Medical Tourism In India: A Proposal

Medical Tourism In India: A Proposal Medical tourism- the concept of traveling far and wide for better medical treatment is not a novel idea, only the term. The globalization of the health care sector and the massive demand for low cost-high quality treatment in recent times has caught the attention of many developing countries that have the adequate resources and potential to meet these demands. The profitability and the lucrative nature of the medical tourism business has now put this trade, high on the agenda of both the Indian government and the private health care providers. Today, medical tourism has become a commonplace practice with a large number of people around the world since usual constraints like language, finance, difficulties in global travel and fear of the unknown are no longer acting as barriers to the tourists who seek medical treatment in foreign countries. Countries like India, Singapore, Malaysia etc have developed strategies specifically with the aim of tackling such issues and rendering themselves as the ideal medical tourism destinations. Although India is emerging as the hot-spot medical tourism destinations within the Asia-Pacific and other regions of the world, it seems to be facing tough competition from other big players of this industry who have projected an equally good reputation for themselves and are reaping the benefits of this business. Therefore, it is imperative for India to continuously rethink and reform its marketing strategies to gain competitive advantage and increase its market share in the health care sector. It is an undisputed fact that medical tourism is a rapidly growing industry and creating inroads into the Indian economy. There are a large number of stake holders in this industry in South East Asia including countries like Singapore and Malaysia. There are various marketing strategies being used for propagating this industry. My endeavor would be to seek the gaps that exist and suggest remedial action. Being from the medical fraternity and having had the opportunity to treat a number of overseas patients, the concept of medical tourism has generated a great deal of interest in me. I believe that there are some deficiencies in the marketing strategies for health tourism in India that need to be looked into and improvised. The aim of my research would be to propose marketing strategies that would boost the Indian Medical Tourism for the future. 3. Preliminary review of literature There are three sections of the literature review:- i) Historical aspects- inception and evolution ii) Medical tourism in India- the present scenario iii) Probable concerns and pitfalls of the Indian medical tourism industry. i) Historical aspects- inception and evolution The concept of constructing health complexes around hot springs goes back to as old as the Sumerian civilization (circa 4000BC) where health care facilities comprised of grand elevated buildings with flowing pools. The hill tribes of Switzerland of the area presently know as St. Moritz, during the Bronze Age (circa 2000 BC) recognized the benefits of bathing and drinking in iron-rich mineral springs. The discovery of bronze drinking cups used by them in thermal springs in Germany and France possibly signifies health pilgrimages within these cultures. As per written historical accounts, bathing and healing complexes were erected around therapeutic springs in Mesopotamia, India, Greece and China. The concept of medical tourism emanated as trips to sacred baths and hot springs. However, it is the Greeks who have to be given the credit for laying the foundations for medical tourism networks. Greek medical tourism. Asclepius was considered to be the god of medicine according to Greek mythology. In his honor, Asclepian healing temples had been constructed throughout Greece by the 4th Century BC. These temples were established near the mineral springs which were considered to be the prime Healthful Locations. The system of medical tourism during this period was as follows:- Patients and their attendants came to Asclepia temples seeking treatment for various ailments. At Epidaurus, the port temple, treatment included gymnasia, palaestra (exercise area), bathing springs and a dream temple. There was a retinue of priests, caretakers and stretcher carriers who attended to the patients before they were granted final appointment with the mighty priest. Patients made sacrificial offerings according to their status- the poor left shoes; Alexander the Great left his breastplate. Roman Medical Tourism. The hallmark of ancient Roman medical tourism centered around hot water baths called Thermae. These centers of medical treatment were posh establishments. Some of these centers comprised of art galleries conference halls, theatres and sometimes sport stadia. Because of the active trade with Asia, the Roman baths augmented medical tourism activities like Chinese medicine, Ayurvedic massage and various aspects of Buddhist spiritual healing at some Roman Thermae. Japanese Medical Tourism-Onsen. ONSEN means hot mineral springs in Japanese. Medical tourism in Japan centered around these hot mineral springs which were enriched by surrounding volcanic soil. It attracted a variety of people including hunters, fishermen, farmers and warriors. It was believed that these mineral springs were effective in alleviating pain, healing wounds and