The Company and Products

Sonic Healthcare Limited operates in Sydney, Australia. It is a medical laboratory company. The company conducts its operations worldwide, as it is also a publicly listed company (listcorp.com, 2020). Established in 1987, Sonic Healthcare has now turned into a parent company. It conducts a range of healthcare practices. It has its healthcare clinics across eight nations and the company has played an influential role in ensuring high-quality healthcare services across various nations such as Germany, Australia, the USA, UK, and so on. The main services at Sonic Healthcare Limited are medical services, general practice, radiology, occupational medicine, and other diagnostic services as well. Due to its established and wide range of services, the company possesses the possibility of further expansion in other nations. Therefore, a VRIO analysis of Sonic Healthcare Limited will outline the possibility of growth and expansion of the company in new markets of Haiti and Israel.

Sonic Healthcare Limited- VRIO analysis

Valuable- One of the valuable resources of the company is its laboratories. The pathology tests are conducted at the laboratories and services such as diagnostic imaging and radiology are its unique services. Apart from services, other valuable resources are financial resources and human resources. The company employs valuable scientific, technical, and medical specialists. Consequently, the service users are satisfied too.

Rare- At Sonic, one of the rarest elements is the relationship shared by doctors and patients. The degree of commitment between the doctor and the patient is high. Due to high commitment levels, the doctors are extremely professional and they deliver unique and high-quality services.

Immitable- It would be challenging for other firms operating in the same industry to imitate the financial and operational capabilities of Sonic Healthcare. The company has earned the capabilities and success by putting a lot of effort over the years. It has managed to generate a profit of nearly A$550 million in 2019 (Investors.sonichealthcare.com, 2020). Similarly, other companies are incapable of imitating the dividend policy of Sonic.

Organised- The Company has gained a competitive advantage by focussing on creating an organised operational department across its various locations. Similarly, another organised department of Sonic is the Research and Development (R&D) department.

Target Countries: Risks and Opportunities

Country: Haiti

• Demographics- The total population of Haiti is 1.11 crores and the life expectancy of people is nearly 63.29 years (un.org, 2020). The population commonly suffers from opportunistic infections, malaria and tuberculosis. The healthcare sector in Haiti is poorly developed.
• Economic situation- As per the World Bank, Haiti is a poor nation and as of 2019, the GDP per capita was $756 (org, 2020). Nearly, six million Haitians are below the poverty line and they live on US$2.41/day. The nation has consistently experienced currency depreciation. Apart from that, the economy has other downside risks because of the COVID-19 pandemic. Nevertheless, new ventures are also starting in Haiti and people are looking for job opportunities.
• Competition- The quality of healthcare is low in Haiti and therefore, there are few medical laboratory companies. Access to proper healthcare is limited in the nation. After the 2010 earthquake, the entire healthcare system in Haiti has devastated (org, 2020). Hence, competition in the healthcare industry is relatively low.
• Political or legal factors- The political crisis in Haiti is yet to be resolved. The nation is also considered as one of the corrupt nations due to increasing political corruption. The democratic institutions are weak, unstable and fragile (org., 2020). Without the U.S foreign aid, it is not possible to uplift the condition of Haiti.
• Cultural forces- The nation is characterised by a big gap between the poor families and the elites. A gap between the middle class and the elites also exists. It can have an impact on new businesses. There are low chances of expanding the business and generating profit from a target group of customers for a long time.

Country: Israel

• Demographics- The total population of the nation as of 2019 is 88.8 lakhs (info, 2020). The life expectancy of people is 82 years.
• Economic situation- The nation has opened new sectors for FDI or Foreign Direct Investment. One of the key drivers of Israel is its financial sector. The leading industries that contribute towards the growth of the economy are transport, financial services and commerce.
• Competition- The healthcare sector in Israel is well advanced and the sector follows the international standards that doctors and other healthcare specialists are bound to follow. The sector has adopted modern technologies and cost-effective procedures (gov, 2020). Simultaneously, the competition among established medical laboratories such as Rosenblatt Medical Lab, Biogal Galed Labs and American Medical Laboratories is high.
• Political or legal factors- The Israeli government is spending a huge amount on new technologies and improving R&D of the healthcare sector. Hence, new opportunities for new businesses in the healthcare sector are present. The nation seems to be playing a significant part in the medical revolution.
• Cultural forces- Israelis consider themselves to possess European and Western values. Hence, the cultural values have been designed in a way that consists of salient features of the Western World. An Israeli business culture exists in the nation and new businesses are supposed to adapt to the technological culture relevant in the nation.

