American Hospital Firms and the Burgeoning Chinese Private Health Market

Abstract

Globalization of health care services is becoming an alternative or complementary strategy for some U.S. health care organizations due to increased competition, a stagnant health care market, and nationally imposed cost constraints in the U.S. Additionally, entrepreneurial U.S. firms may see globalization as an opportunity to promote their services in new countries with increasing demand for advanced technological services. If an ambitious American health care firm decides to globalize its product or service lines, what might be some of the primary strategies it would use to enter an international market? To investigate this question, this chapter considers the strategies of two American firms that have entered the Beijing and Shanghai markets since 2000. We conducted numerous telephone conversations and interviews with executives of these firms in an attempt to understand their market entry and early development strategies. These firms’ market entry strategies range from “greenfield” operations, where the hospital does little to change its corporate and managerial style from what it uses domestically, to a “glocalization” strategy, where the firm is quite sensitive to fitting into the Chinese culture and being accepted by the Chinese government. The strategic challenges for international hospital organization developments in China are many, but the potential rewards from becoming among the leading firms in a large nation with an expanding economy are tremendous. What we learn from the experiences of enterprising American hospital firms in Chinese may well portend the future for international developments by many other American-based health organizations.

Citation

Gifford, B.D. and Wood, D. (2005), "American Hospital Firms and the Burgeoning Chinese Private Health Market", Savage, G.T., Chilingerian, J.A., Powell, M. and Xiao, Q. (Ed.) International Health Care Management (Advances in Health Care Management, Vol. 5), Emerald Group Publishing Limited, Leeds, pp. 101-115. https://doi.org/10.1016/S1474-8231(05)05004-4