recuperation. A thousand years later, this form of medical tourism in Japan is still an ongoing phenomenon. Indian Medical Tourism. India has been the home ground of alternative system of medicine for the past 5000 years. Aspects of medical tourism include yoga, eastern cultural, spiritual and medicinal compilation with meditation thrown in. India has been a Mecca for alternative medicine practitioners. A new boost was given to health tourism in the 1960s with the New Age movement in the US. This New Age movement seeks Universal Truth and the attainment of the highest individual human potential and is characterized by an individual approach to spiritual practices and philosophies and the rejection of religious doctrine and dogma. With this movement, India had once again become the most sought after destination for thousands of western pilgrims. Indias deep commitment to health care infrastructure and technology furthered the mass influx of medical tourists. India is now one of the worlds oldest medical tourism destinations and has gained popularity over the years over other destinations. European Medical Tourism. European medical tourism came into existence with the rediscovery of the Roman baths in the 16th century. With the rediscovery of the Roman baths, Baden Baden , Aachen and most notably Bath, became spa towns. By the 1720s the spa towns came to be frequented by Aristocrats and gentlemen of leisure from other parts of Europe and even royal patronage. Michel Eyquem de Montaigne, French royal inventor of the essay was the most noteworthy medical tourist of this time. He traversed the continent for 9 years for the cure of his gall bladder problem. He is widely believed to be the father of luxury travel and has helped to write one of the earliest documented spa guides for European tourists. Health Tourism-New world. English and Dutch colonists in the 1600s, constructed log cabins near mineral springs in the newly discovered Americas. By 19th century the American reformists made it a habit to travel to remote Western springs that were rich in medicinal properties. Today, there are no physical, economical and cultural barriers that separate nations from one another. Coupled with the flattening global economy, ease of international travel and lenient trade policies has opened the vistas of medical tourism destinations around the globe. This has made affordable health care availability to patients who find it difficult or impossible to access such health care facilities in their own countries. Inflated health care costs are driving the patients to medical tourism destinations like Thailand and India for sophisticated procedures at a fraction of the price. Long waiting periods for medical treatment is another factor that is making patients seek treatment abroad. Also, lack of comprehensive medical insurance has attracted thousands of patients to seek treatment abroad. Medical tourism today has become a global phenomenon with many countries expanding their offerings, including unique tourism opportunities for example South Africa is promoting medical safari in a big way. ii.) MEDICAL TOURISM IN INDIA-the present scenario Medical Tourism India or Health Tourism India is a developing concept that has gained tremendous popularity and is attracting people from all over the world for their medical and relaxation needs. The treatments most commonly include knee transplant, cosmetic treatment, dental treatment and cardiac surgery. India is now a favorable medical tourism destination as its infrastructure and technology are at par with USA, UK and Europe, enabling it to provide treatment centers and hospitals that are best in the world with world class facilities. These factors coupled with visits to some of the most alluring and awe-inspiring places of the world have brought about the merging of tourism with medication giving rise to the concept of Medical Tourism. India is promoting health tourism through depicting the high-tech healing of its private healthcare sector. The Indian government is marketing the concept of traveling to India for cheaper and world-class medical facilities to foreigners, with the intention of encouraging the growing Indian medical tourism industry. The policy of the Indian government to merge medical expertise and tourism was announced during the 2003-04 budgets when the finance minister Jaswant Singh propounded India to become a Global Health Destination. According to a study conducted by Confederation of Indian Industry (CII), the field is so lucrative that it has the potential to become a $2.3 billion business by 2012. Around 150,000 foreigners visited India for treatment during 2004 and since then, this number has increased by 15% every year. In recent times, India has emerged as the Global Health Destination due to the following advantages: 1. Medical services are provided at almost 30% lower cost than the Western countries and are the cheapest in South-east Asia. 2. India has a large population of doctors and paramedical staff who have good knowledge of spoken English. Therefore language is a major comfort factor that attracts so many foreign tourists to visit for the purpose of medical and health tourism making it easier for overseas patients to relate well to Indian doctors. 3. Indian doctors expertise in various surgical procedures including cardiac surgeries, liver transplants, orthopedic surgeries and other medical treatments. 