Internationalisation of Private Healthcare Firms from Singapore

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Abstract

This research studies the phenomena of hospital groups expanding beyond their home country by setting up operations in less developed countries, and patients travelling out of their country for healthcare services, by looking at the internationalisation of private healthcare firms from Singapore. The research helps to address a gap in the literature as there is a lack of firm-level research on internationalisation of healthcare firms, and even more so for firms from Southeast Asia. For practitioners, the research offers a better understanding of the internationalisation strategies and choices adopted by healthcare firms, and more generally, service firms. With the region which Singapore is part of undergoing rapid integration, the study also offers useful insights on the impact of regional integration on internationalisation of healthcare firms.Using a multiple-case study of four private healthcare firms from Singapore, the research examines the where (market selection), how (entry modes) and when (timing) of their internationalisation, as well as their response to regional integration, in the context of existing literature on internationalisation of firms. The study shows that the internationalisation strategies of healthcare firms from Singapore, in relation to market selection, entry modes and timing of entry, were well-explained by existing theories on internationalisation of firms. Family ownership was identified as a reason for the deviation from theory for one of the cases. Specifically on the internationalisation of healthcare firms, the study shows that healthcare services in Singapore is undergoing commodification, with increasing use of and emphasis on ‘marketing’ to procure patients-customers; increasing emphasis on quality; and the creation of customers and consumers. This has made healthcare services increasingly “exportable” in the sense that they can be “sold” overseas away from the point of “production”, via representative offices, instead of having to rely on higher commitment non-export entry modes as indicated in the literature. Another deviation from literature was the case firms’ stated preference to make market entry using management contract instead of joint venture. This can be attributed to their strategic need to internationalise quickly and the high cost of building new healthcare facilities.Using the findings from the analysis, the thesis proposed a characterization of the internationalisation strategies of a healthcare firm from Singapore, in terms of market selection, entry modes and timing of entry. A conceptual model on the internationalisation of healthcare firms was also developed, identifying the factors which may influence the internationalisation of healthcare firms. Besides, the study identified that the healthcare firms went through four phases of internationalisation process, namely, learning, opportunistic, de-internationalisation and maturisation, with each presenting some unique patterns of internationalisation by the firms. Further analysis showed that the four phases tied in well with the “Link-Leverage-Learn” framework of Mathews (2006) for emerging/second wave multinational enterprises (MNEs), hence offering a new perspective for evaluating the internationalisation of such firms in future. On impact of regional integration, a possible “ideal” model for a healthcare MNE in an economically integrated region was proposed. Applying the model, it is proposed that internationalisation by healthcare MNEs will increase as the region integrates, and there will be further consolidation within the industry. Healthcare MNEs from small countries like Singapore are likely to compete particularly strongly, as they are under even greater pressure to secure the foreign markets given the constraint of their small domestic population.

Keyword(s)

entry mode; healthcare firms from Singapore; healthcare service; market selection; regional integration; service internationalisation; timing of entry

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