Stork Home Fernandez Hospital: Going to Market with a Purpose-Driven Disruptive Innovation
Fernandez Hospitals (FH) was a unique health services organisation focused on women and newborns, based in Hyderabad, India. Its vision was to promote natural childbirth and respectful maternity care across India, make pregnancy safe for women and their babies, promote midwifery training and birth without interventions, and to always lower costs for patients. A strong advocate of natural birth, FH's Chief Executive Officer, Dr. Evita Fernandez, had long opposed the growing trend of caesarean section (C-Section) births that had largely been driven by private hospitals across the country seeking to maximise their profit margins. Since 1990s, as the country's economic growth surged, women from the affluent classes, as well as educated working women, had emerged as a large and growing segment that could pay premium prices for high-quality maternity services that also provided a premium experience. Given FH's reputation as a caring institution in the field of obstetrics, gynecology, neonatal care and allied areas, FH made the decision in 2016 to establish Stork Home as a hospital in the upscale neighborhood of Banjara Hills that would cater to the premium maternity services segment of Hyderabad. However, even after two years of operations, Stork Home was languishing in terms of low inpatient occupancy and poor financial performance, which was also affecting the profitability of FH as a whole. It seemed that good intentions had run aground on the harsh shores of a highly competitive landscape. The case delves into the causes of poor performance, contrary to the expectation that FH's ability to attract patients would carry over to the premium Stork Home brand. The case poses a series of questions centering around the future 'go-to-market' strategy for Stork Home. These questions are posed against the backdrop of intense competition from well-established large hospital chains with aggressive marketing efforts and a focus on maximising profits.