4. Indian hospitals offer a wide array of high quality treatment procedures comprising of joint replacements, cardiothoracic surgery, dental care, cosmetic treatments and more. iii) Probable concerns and pitfalls of Indian medical tourism industry Review of literature suggests the following concerns that need attention if one has to augment and boost the medical tourism sector. Concerns of the consumers Some of the consumers feel that India is unhygienic, polluted and bureaucratic. There is no appropriate accreditation system for the hospitals. Concerns about medical insurance which is underdeveloped, inadequate and has few global players. overseas companies refuse reimbursements. There are also concerns about terrorism, communal unrest and bad connectivity between cities and towns. While some of these concerns are genuine, most of them are mere perceptions. Concerns of the promoters From the promoters point of view, the concerns that have emerged revolve around lack of regulations concerning ethics and systemic support, lack of infrastructure deficiencies like electricity, power supply and water, inadequate land reforms, taxation anomalies, funding constraints, implementation lacunae and bureaucratic bottlenecks. 4. RESEARCH QUESTIONS AND OBJECTIVES. India seems to be an emerging medical tourism destination offering great opportunities in terms of creating new jobs and generating sources of revenue for the Indian economy. It is therefore imperative that the impetus gained so far should not be jeopardized and measures should be adopted to improve the present situation by developing and implementing new strategies. Research questions 1. What is the present state of Indian medical tourism? indicating assessment of the present situation. 2. What are the drawbacks or felt impediments of the medical tourism trade sector? indicating an analytical structuring of the data. 3. What are the ways to improve medical tourism in India through better marketing strategies? an assessment of the lacunae in the existing marketing strategies. 4. Is the government doing enough to support the medical tourism industry? an assessment of the governmental leaning towards the industry. Research objectives 1. To develop pragmatic marketing strategies for health care institutions involved in medical tourism in India. 2. To assess the impact of the government action on the present marketing strategies for foreign patients. 3. To make a marketing plan model for the Health tourism industry in India 5. RESEARCH PLAN Research perspective My research approach is based upon the words of the renowned anthropologist Clifford Geertz man is an animal suspended in webs of significance he himself has spun. I take culture to be these webs, and the analysis of it is not to be an experimental science in search of law but an interpretive one inn search of meaning (Jewell,S.2010). It therefore forms an interpretivist approach. Since the medical tourism industry is a business and management perspective, any research into this field would fall into the gamut of positivist and interpretivist approaches. My research is essentially a qualitative one since my data collection is mainly secondary in nature. Furthermore, my research is theory forming where in I shall be using the inductive approach to analyze the data. My research also involves the assessment of factors of concern that are related to the health tourism industry of India. It would be my effort to sift out the relevant factors and analyze them from the point of view of deve loping marketing strategies. Research design The approach that best answers my research questions fits into the modified cross sectional design. Here, the research design revolves around the collection of data that is occurring naturally over a designated period. My research design also involves mainly quantitative data and some qualitative data too. My research is based upon observation and document analysis. The cross sectional design also gives information on aspects of who, what, how many, where, and the how and why. Data collection methods I shall be collecting my data through analysis of secondary data. I also intend to submit questionnaires to the stakeholders and the major players of the medical tourism in India with the aim of seeking relevant data that would help me in answering my research questions and fulfill my research objectives. Secondary data: the secondary data would be collected through the following; Written materials- various websites, websites of homepages of key players, magazines and journals, books and publications. I would also be looking for government publications, laws and acts related to this subject. Non-written materials- media, television etc. Most of the data from outside the individual organization will yield information about the medical tourism industry. While, data that is collected from the organizational websites would give information on how things are done within the organization and their modus operandi. ii. Questionnaires: I will be sending the questionnaires to all the major players in the Indian medical tourism industry. The questionnaires will be used to obtain data for quantitative analysis in order to assess the functioning of various medical tourism facilities in India. The idea of using questionnaires is that a large quantity of data can be made available covering a wide range of database for quantitative analysis. A