Project Uzima

Year: 2019

Context: A Kenyan eye hospital offers out-patient and in-patient specialist services and sells glasses.

Challenge: The hospital needed support in crafting its growth and expansion strategy for new services, new geographies, and price optimisation

Key questions:

  • How should the hospital optimize its existing prices?
  • What adjacent services should the hospital offer?
  • What geographies should the hospital expand into and in what sequence?
  • What are the financial implications for geographical and service expansion?

Approach and outcomes:

a) Pricing (existing products):

  • Created a tiered pricing structure for products based on the cost of goods
  • Trained salespersons on the new standardised prices and re-labelled all the products for customers’ convenience
  • Modelled the new prices and volumes to ensure margin optimisation i.e. the cost base was covered in all scenarios

b) Geographies:

  • Analysed counties in Kenya according to GDP per capita, population density, prevalence of diseases, insurance penetration etc.
  • Sequenced the geographic expansion based on proximity to existing hospital, availability of resources etc.

c) Services:

  • Expanded services in existing hospital after benchmarking against Kenyan competitors and international eye hospitals
  • Designed a hub and spoke model where the new peripheral locations would act as spokes offering basic services and referring patients to the hub (existing facility) for specialised services

d) Financial implications

  • Modelled the income statement and balance sheet for new hospitals
  • Determined the capital investment required for the strategy