Mj's Health Screening Center with the concept of production line to develop youth market.
It is not a coincidence for a small Health Screening Center in Gaoxiong, managed to break through the monopoly from four main hospitals of Taida, Rongzong, Guotai and Zhanggeng. Identify what the competitors lack of, fulfill unsatisfied needs in order to fill the gap. " MJ Health Screening Center is able to master the concept of production lines and after sales service. Therefore, it managed to switch the market segmentation of health screening service from the top of the pyramid to youth market, middle class and able to transform a new market horizon. In other words, the success story of MJ is definitely not incidental.
In December 2003, MJ Health Sreening Center from Taiwan established its most comprehensive Health Screening Center at Oriental Mall, wangfujing Street, Beijing.
The MJ Health Screening Center consists of almost 3000 square meter, even Beijing TV broadcast station broadcasted the news on it continously for a few days to introduce MJ special program. It becomes the learning objective of all the major hospitals in Beijing.
In Taiwan, MJ has become the market leader in Health Screening sector.
Through out the country, MJ managed to occupy 50% market shares of Health Screening market (80,000 people every year), and also venture into Hong Kong and Beijing, number of members is more than 870,000 people.
23 years ago, MJ was just only a nameless and small size health screening center. How is it able to overcome and turn around the whole market situation, which was all the while controlled by four major hospitals of Taida, Rongzong, Guotai and zhanggeng. MJ managed to escape from "Red Ocean" and develop a great and huge middle class market.
"Blue Ocean Strategy" emphasizes that a corporate should turn back and find out those neglected key elements and to satisfy those unfulfilled needs.
MJ is a classical example of a Blue Ocean Strategy corporate, it offers a tracking system which was neglected by major hospitals, with its low price and speedy health screening practices, it managed to attract those youngster who never go for health screening before. As for Japan scenario, the average age for health screening is 60 years old, where as in MJ, its customers' average age is only 30 years old.
A layman may not have professional's blind spot
When we analyze the rapid growth of MJ, the key point is "without professional hospitals' blind spot", MJ's Chairman - Mr. CK Tsao who is 56 years old indicated that, the most important points is to evaluate the health screening center from customers' perspective but not with doctors' perspective, in order to operate the center effectively.
Mr. CK Tsao who had sold acupuncture equipment with great profits, starts to think how to find a business opportunity at the up stream of health care industry. "Health Screening is the source of all the medical industries".
From the observation of Mr. CK Tsao, all the while, Taiwan health screening market was monopolized by the four major hospitals of Taida, Rongzong, Guotai and Zhanggeng. At the hospitals, it was attached under the health screening item and did not have health screening center, which was operated independently.
Eventually, people start to emphasize on their health condition, but those major hospitals are only targeted to rich people. In order to have a whole body screening program, it would take more than two to three days. For those office employees, it would be impossible for them to take leave for health screening. "No one did pay attention to health screening which was specially designed for middle class market segment".
At that moment, only those who are rich, can afford to go for health screening, most of the people are not able to do so due to their financial and time factors. Mr CK Tsao pointed out, in 1987, the health screening fee of Rongzong, Taipei was about $20,000 and you were required to have relationship then only you were be able to wait for several months for health screening service.
In order to understand more about the actual operation of Taiwan health screening organizations, Mr. CK Tsao took up the mysterious task of going through Taiwa, Japan and US Health Screening Centers. Within a year, he went through more than 20 times health screening and recorded in details of all the advantages and disadvantages of all those health screening centers.
Mr. CK Tsao realized thatmost of the people felt reluctant and did not want to go for health screening due to the expensive charge and the process of a large intestine endoscope. "Every time you'll be able to hear horrible screams from the endoscope treatment and diagnosis room." Further more, at that moment, most of the hospitals grouped the health screening customers together with patients and it was easily intercross infected.
Major hospitals only focus on the health screening service for those customers who are on top of the pyramid, and never fulfill the needs of the middle class.
MJ diverts its focus from those higher income customers to middle class customers, therefore, established a new market horizon.
Turn a customer to become a business partner
In 1988, Mr Ck Tsao raised NT$60 million as business capital and decided to start his business in Gaoxiong, but not in Taipei. "This is because MJ was rather small, it would be able to avoid the competition from those consortia."
However, during that moment, consumers of Taiwan only confident with those major hospitals and famous doctors. During the first 3 years of MJ operation, due to the restriction of the medical law, health screening centers were not allowed to advertise. although Mr. CK Tsao tried manymarketing strategies, there was still a lost of more than NT$3 million incurred in each month. The number of members unable to exceed 2000 people.
