League
Submitted by
TEAM : TEAM_NAME
Lakshay Sahni (2014PGP179)
Mahesh Narayanan (2014PGP190)
Prateek Baliya (2014PGP265)
1

Understanding Alcos Problems

Increasing demand for more value in terms of product features and

consumers desire for greater customization via digital media
Alcos Perceived Problems:
Increased Customization Requirements in the context of stable Supply-side
Dynamics:
Greater consumer demand for increased value in terms of more product features imposes pressure on an
industry where strong relations with channel intermediaries is a major factor in realizing sales targets.
Need to equip suppliers and other intermediaries with the same customized service capabilities as the
Auto manufacturer for better serving consumer needs

Transition to Digital Service Capabilities:

Transition involves providing consumer services such as customer accounts, digital view of customized
purchase, online service catalogue and order placement, at-home service options, digitized billing,
promotional offers for increased use of manufacturer digital space, etc.
Development of necessary digital infrastructure to facilitate above mentioned services and reliable CRM
system to capture consumer demands effectively.
Finding the middle-ground between build-to-order channel to meet increased customization needs and
existing channels.
Mitigating potential channel conflicts arising from above long-term channel decision.
Leverage the digital space to increase consumer touch-points and promote new value offerings and
differentiated capabilities
Training of personnel and intermediaries towards usage of new systems and sales methods.

Potential Operational changes:

Road Ahead: Approach to solve Alcos Problems

Customization in
Peripheral
Products
Digitization of Customer
Service Activities

Digitization of customer activities like ordering and billing

Digitization of manufacturer activities to streamline Procurement,
Process Activities and Inventory Management in real time

Value Chain Digitization

Customization for consumer groups to facilitate better offerings

Mass Customization

Equipping suppliers with latest technology to ensure seamless

integration with manufacturers for better customer offering

Supplier Competency
Development

Complementary add on features like power windows, alloy wheels,

hoods etc

Placement of service order online and offering service based on

requirements including an at home-option of servicing
3

Assessing Financial Performance

The financial performance of Fortis has improved drastically in FY-13

ROA (%)
ROCE (%)
PAT Margin (%)
Fixed Capital/Sales
Receivable days
Payable days
Total Debt/Equity
Current Ratio

FY'11

FY'12

-4%
2%
-11.38%
2.31
27.86
90.92
1.91
0.26

0%
6%
0.29%
1.93
27.34
88.79
1.62
0.39

FY'13
31%
62%
58.88%
1.36
28.23
106.53
0.1
1.83

Parameters to assess financial performance:

Both ROA and ROCE have improved drastically over the 3 years indicating higher earnings generated from invested capital
The dramatic increase in profit margin in FY13 is due to:
A onetime gain arising from the business trust transaction
The adoption of an asset light model was a path-breaking innovation in the healthcare sector, leading to innovative financing route
and a perpetual source of funding to set up our future hospital infrastructure
Increase in Payable days indicates better working capital management, decreasing cash conversion cycle
The decreasing fixed capital/sales ratio shows that more revenue is generated per unit of fixed asset
The decreasing D/E ratio is a sign of decreasing financial risk
The increase in current ratio suggests better liquidity
Source: www.aceanalyser.com, Annual Reports of Fortis Group for FY-11,12 and 13

Future Outlook

Internal and External growth factors signify great market potential for
Fortis
27% CAGR of market size of private
hospitals in India
Market size of Private Hospitals 45
in (USD Billion)
35

30

15.0

Additional 1.8 million beds required by

2025 in India
13.7

Beds per 1,000 population

10.0
6.6

22

5.0

3.0

3.0

2.7

2.3

2.1

0.9

2009

Indian
Healthcare
Sector

Fortis
Healthcare

2010

2011

2012

Large unmet demand

Growth drivers Demographics, Lifestyle related diseases, Insurance, healthcare infrastructure and medical tourism

Only supply side constraints Medical Talent and Capital

One of the largest private healthcare delivery players with a pan India footprint (95% revenues from India)

Strong Brand Equity, focus on Clinical Excellence and Patient Centricity

Wide spectrum of medical programs From womb to Old Age

The only healthcare player in India with a vehicle for pursuing Asset Light growth (Business Trust)

Inherent potential to double bed capacity on an asset light basis

Source : IBEF, August 2013; WHO, World Health Statistics 2013