good amount of objectivity can be incorporated and the results would be of valid and reliable nature. Analysis of data Having collected all the qualitative and quantitative data, I would subject it to appropriate analysis and apply relevant statistical tests of significance to ensure that the results are valid, reliable and give a reasonable level of generalisabilty. I aim to deduce the relevant marketing strategies being used and to assess their impact on the industry. I shall be presenting the analyzed data in the form pie diagrams, bar charts and other forms of statistical presentations. LIMITATIONS Validity and reliability Since my data is mainly secondary in nature it is presumed that global players in the me dical tourism industry would not putting false data to propagate their business ventures. From this point of view my data would be valid as well as reliable. As my data is being collected from internet, websites of various stake holders, magazines etc. I am confident that stake holders at this level of global competitiveness would not be putting up false data or information for promotional activities that could jeopardize their reputation. However, the limitations of validity and reliability I foresee to come across would be from the questionnaires I would be sending to the stake holders. The disadvantage I feel I would face using the questionnaires is that some people may not respond, may take a long time for returning back and the response rate cannot be predicted. However despite these limitations, I expect to be able to generate valid information and data for quantitative analysis. I shall be sending these questionnaires to the concerned stakeholders through their homepages and their websites and try and elicit as much response as possible from them. Generalisabilty My research design is based upon the study of an industry and does not impinge upon a case study research. All factors being studied can be considered as offshoots of a single industry. For e.g. the legislation aspects would be covering the entire industry and not a single institution or a hospital. Secondly, my aim is to give broad based generalized guide lines on the recommendations for improving medical tourism in India. My attempt therefore would be to collect and analyze data from where generalisabilty can be achieved. ETHICAL CONSIDERATIONS I will abide by the Coventry University BES ethical guidelines. I will conduct my research honestly and present all the data accurately. I will get the low risk approval form signed by my supervisor to get his approval before I begin my research. I shall take all precaution to ensure and respect the rights and integrity of subjects if any. I shall treat all the data confidentially and would ensure that it would not be used for any other purpose other than that intended. Since my data collection is mainly secondary in nature, my research work is considered to be a low risk from the ethical point of view. I shall keep all the raw information on ethics and the data collected for audit purposes. PLAGIARISM I will paraphrase; reference and cite the sources used by me, to acknowledge the work of others and avoid any sort of plagiarism. Michael Porter: Impact of Strategic Management Theory Michael Porter: Impact of Strategic Management Theory The field of strategic management is complex and multi-faceted. Strategic management has been defined in many different ways. The basic tenet of the Positioning School is that strategies are generic positions in a competitive marketplace and are based on analysis by a consulting firm. Michael Porter, indisputably one of the most influential thinkers on management and competitiveness in the world laid the groundwork for strategic positioning in 1980 with his book Competitive Strategy in which he presented his Five Forces model. His 1985, work, Competitive Advantage, described his activity-based view and introduced his Value Chain model. Since the publication of these influential works, their popularity has continued due to their general applicability and ease of use. Keywords: Michael Porter, strategic management, Five Forces Model, Value Chain Model, Porter, Positioning School. The Influence of Michael Porter The field of strategic management is complex and multi-faceted. Numerous definitions have been proposed in an attempt to prescribe the essential elements of management strategy and to discover a methodology to satisfy once and for all the needs of managers seeking to maximize their organizations potential in the dog-eat-dog business world. Strategic management has been defined in many different ways based on the organizations mission, policies, sector, structure, objectives, strengths, weaknesses, opportunities, threats, key success factors or decisions, capabilities, planning, implementation, and sustainable competitive advantage (Sadler, 2003). Generally, strategic management is the means by which organizational managers seek to bolster the success of their businesses via a series of competitive maneuvers. Such maneuvers may be taken with regard to the external environment in which the firm is currently operating or in relation to the organizations internal capabilities (or inabilities) (Sadler, 2003). Mintzberg, Ahlstrand and Lampel (as cited in Sadler, 2003, p. 15) developed a method of organizing these numerous schools of thought into three major groups labeled the Prescriptive, Descriptive, and