In 1991, Mr. CK Tsao changed his mind by turning those customers into business partners. He also shifted MJ business model into multi level marketing and increased the bonus of 40% to 60% of the standard bonus pay back structure of a multi level marketing industry. It started with a series of educational training (including human relationship, health care professional knowledge), transforming customers to become a team of business partners. Eventually, Health Cards and Corporate Cards, which prioritized to family was launched. With in a year, it broke through the numbers by exceeding 10,000 members, hence turning losses to profits.
Enhancing with the concept of production lines
It is due to the fact that the health screening processes of the hopitals are lacking of systematic planning. "Most of the customers spent their time in waiting, which was really a waste of time". Mr. CK Tsao pointed out, a general health screening center, after went through 90 over types of health screening, even after a week, customers would still notbe able to receive their health screening report.
With the same type of health screening, MJ only needs 4 hours to complete the health screening, and the profeessional doctors will explain to the customers regarding their screening reports, and customers are able to receive their screening reports on the spot. How did MJ do that?
"We are treating the screening items as production lines, fully computerized and automated". Mr CK Tsao said. MJ alsoset up its R & D department, fully focuses on bring in advanced technique and process improvement.
MJ implements the management of production lines, which is usually applied by IT industry in the health screening flow. Mr. CK Tsao invests heavily in it and links all the health screening equipment with computerized system.
In Taipei, Tao Yuan, Taizhong and Gaoxiong, MJ built fourteen health screening lines and appointed 20 qualified doctors, 77 nurses and 41 part time doctors.
At MJ, those who are going for the health screening need to fast for 8 hours prior, collect their feces and to fill up questionnaire in order tosave time. The computerized system will be able to arrange all the health screening items accurately. All the screening data will be transmitted through computernetwork and the computer system will automatically regulate the waiting number of each health screening customer. Therefore it shortens the waiting period of the customers.
The advantage of computerized management is not only shortening the waiting period, but it also reduces the time of those health screening equipment to be left unused. Therefore it will help increase the numbers of customers and its velocity will be further increased.
One of the most important factors for health screening is its accuracy; the key factor is the quality of the health screening equipment and reagent. Since the initial stage, MJ has started adapting the most accurate international branded reagent and participating in CAP test of US in order to enhance its health screening accuracy.
It is due to the fact that the health screening numbers has exceeded 80,000 people, MJ becomes the main buyer of those international branded reagent in Taiwan. "MJ's annual purchase volume of reagentis equivalent to more than a half to the total of Taiwan's consumption". Mr. CK Tsao emphasized.
It is because of the large volume of reagent used at MJ, the purchase price of these international branded reagents is even cheaper than the local brands.
Comparatively with the standard health screening fee of NT$20,000 at hospitals, with the computerized health screening flow build-up system and its reagent purchasing advantage, MJ will be able to keep the health screening fee as low as NT$4,500
In 2003, MJ automation health screening service technique attracted Japan St. Luke's International Hospital to learn its expertise and to import the whole MJ's health screening system into its existing system.
Enhancing the after sales service which is neglected by major hospiotals.
Those whogo for the health screening at major hospitals, doctors usually explain its medical report very briefly. "After the health screening, the relationship of hospital with the person who has gone through screening service will be disconnected, without any after sales service as all." Mr. CK Tsao observed.
Therefore, in order for MJ to create a competitive advantage, he is determined to enhance the after sales service, which has been neglected by major hospitals.
At MJ, after every health screening service, there will be three health screening reports utilized as comparison, within 10 days, 20 consultants with 15 years of experience will keep track via telephone with customers. They will use simple terminology instead of medical terminology to explain to customers regarding their report and also will provide health care consultation to all the customers.
Besides, MJ also invested heavily in November 2000 in order to set up "e-health Web", each of the customer will be having his or her own individual web pages that records his or her health report and health care proposal and they are also entitled for free participation of Health care talk throughout the country.
Towards Gene Industry
MJ has been established for 23 years, with the health screening volume of 80,000 people and 20,000 cases are willing to contribute their health screening record for MJ to build up its database. The huge gene information attract many gene projects from research units to offer their support on the research program.
MJ started as a small health screening center in Taiwan but now become a market leader in the health screening market. With such a competitive environment and yet able to reset its positioning in its health screening service area and found totally new Blue Ocean of its own.
Mr. CK Tsao emphasizes that the success of MJ is not a coincidence, it is due to the fact that it has managed to identify those neglected area of competitors and to provide service which is able to fulfill the needs of market which has been neglected all the while.
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