Case Study Of Aravind Eye Clinics Essay

Question:

Discuss the basic forces (push and/or pull) which have been the source of Innovation at Aravind Eye Clinics in India.

Answer:

Introduction

In the era of digital technology, most children residing in the developed countries could afford their own personal computers or even get access to computers on rent basis. There are many parents living in the rural part of Vietnam who struggle everyday just to put food on the table for their family. Only some of the well-established families can afford a computer. So much knowledge is provided on the internet and people with access to those informations will always be at an advantage. Children can learn a lot more from the computers in their homes and the underprivileged children will always be at a disadvantage, as they cannot afford computers. The report is aimed at developing Cash Convertors to utilize the business model of Aravind Eye Clinics. The case study of Aravind eye Clinics is elaborated in this report and along with the business model that aims at generating revenue from ‘the bottom of the pyramid’(Prahalad 2016.).

Discussion

Dr. Govindappa Venkataswamy popularly known as Dr. V founded Aravind Eye Clinics to serve the poor sections of Indian population (Aravind.org 2017). The business model focused on mass production of products and services while maintaining a low margin of profit. Low profit margin in turn helped to reduce the overall cost to patients of Aravind Eye Clinics. Dr. V was emphatic towards the poor people and sought for ways to provide high quality treatments for cataract at low cost. On using the target costing method, which is a widely used tool in innovation in the product designing systems, the cost of cataract surgery was reduced drastically. Doctor V introduced innovation to the underlying surgery techniques that was conventionally used in other hospitals. This caused the procedure’s time and cost of operation to be reduced significantly. A key feature of this model is quality assurance. Infection is a major issue in the medical sector and quality assurance is important to avoid this issue. Aravind Eye Clinics had addressed this issue, as the infection rate is lower than any other major hospitals. Efficiency was achieved by implementing one key surgeon who would perform two operations at a time. Paramedics performed all the other lesser medical activities related to the surgery. Using this technique low operating costs were achieved. A huge influx of patients were achieved because the operations were cheap and safe, and even free for the poor. Thus, the surgeons achieved efficiency, as they had to perform a huge number of operations annually. The system provided training to develop the necessary skill set to work efficiently and productively along with setting up factories to manufacture lenses and deliver them at low costs instead of importing them at high costs. This cost targeting helped them to serve more and more patients where only the people who could afford the operations were charged and the rest were treated free of cost yet they made so much revenue that they could largely expand the eye care facility in a relatively short period of time (Cooper 2017).


Cash Convertors can apply the same business model to expand their refurbished electronics goods sales in Vietnam. In 2006, the food poverty line was estimated to be around 6.7% while in 2011 the poverty rate of Vietnam was 12.6% (The United Nations in Viet Nam. 2017). There are many poor and underprivileged families in the Vietnam as is evident from the statistics. Thus, they can only afford refurbished computers, which can be provided by Cash Convertors at a low cost. The company can establish a branch office in Vietnam to sell refurbished electronic goods especially computers to the poor people of Vietnam. Refurbished goods can be sold at a cheap price as the cost of acquiring old computers is very low and most of the time those computers can be repaired at very easily. The profit margin would be very low for each individual computer sold. Hence, in order to generate more revenue, increase in sales volume needs to be achieved as seen in the Aravind Eye Clinics’ business model. Old computers can be recycled and refurbished by either repairing the damage or replacing the damaged part altogether. The developing countries generate huge amount of computer waste each year. This waste can be recycled and reused (Sthiannopkao and Wong 2013).There are many computer parts suppliers who sell cheap spare parts if ordered in huge quantities. Thus, Cash Convertors can stock up on cheap spare parts and use them when necessary. They can even perform a data analysis by either hiring an analyst or outsourcing the task to get an informed idea on the type of spare parts that are generally needed and stock up more of those parts. Cheap labor can be obtained from the labor market of Vietnam, as the poverty index is high (Coe and Hess 2013). Training regimens can be created for the people working at the Vietnam branch to make them accustomed to the technology and for improving their productivity and efficiency. The aim is minimize the cost of the whole process while maintaining the quality of the original product. There are various initiatives taken in other parts of the world such as the inexpensive new computers initiative of Africa that can also be applied in Vietnam (Harris 2015). Rugged low cost technologies can be provided for sale in huge numbers. Single board computers such as the Arduino and Raspberry Pi can be used to increase educational computing at affordable prices (Pi 2013). While computers are provided at a cheap rate, the internet companies might not provide cheap internet. Thus, Cash Convertors might need to better market their products by providing some free e-learning databases along with their computers. They can even provide trainers free of cost who can teach the customers the basic applications of a computer.

Conclusion

In conclusion, Cash Convertors can emulate the business model of Aravind Eye Clinics by establishing a special branch in Vietnam. There they would sell refurbished computers at low prices or even give computers away free of cost to those who live below the poverty line and can never afford a computer in the first place.

Reference List:

Aravind.org. 2017. Aravind Eye Care System. [online] Available at: [Accessed 30 Nov. 2017].

Coe, N.M. and Hess, M., 2013. Global production networks, labour and development. Geoforum, 44, pp.4-9.

Cooper, R., 2017. Target costing and value engineering. Routledge.

Harris, J.U., 2015. The Promise, Prospects and Challenges of In-formation Communication Technology (ICT) Utilization in African Educational Systems: Continental, National and Institutional Reali-ties. Nwokeafor (Ed.,) Information Communication Technology (ICT) Integration to Educational Curricula: A New Direction for Africa, pp.99-118.

Pi, R., 2013. Raspberry pi. Raspberry Pi, 1, p.1.

Prahalad, C.K., 2016. The fortune at the bottom of the pyramid: Eradicating poverty through profits.

Sthiannopkao, S. and Wong, M.H., 2013. Handling e-waste in developed and developing countries: Initiatives, practices, and consequences. Science of the Total Environment, 463, pp.1147-1153.

The United Nations in Viet Nam. 2017. Basic Statistics. [online] Available at: [Accessed 30 Nov. 2017]

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