Configurational Schools. The Descriptive group consists of those schools which seek to describe strategic management in terms of how it is formed in practice. The Configurational group encompasses one single school of thought which has two facets, the first seeking to describe the organizations state and context, and the second endeavoring to depict the strategy-making process. The Prescriptive Group is composed of those schools which venture to define strategic management in terms of how it should be formulated, as opposed to how it is formed in practice (see Descriptive Schools above). Within the Prescriptive group reside the design, planning, and positioning schools. The design school seeks to define strategic management as a conceptual process, and the most recent manifestation of this approach is the SWOT (strengths, weaknesses, opportunities, and threats) Analysis, developed by Ken Andrews in the early 70s. SWOT analysis aims to analyze the firm in terms of internal factors strengths and weaknesses, and external environmental factors opportunities and threats, in order to gain a competitive advantage. The planning school, on the other hand, focuses primarily on the future and has as its principal goal the formulation of decisions and actions that will guide the organizations actions and define its purpose. Michael Porters seminal and best-known work, Competitive Strategy, laid the foundation of the positioning school. The basic tenet of this school is that strategies are generic positions in a competitive marketplace and are based on analysis by a consulting firm. A renowned business management theorist and commonly recognized as the father of modern management theory, Porter is a respected professor holding the prestigious Bishop William Lawrence University Professorship at Harvard Business School. He is a prolific author; since 1976, he has written some 18 books and more than 125 articles on competition and strategy. Porter has advised management in numerous U.S. and international companies and governments worldwide and has won many honors and awards for his work in economics and strategic management theory. Michael Porter is indisputably one of the most influential thinkers on management and competitiveness in the world. Michael Porters Theories Porter is best known for the prescient theories illuminated in his 1980 work Competitive Strategy: Techniques for Analyzing Industries and Competitors. The hallmark of Porters works, Competitive Strategy presented Porters five forces model, five elements that affect an industrys profitability, and his generic strategies which are intended to counter those forces. In his follow-up piece, The Competitive Advantage: Creating and Sustaining Superior Performance, published in 1985, Porter developed his Value Chain Model, a framework for activity-based competitive analysis of a firm. Porters Five Forces Model Porters five forces are classified as industry-level (vice organizational-level) determinants of long-term profitability in an industry. These economic and technical characteristics are said to be foundational, key factors to industry success and affect such critical industry elements as prices, the degree of investment necessary for competitiveness, market share, potential profits, and profit margins, and industry volume (Childress Kirkwood, 2006). The five forces are industry competitors, pressure from substitute products, bargaining power of suppliers, bargaining power of buyers, and potential entrants. These five forces acting in unison comprise the competitive environment in which the firm must operate. The nature of competition within the industry is affected by factors such as the size of competitors the number of competitors, changes in demand for products, asset specificity, the strength of exit barriers and competitor variety and is generally considered to be the most powerful force. Competitive tactics employed by one firm may affect the entire industry (Mayo, Grigoroudis and Zopoundis, 2006). Pressure from substitute products affects the industry by imposing an artificial price ceiling. Decreases in customer switching costs and increases in the price of substitute products are causes of competitive pressure. The threat of substitutes varies inversely to the price of substitute products and consumers switching costs (Mayo, Grigoroudis and Zopoundis, 2006). The bargaining power of suppliers affects competition particularly when there are many, limited substitutes for raw materials exist, or when switching costs increase. When suppliers raise prices, or reduce prices or services or the quality of goods or services, competition intensifies. When suppliers reduce quality or services or increase prices, competition increases (Mayo, Grigoroudis and Zopoundis, 2006). Buyers affect competition when they are able to negotiate lower prices, distribution and quality. The number and concentration of consumers and product differentiation are influences. Switching costs and the power of buyers to backwards integrate are factors as well (Mayo, Grigoroudis and Zopoundis, 2006). High entry (and exit) barriers are a deterrent to companies seeking to enter new industries. New entrants alter the competitive climate by increasing capacity and competition for market share and by adding new resources. Entry barriers may take the form of capital requirements, economies of scale, product differentiation, switching