BUSINESS STRATEGY in Private Health Industry Malaysia
  1. Porters Five Forces
According to Porter, M.E. (1979) Porter's Five Forces is a framework for industry analysis and business strategy development, this tool is a simple but powerful tool for understanding where power lies in a business situation. It is used to identify whether new products, services or businesses have the potential to be profitable.
This is useful, because it helps you understand both the strength of your current competitive position, and the strength of a position you're considering moving into. With a clear understanding of where power lies, you can take fair advantage of a situation of strength, improve a situation of weakness, and avoid taking wrong steps. This makes it an important part of your planning toolkit.

In Malaysia Healthcare Private Industry, the Porter Five Forces can be analyzed as follows:

i)Bargaining power of customers: this includes working people and insurance companies. This industry is relatively unaffected by buyer power in a sense that the healthcare industry is composed of all the companies involved in providing healthcare to people, whether the economy is good or bad it doesn’t really affect the choice of buyers to consume or not consume health care, people cannot choose to be healthy in times of bad economy, they get sick independent of the economy

ii)Bargaining power of suppliers: the suppliers for this industry can include IT vendors, office suppliers and pharmaceutical companies, In such industry suppliers are interacting with the industry itself, drug companies supply medicine to hospitals and hospitals to patients.

iii)Threat of new entrants : the new entrants in this field can include new freestanding facilities, ambulatory surgical centers, barriers in this are fairly high, the biggest being cash investment (monetary funds) firms must be willing to risk large amounts of money with the likely possibility of no return to open up hospitals. There has been few entrants to the industry because its expensive to start up a firm, hospitals are regulated by the government

iv)The threat of substitute products: the substitute products/services for this industry are quite minimal, it may apply to maybe traditional medicine(Chinese medicine and acupuncture)
v)Level of competition in an industry : level of competition with hospitals has to do with who is going to offer the best care for a certain illness and charge less; also, the ntensity due to drug discovery, sometimes for hospitals the competition is it is less due to the fact that they are few and people tend to go to the nearest hospital when they fall sick so there is no price competition between hospitals and hence very little competitive rivalry

STEEP Analysis
According to MBA Boost - STEEP Analysis, A STEEP analysis is a tool to evaluate various external factors impacting a business or organization down turns in the economy, and a lack of investment in innovation can have a significant impact on a firm's strategic options. To obtain a better glance of how these factors will affect the planning process, analysts can utilize the STEEP analysis tool.
This tool is mainly to furnish decision makers for improvement of existing strategic planning; it involves factors like Social, Technological, Environmental, Economical and Political. The following table summarizes these factors in the Malaysia Private Sector Healthcare Industry.

SWOT Analysis

The following SWOT analysis will focus on identifying and evaluating external environment of internal organizational factors that have direct or indirectly impact on the organization performance. Sunway Medical Centre need to analyse the opportunities and threats which emerged from external environment, as well as internal organization’s strength and weakness in order to formulate a strategic plan according to these changes

Strength is an inherent capacity which an organization can use to gain strategic advantage. For Sunway Medical Centre the following are the strenghts
Being one of the subsidiary companies in SUNWAY GROUP, Malaysia’s most widely recognized and diversified conglomerates with a multitude of established businesses, Sunway Medical Centre have strength derived from its parental company’s perceptive and transparent policies and visionary leadership, as well as financial stability for future development. Sunway Medical Centre is well known recognized brand name in property, construction and leisure sectors. Sunway Medical Centre is directly benefited from this by delivering same level of quality services as its sister companies.
The successes of SUNWAY GROUP came from their visionary leadership management and perceptive corporate policies. Sunway Medical Centre is definitely inherited the good management approaches and corporate policies into their organization management; this will be their major strength in management. Malaysian Society for Quality Health (MSQH) accredited private hospital certification in process and medical testing standard in patient safety, Asia Hospital Management Award.
Sunway Medical Centre also have advantage of wide marketing chains network from its sister companies, e.g Healthcare Tourism both Sunway Group’s leisure and entertainment sector may be inter-related and complimenting each other. Also in research and development the hospital is affiliated to Tan Sri Jeffrey School of Medicine and Monash University Malaysia. This is one of the strength not only in medical research and development, but also provided the medical human resources needs where most of private hospitals are facing the human resources shortages.

A weakness is an inherent limitation or constraint which creates strategic disadvantages.
The weaknesses in Sunway Medical Centre are as follows:
  1. Being a single location hospital, the hospital is getting the potential patients nearby as compare to other hospitals like Kumpulan Perubatan Johor and Pantai Group which have many hospitals covering most strategic cities in Malaysia, this is more critical in terms of patients when other specialist hospitals nearby try to capture same area.
  2. Sunway Medical Centre have a weakness in offering comprehensive range of medical services when compared to Kumpulan Perubatan Johor and Pantai Group, the ratio of doctors and patients is low, the hospital is facing shortage of medical personals especially the highly experience medical specialists.

An opportunity is a favorable condition in the service industry which enables it to consolidate and strengthen its position. The following are opportunities that Sunway Medical Centre possesses:
  1. Current global economic downturn has made people in developed countries like USA and UK to seek for affordable low healthcare in developing countries like Malaysia. Medical tourism is growing globally. According to the report from Association of Private Hospital Malaysia, the revenue from health tourism increased by 30% from 2000 to 2007, the increase in income has improve life quality and private hospitals like Sunway Medical Centre is may benefit to capture this business segment.
  2. Changing in life style causes growth in spending on healthcare, this is due to urbanized fast food which causes obesity problem as well as increasing number of smokers, this leads to disease like cancer, diabetes, high blood pressure and hearth related diseases.


A threat is an unfavorable condition in the industry’s environment which creates a risk for, or causes damage to, the industry. In relation to Sunway Medical Centre the threats are:
  1. The global economic downturn has led to decline in purchasing power, this indirectly affects patients from seeking medical treatment in private hospitals like Sunway Medical Centre instead they prefer government hospital. The hospital may notice lower patience admission and increasing number of hospitals may lower utilization of expensive medical equipments and add up cost to run the hospital.
  2. Lack of qualified doctors and specialists is also a threat, this situation become worse when new private hospitals from oversea are setting up branches in Malaysia, e.g The Columbia Asia Medical Group, during the setting up of other 4 medical branches there was shortage of human resources in medical sector especially experienced doctors, this may become key threat for Sunway Medical Centre

EuropaBio (ed.), Biotechnology in Europe: 2005 comparative study, Lyon, BioVision, April 2005, available at (2.2Mb). European Federation of Pharmaceutical Industries and Associations (EFPIA) (ed.), The pharmaceutical industry in figures, key data, 2005 update, Brussels, 2005, available at: ( 532 kb). MBA Boost - STEEP Analysis Tool Porter, M.E. (1979) How Competitive Forces Shape Strategy, Harvard business Review, March/April 1979. Sager, B., ‘Scenarios on the future of biotechnology’, Technological Forecasting & Social Change, Vol. 68, No. 2, October 2001, pp. 109-29.