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Business Models for Diversification into Healthcare 

  • February 2016
  • 71 pages
  • Frost & Sullivan
Report ID: 3691049

Summary

Table of Contents

Business Models for Diversification into Healthcare : Focus of Business Models Expanding from Chemicals and Materials to Healthcare

Successful healthcare business models have evolved to increasingly focus on building customer excellence—both product and processes are important for a company’s business model to be successful. While a product provides the base, the process becomes very important for the good execution of the product and also to provide value to customers for repeat business. The objective of the research service is to identify business models which have been used by leading companies globally to successfully enter healthcare. The companies that have had chemicals, materials, and related industries as their core business have been analysed in this study.

Key Findings

Successful healthcare business models have evolved to increasingly focus on building customer excellence—both product and process are important for companies’ business models to be successful. While a product provides the base, the process is also very important for good execution of the product and to provide value to customers for repeat business.

- Healthcare markets are more stable and tend to compensate for business cycle fluctuations; hence, they provide companies opportunities for diversification.

- Healthcare markets are more resilient and a number of companies have experienced growth (both top and bottom line) during recession.

- Diversification into healthcare is an important strategic move for companies to ensure business sustainability—all diversified companies have expanded into healthcare, as their core markets were getting saturated or commoditised.

- Investing in healthcare is further justified, as it can enhance lives of people. It also allows the companies to move up the value chain and use their core strengths to develop in an adjacent industry.

The role of a brand in healthcare diversification is another very important aspect. Brand strategy plays a critical role in determining the success and future direction of a company’s diversified healthcare business.

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