costs, access to distribution channels, cost of promotion and advertising, and so on (Mayo, Grigoroudis and Zopoundis, 2006, p. 835). Porters model is versatile, popular and widely used. From banking to brewing, numerous examples of studies conducted using Porters model to analyze the competitive climate of a variety of industries can be found easily. Several of these are summarized below. Finnish publishing In a study investigating the effect of the internet on the consumer Finnish magazine publishing industry using Porters five forces model (Ellonen, Kuivalainen et al., 2008) conducted semi-structured interviews of eight industry experts. The researchers identified specific examples of some of the forces shaping competition within that industry. They chose Porters model as the vehicle for their analysis because it is a useful tool for examining the industry structure and assists in the analysis of industry competitiveness. They noted that the internet had intensified rivalries among competitors by making proprietary information and that competitors habitually benchmarked each others websites. Financing and support functions were recognized as barriers to entry. As for the treat of substitute products and services, the most significant threat was identified as the internet itself because it offers readers alternative ways to spend their leisure time and their money. Notably, however, neither the bargaining power of buyers (both consumers and advertisers) nor the bargaining power of suppliers was considered a significant hazard. Online banking Smith (2006) studied the online banking industry and, like the authors in the study of the Finnish publishing industry, used Porters five forces model to identify the strategic forces affecting the industry. Smith chose Porters model because it provides clarity, ease of understanding, and is insightful when examining a complicated and complex issue like strategic management. Smith noted that economies of scale and product differentiation, capital requirements, limited distribution channels, and government regulation were substantial barriers to entry in online banking. Conversely, the bargaining power of suppliers is relatively weak as is the bargaining power of buyers, chiefly due to the low-cost or free nature of online banking services. Pressure from substitute products is considerable. Traditional banking offers customers a personal touch and some do feel online services are secure enough. Other substitute products are credit unions, ATMs and other financial institutions and credit card companies. Not surprisingly, Smith found that competition is intense in the online banking industry. This is largely due to the increasing popularity of computers the internet with each successive generation and the cost savings gained from using online services. European beer Niederhut-Bollmann and Theuvsen (2008), in yet another example of the versatility of Porters model, analyzed the dynamic competitive environment of the European (German and Croatian) brewing industry. Niederhut-Bollmann and Theuvsen chose Porters model, they say, because it is powerful, thorough, and provides a flexible framework for this type of analysis. The authors of this study provided a detailed look at the competitive forces affecting both the German and Croatian brewing industries. Moreover, they offered an extensive analysis of the generic strategies which various breweries had adapted in order to position themselves in the face of the industrys competitive pressures. Porters Generic Strategies Porter postulated three generic or broad alternative strategies which may be pursued as a response to the competitive pressures. They are termed generic strategies because they are broadly applicable to any industry or business. They are differentiation, cost leadership, and focus. A focus strategy may be further defined as cost focus, differentiation focus, or cost and differentiation focus (Ormanidhi Stringa, 2009). A differentiation strategy may be based on actual unique product features or the perception thereof, conveyed through the use of advertising and marketing tactics, in the eyes customers. Obviously, the product or service feature must be one the customer needs or desires. Moreover, such enhanced features and designs or advertising and marketing will increase costs, and customers must be price-insensitive willing to pay for the differentiated product or service. This willingness to pay for the differentiated product of service is what provides the company relief from competitive pressure, cost pressure specifically. Firms pursuing a cost leadership strategy must make lower production and distribution costs their priority (Thomas, J., 2006). By keeping their cost lowers than those of their competitors, firms using cost leadership can still price their products up to the level of their competitors and still maintain higher gross profit margins. Alternatively, these firms can price their products lower than those of their competitors in the hope of achieving greater market share and sales volume at the expense of gross profit margins (Thomas, J., 2006). A focus strategy is based on a particular market, customer, product, or geographic. A Focus strategy is a concentrated, narrowly focused niche strategy (Mayo, D., Grigoroudis, E. Zopoundis, C., 2006). It will normally be employed by smaller companies or small target markets. Products and