Risk assessment

Country: Haiti

• Political risk- According to the report issued in the World Bank, the rank of Haiti is 181 out of 190 nations in the list of Doing Business (usembassy.gov., 2020). It indicates that high levels of corruption and political instability prevails in the nation. Barriers to foreign investments are another risk of doing business.
• Currency risk- Currency devaluation has a direct impact on the existing business and emerging businesses.
• Economic risk- Haiti’s business environment is challenging. Nevertheless, the government offers incentives in case of foreign investments. The incentives are given in income tax and customs duties. However, the economy slowed down after 2017.
• Property rights risks- The registration process for new properties in Haiti is unclear. The property rights tend to affect new businesses.

Country: Israel

• Political risk- Israel is renowned for its regional instability and political uncertainties. Consistent issues with the Palestine are a major risk factor.
• Currency risk- Israel has been involved in a currency war and it has become one of its disadvantages. Despite loss and damage witnessed in the labour market, the currency of Israel has strengthened over the last few years (org.il. 2020).
• Economic risk- The economy of Israel is strong because the nation depends on imports for energy and food. The government encourages FDI and the GDP growth forecast is nearly 3.3%. Hence, economic risk of doing business is low in Israel.
• Property rights risks- The property registration process in Israel has been simplified and the new regulatory requirements are easy to follow. The registration process has speed up and therefore, Israel has been termed as a “Start-up Nation” (com, 2020).

The analysis reveals that doing business would be less risky than doing business in Haiti. The political, economic and cultural factors in Israel are more business-friendly.

Entry Strategy

The process through which a business organisation enters a new market or foreign market without prior experience is done via an entry strategy. Businesses adopt various techniques to enter a foreign market. The business adopts either the direct export method or the indirect export method. However, in case of Sonic Healthcare, services will be provided to patients and export methods are applicable for businesses that produce goods for customers. Hence, Sonic can use the foreign production strategy to set up clinical laboratories in the capital city of Israel. Pathologists and other specialists from Israel can be recruited and the company can establish its dominion over the laboratory market of Israel.

Entry Plan

• Business finances – The Company should ensure long-term commitment and it has the capacity to invest in Israel because, in 2019, it generated $ 6,184,056 revenue (sonichealthcare.com, 2020).
• Leadership style- The Company should encourage transformational leadership style and training should be given to enhance the management expertise every year.
• Team details- Specialists across radiology, pathology and medical diagnostics will be included in the team. The specialists and staffs from other nations shall be exposed to cultural etiquettes of Israel.
• Services- The service quality will be enhanced. Patient-centred care shall be encouraged. Israel’s healthcare system can be enhanced by minimising medical test errors.

Reference List

export.gov (2020). Available at: https://www.export.gov/apex/article2?id=Israel-Healthcare (Accessed: 20 July 2020).

Fas.org. (2020). Available at: https://fas.org/sgp/crs/row/R45034.pdf (Accessed: 20 July 2020).

Haiti: Much work remains to improve access to healthcare | MSF (2020). Available at: https://www.msf.org/haiti-much-work-remains-improve-access-healthcare (Accessed: 20 July 2020).

Ht.usembassy.gov. (2020) Available at: https://ht.usembassy.gov/wp-content/uploads/sites/100/Haiti_Country-Commercial-Guide.pdf (Accessed: 20 July 2020).

Inss.org.il. (2020) .Available at: https://www.inss.org.il/publication/israel-and-the-global-currency-war/#:~:text=the%20currency%20war.-,While%20Israel%20too%20is%20involved%20in%20this%20currency%20war%2C%20it,over%20the%20past%20two%20years. (Accessed: 20 July 2020).

Investors.sonichealthcare.com. 2020  Available at: https://investors.sonichealthcare.com/FormBuilder/_Resource/_module/T8Ln_c4ibUqyFnnNe9zNRA/docs/Reports/AR/sonic-healthcare-limited-2019-annual-report-online.pdf (Accessed: 8 July 2020).

Investors.sonichealthcare.com. 2020  Available at: https://investors.sonichealthcare.com/FormBuilder/_Resource/_module/T8Ln_c4ibUqyFnnNe9zNRA/docs/Reports/AR/sonic-healthcare-limited-2019-annual-report-online.pdf (Accessed: 8 July 2020).

Israel Demographics 2020 (Population, Age, Sex, Trends) – Worldometer (2020). Available at: https://www.worldometers.info/demographics/israel-demographics/ (Accessed: 20 July 2020).

Overview (2020). Available at: https://www.worldbank.org/en/country/haiti/overview (Accessed: 20 July 2020).

Registering a property in Israel has now been simplified following several regulatory changes (2018). Available at: https://www.globalbankingandfinance.com/registering-a-property-in-israel-has-now-been-simplified-following-several-regulatory-changes/ (Accessed: 20 July 2020).

Sonic Healthcare (ASX:SHL) Share Price, News & Information (2020). Available at: https://www.listcorp.com/asx/shl/sonic-healthcare#about (Accessed: 8 July 2020).

World Population Prospects – Population Division – United Nations (2020). Available at: https://population.un.org/wpp/ (Accessed: 20 July 2020).