Project Analysis

NMC Healthcare

NMC Healthcare is the largest provider of healthcare services in UAE. It mainly has two components of business; NMC Healthcare and NMC Trading. This organization has had a tremendous journey that says it move expand from a one-room clinic in Abu Dhabi to a global healthcare icon over a period of 40 years. Throughout the journey, the organization focused on expanding its capacities and creating new capabilities. This has seen the organization come up with specialized units that deal with multi-specialty care, maternity and fertility, long-term and home-care, operations management and distribution services. The organization boasts a team of over 2000 doctors and has 18000 paramedical and support personnel (NMC Health plc, 2016). The NMC has over 135 healthcare facilities that include hospitals, medical centers, long-term care facilities, surgery units, fertility centeres and home health service providers. 

Organizational structure

The company has two main divisions; the healthcare division and Product distribution and wholesale division.

The Healthcare Division

The healthcare division offers various high quality ad inpatient services across the facilities. These facilities include large specialty hospitals and medical centers that offer care along the care pathway not limited to emergency, short-term health, long-term health, and home care services (NMC Health plc, 2016).

Within this division is also a network of retail pharmacies that mainly deals with pharmaceuticals prescribed by the doctors to the patients either within the vicinity or from the healthcare services. They also deal with a variety of healthcare products supplied by the products and consumables line. In this division, the approach used aims at enhancing the convenience of the patients and raise the revenue levels to the business.

The healthcare division served both the insured and self-paying patients. The largest chunk of revenue to this division is derived from the insured patients. These patients are required to make a co-payment that is a part of the value of service offered to them while a claim for the remainder is made to the insurance companies (NMC Health plc, 2016).

The healthcare division also offers operational and management services to third party owned facilities. For this, the company gets a contracted management fee from the asset owner. The charges, in this case, are connected to a pre-agreed performance metrics that may either include qualitative or quantitative performance measures.

Product Distribution and Wholesale

This division is referred to as the Products and Consumables vertical. It has grown in size to become the largest in UAE. The division deals with a variety of products including pharmaceuticals, FMCG, scientific equipment, and Food. This unit supplies to government entities, pharmacies, and hospital operators. The division has a portfolio of customers in the global and local levels (NMC Health plc, 2016).

The distribution chain is supported by a network of strategically located warehouses and a fleet of delivery vehicles. This enables the timely delivery to the customers. It is important to note that in this division, the pricing is widely regulated by the UAE Ministry of Health.

External Environment

One of the main components is related to the legal aspects of the external environment. In this case, the government regulations come to play here. The pricing of the products under the Pharmaceutical department is highly regulated by the government through the Ministry of Health. The pricing of these products covers the cost of imports, registration and administration fees, credit costs and sometimes the marketing costs. With the regulations put in place, this implies that the mark up for profits margin is not flexible.

Regulations also require that only registered domestic distributors which are locally established company are granted the rights by the customs authority to import products inro the country. This has seen various principle suppliers contract NMC as their distributor. Even with this arrangement, the government puts in place long processing requirement where each brand and product is required to go through the approval and registration process with local authorities. This affects the nature of the contract that NMC enters with this company where it acts as a principal rather than the agent thereby increasing its profits margins.

Technology is another factor in the external environment of NMC Healthcare that has even been considered as a risk factor. In this case, the need to ensure data security has seen the organization spend a lot regarding prevention of a breach that may be caused by either a malicious cyber-attack or unintentional data or systems loss. This has seen the organization install ISO 27001 certified framework for IT policies and controls. The organization has also made a huge investment in a new hospital information system. To prevent the occurrence of such a case, the organization increased rigidity in its processes by putting strict measures on clients’ data and records which may in a way limit the efficiency level that the organization always aims to achieve.

Restructuring plans

The restructuring that I could propose would be in the healthcare division. In this case, the healthcare division that has been mainly concentrated in UAE with fewer endeavours in the global market should see to expand its reach to the global markets. Opportunites that may be available may be in the increased government spending in Abu Dhabi, the introduction of health insurance reforms in Dubai and Oman. It is also worth to note of the privatizations strategy of the healthcare in Saudi Arabia. These are lucrative opportunities that the organization may consider to enhance expansion and diversification. This will require restructuring in the Health division to accommodate for more investments in the global market. The organization may target to establish specialty hubs for various markets. This will allow for specialization and recognition in that new market as the most trusted provider of a certain field.

Challenges in the restructuring plans

One key challenge that faces organization entering the global market is a different set of rules and regulations. In this case, some countries may have rule and regulations hindering the foreign organizations investing in their market. Differences in the macroeconomic conditions may also affect how well this strategy flourishes. It is also worth noting that international relations come to play in determining how well a business will do in a foreign market. A single and untimely event in the international arena may make business conditions very unfavorable for the proliferation of business in some of these industries. Some countries may have specific regulation on the data infrastructure accepted for the healthcare organizations. This may bring issues related to its configurations to the current organization’s data network and infrastructure.

References

NMC Health plc. (2016). Annual Report and Accounts 2016: Strong Operational Performance.