services may be customized to the extent that customers are allowed input throughout all stages of production. European brewing In the case of European breweries mentioned above, Niederhut-Bollmann and Theuvsen (2008) noted that one German brewer used a cost leadership strategy to undercut larger competitors prices by as much as 50 percent. Another brewer used national brands to increase customer loyalty in a differentiation strategy. Klosterbrauerei Neuzelle, founded in 1589, uses traditional brewing techniques for a small local market, a focus strategy. The authors note that although Porter, in his original work, warned that a firm should choose one specific strategy, he later (2001) accepted that a hybrid strategy (lower operating costs and premium prices) may be appropriate. Japanese industry Allen, Helms, Takeda, White, (2007) studied the use of Porters generic strategies in Japanese firms. According to the authors, the traditional style of Japanese management in which all employees of a company share risks and gains of the operation; layoffs are a last resort, even during economic crises; and lifetime employment with a single company is expected, is often cited as a primary cause of the ongoing Japanese recession (p. 70). Recently the Japanese government implemented the Porter Prize in an attempt to spur improvement in the competitiveness of Japanese industry. Several small and medium-sized forms have received the prize presumably due to their strategy of operating in niche markets, a focus strategy. Larger corporations, those who operate under the keiretsu, or lineage system have not substantially participated in the program arguably due to the characteristic inability to react to change and over-reliance on a group decision-making style inherent in the keiretsu system. The authors believe that encouraging Japanese firms to vie for the Porter Prize will enable those firms to become accustomed to employing competitive strategies and become more profitable. Michael Porters Five Forces Model is still popular today due to its broad applicability and because it is easy to use. Competitive Strategy laid the foundation for the Positioning School of strategic management philosophy. Porters Five Forces Model and his generic strategies have substantially influenced strategic management thought for the last thirty years and will undoubtedly continue to do so. The Value Chain Model In 1985, Porter followed up and built upon his Competitive Strategy with Competitive Advantage. In Competitive Advantage, Porter developed the concept of a sustainable advantage and introduced his Value Chain Model. Porter referred to his own model as an activity-based view because used the activities of the firm to analyze the organizations competitive advantage. Value, Porter said, was defined as the sum total that a buyer is willing to pay for what the firm produces or delivers and is measured as total revenue or price times the number of units sold. Economically speaking, the firms value must exceed its costs, or it is not considered profitable. Competitive analyses, therefore, must be focused on those value-generating activities which influence the companys costs and provide a means for strategic differentiation (Patnaik and Sahoo, 2009). The value chain, according to Porter, is part of the larger value system comprised of the individual value chains of industry suppliers, constituent firms, distributers and buyers (Patnaik and Sahoo, 2009). Interestingly, the term value system has been as widely accepted as value chain has; the term industry value chain is more popular (Dommisse and Oosthuizen, 2004). The purpose of the value chain model, according to Porter, was to systematically examine all the activities a firm performs and how they interact (as cited in McPhee Wheeler, 2006). Sheehan and Foss (2009) undertook to examine the intellectual underpinnings of the theory Porter laid out in Competitive Advantage. They note Porters proposal that the true value of the firm was not its products or services, but the aggregate value of the chain of individual activities that went into the production process and the only way to identify a means of identifying potential sources of competitive advantage was to examine the firm in terms of these activities. They summarized the key characteristics of Porters activity-based model. The unit of analysis was the activities the firm performed. The value chain focuses on the business or industry level. Activity drivers cost and value drivers play a key role. Activity drivers are the factors that are the firm can influence in order to position the firm as either low cost or differentiator compared to ones competitors. Activities were categorized as either primary or supporting activities. Primary activities were defined as those which directly create customer value. Primary activities are related to production and sales of the product, delivery of the product, and after-market sales (Value Chain, 2005). Structure Primary activities Inbound logistics comprises those activities involved in receiving, storing, handling, and distributing materials to the manufacturing or operations department. Manufacturing activities include those activities involved in converting the inputs received into the final product. Outbound logistics activities are those activities which are involved in the shipping, storage, and final distribution of the end product. Marketing and sales activities are those which are aimed at persuading the customer to buy and pay for the product, e.g., advertising, promotion and pricing. Finally, service activities include all activities concerned with maintaining or enhancing the value of the delivered product such as installation and repair services (Value Chain, 2005). Supporting activities Support activities serve to enhance the value (create added value) already created by the primary activities. Support activities include corporate structure, human resources, technology development, and purchasing. Corporate structure includes those activities related to management including planning, financial and accounting, legal, public relations, and quality management. Human resources activities include recruitment and hiring, training, and pay and benefits. Technology development involves R D functions such as new product development and design. Purchasing encompasses activities relate to the procurement of supplies and raw materials. The models popularity Porters model is indisputably popular. Ormanidhi and Stringa (2009) examined Porters model in comparison to several other strategies: Structure-Conduct-Performance, the New Industrial Organization and Game Theory, the Resource-Based Perspective, and Market Process Economics. The authors cite as proof a study that found Porters Competitive Strategy referenced in nearly half of the articles published in the Strategic Management Journal from 1986 to 1990. They believe Porters model is a most apt methodology for competitive analysis for several reasons. Porters model is most suitable because of its well-defined structure; it provides an analytical framework of definite criteria. Porters value chain model is practically suited for empirical analysis because it facilitates the comparison of firms and analysis of their competitive performance. Another reason Ormanidhi and Stringa mention for their preference of Porters model is its conceptual clarity; its terminology is consistent and easily understandable. Furthermore Also, Porters model complements other strategies such as game theory and the resource-based model. The last reason is inherent in Porters definition, that is, it is a generic strategy that is sufficiently general that it is applicable to various types of industries such as service and manufacturing firms. Manufacturing White and Pearson (2001) proposed in a study of the manufacturing value chain using the JIT concept and technological advances related to systems integration, the establishment of customer service levels on par with overall management objectives in order to improve organizational performance. They used Porters value chain model to demonstrate how the application of JIT systems throughout the manufacturing process enables the organization to integrate its activities in a continuous improvement process. In each stage of the Porter model, primary activities and support activities, the authors illustrate how the application of JIT techniques can optimize the manufacturing process. Retail Dommisse and Oosthuizen (2004), utilized Porters model in a study of the U.K. retail life insurance industry and introduced an evolutionary a concept referred to as value chain deconstruction which, they say, is gaining acceptance. Based on Porters model, value chain deconstruction theory is largely a result of the proliferation of new technologies and regulatory measures. Analysts, they declare, have observed components of the traditional value chain fragmenting to form new or merge with other industries. This relatively new, conceptual models main advantage, according to the authors, is that it clearly highlights the areas in the value chain where the traditional strategies of differentiation, cost leadership and focus can be applied (p. 18). Thus, Porters model persists as the foundation of new and emerging concepts of strategic management. The field of strategic management is complex and various definitions have been proposed based on the different aspects of organizational infrastructure. One means of organizing the numerous schools of thought was proposed by Mintzberg, Ahlstrand and Lampel (as cited in Sadler, 2003, p. 15) who described three major groups labeled the Prescriptive, Descriptive, and Configurational Schools. Michael Porter, renowned scholar, author, advisor, and recipient of a myriad of rewards for his work, laid the foundation of the Positioning School, which falls into the Prescriptive Group. Porters is best known for the theories illuminated in his 1980 work Competitive Strategy: Techniques for Analyzing Industries and Competitors in which he presented his Fve Forces Model five elements that affect an industrys profitability, and his generic strategies which are intended to counter those forces. In The Competitive Advantage: Creating and Sustaining Superior Performance, published in 1985, Porter developed his Value Chain Model, a framework for activity-based competitive analysis of a firm. These two monumental works have influenced academia and management since their inception. Widely popular and broadly used, these prescient theories have influenced strategic management philosophy the world over. Across the spectrum of industry types, from Japan to Europe, the impact of Porters works is indisputable. Undoubtedly, Michael Porters influence will continue to be felt in the halls of business for years to come.