3DClinic Pty Ltd – Key Strategic Initiatives

The findings derived from the SWOT analysis, which was carried out to identify 3DClinic's external and internal environment, reveal multiple business opportunities for the company.Several key strategies which 3DClinic could potentially implement in the near future have been identified.

On the one hand, pursuing a strategy such as market penetration which would focus on creating a stronger presence in the Australian market seems like a viable option for 3DClinic. In addition, the company could concentrate on further innovative product development by leveraging its R;D facilities and competencies. On the other hand, 3DClinic could also consider market development and thus expand into foreign markets. Given the numerous international opportunities which were revealed by the SWOT analysis, this strategy seems feasible, too.However, in view of 3DClinic's limited resources, the mentioned strategies, although viable, cannot be pursued all at the same time. Taking into account the SWOT analysis for 3DClinic, the report elaborates on the two strategies of market penetration and market development.

Whereas market penetration will be achieved through enhancing marketing activities and the formation of strategic alliances with educational providers, the strategy of market development will consist in 3DClinic going overseas. It is recommended that 3DClinic exports or licenses its products to India, a fast growing and IT savvy country, which is still a mainly untapped market with regards to medical imaging. While highlighting the various positive opportunities, the report also emphasizes the potential risks that accompany international expansion.1 IntroductionA study of the external and internal environments that surround 3DClinic Pty Ltd. has revealed that the company is successfully leveraging its position in the medical imaging industry through its differentiation strategy.

Efficient and effective utilization of the company's resources and technological capabilities has enabled 3DClinic achieve significant competitive advantage with the uniqueness of its product. Its visible success has provided the company with various opportunities for growth, for which suitable strategies need to be formulated. A SWOT analysis has been prepared (please see table below) from which possible strategic choices for 3DClinic have been derived and selected.As the SWOT analysis reveals, 3DClinic has the option of pursuing opportunities that fit the company's strengths. By establishing alliances with organisations that aid in international growth, 3DClinic can hope to achieve a first-mover advantage in more profitable, untapped markets overseas with its unique product that is protected by patents. Using its strengths to control external threats such as increased competition can also be a feasible strategic measure for 3DClinic, by way of increased R&D to keep abreast of emerging technologies.

To prevent the company's weaknesses from becoming vulnerable to external threats, especially when selecting a strategy for international expansion, it is crucial that 3DClinic selects appropriate and reliable channel partners. Overcoming weaknesses to capitalize on opportunities by investing in human resources for purposes of product development can also be an attainable strategic choice for 3DClinic.The company could pursue any of the above mentioned strategies. However, sustaining a competitive position in the market could be achieved by just focusingon their current competencies along with its current business level strategy of product differentiation.

The corporate level strategies of market penetration and development have thus been proposed, which will permit 3DClinic to compete with its existing product to gain more market share and remain successful.Table: Traditional SWOT Analysis2 Strategic Initiatives2.1 Strategic OptionsBy performing a SWOT analysis of 3DClinic, three directions have been identified which the company could take to expand on its core functionalities and diversify into new markets.Penetration of the existing market that 3DClinic caters to, could be achieved through greater brand awareness of its product. This can be accomplished by means of increased advertising efforts in health and educational journals, and creating strategic alliances with companies providing them with valuable distribution channels to educational institutions.

Sound marketing strategies will be required for such promotional activities to help the company gain a more visible presence in the Australian market.Increased development of the existing product through new innovations and modifications could also help 3DClinic attract a wider clientele. By including new and valuable features the company would be able to target markets more effectively and compete on the basis of wider product functionality. The company might also diversify into creating more programs that are concerned with problems prevalent world-wide, such as AIDS or cancer.Given the company's capabilities, developing the target market can also be considered as an option by 3DClinic, by tapping into newer markets overseas.

With careful selection of appropriate channel partners, and leveraging on their global product features, 3DClinic could aim to extend its reach to more lucrative markets abroad such as India.However, given the current infrastructure of 3DClinic, developing new products would require considerable amounts of tangible and human resources to be invested in, both of which are available in limited capacity.In summary, penetrating their current market segment through increased brand awareness as well as developing a new market in profitable areas overseas would prove to be feasible strategies to pursue for 3DClinic. Thus, this report will further elaborate on how 3DClinic can pursue the two strategic options of market penetration and market development.

2.2 Market PenetrationTo leverage the rising success of its product, 3DClinic can hope to penetrate the existing market through marketing activities and formation of strategic alliances, which will increase consumer awareness of the company and its product, in addition to increased popularity leading to wider usage of the software.Numerous schools around Australia are becoming more health conscious, advocating well-being of children through various health promotion strategies (CHDF, 2006). With increased usage of computers for educational purposes in schools and universities (Bennett, 2001), it is logical that teaching students about various health issues through computers can not only modernize the delivery of such information, but also prove useful in the learning process (Cribb & Schmidt, 1996).

Apple Computer Australia Ltd. has been providing schools and universities in Australia and New Zealand (Apple New Zealand, 2006) with Macintosh computers bundled with more than 6,500 educational software applications (IFIP, 1996). 3DClinic, with its invaluable resource of Australian and New Zealand patents for reproducing its software over computer peripherals, could capitalize on Apple's relationship with schools and universities and their commitment towards education. By forming a strategic alliance with Apple, 3DClinic could bundle its Body Skills program (3DClinic, 2006) along with the other education software applications that Apple provides with its Macintosh computers.

This would not only benefit schools looking to impart health education with the use of interactive and effective technologies, but also help 3DClinic overcome its current weakness with regards to distribution channels, thus allowing them to capture a larger market share.Other means of increasing brand awareness for 3DClinic could include increased advertising and promotions in health journals and educational magazines. The 'Medical Journal of Australia' (MJA, 2006), the 'Health Education Australia Journal' (ACPHER, 2006) and the 'Active & Healthy Magazine' (ACPHER, 2006) represent the country's most widely read medical journals. With subscribers ranging from medical colleges, to doctors, healthcare workers and educators in the classroom, online and print advertisements in such mediums could efficiently help 3DClinic market its product. Moreover, it provides the company with a channel through which it can also advertise free trial versions of their software, which could help them attract both medical and educational professionals.

Advertising through televised media can also prove beneficial for 3DClinic. The Discovery Channel, for example, is well known for its programs relating to science, reaching an audience of 450 million homes worldwide (Wikipedia, 2006). Discovery Health, an affiliated channel, deals mainly with programs on human health issues. Advertising 3DClinic's products on such a reputed, well established TV channel could help increase awareness of the company.

With assumed constraints on financial resources required to allow for such form of advertising, 3DClinic could instead advertise on the TV channel's website which also acts as a reliable source of information on various health issues.Overall, increasing promotional activities can significantly aid 3DClinic in their growth strategy in Australia. Boosting current market share through marketing activities could not only convince existing clients to use more of the product, but also help attract potential customers away from competitors in the long run.2.3 Market DevelopmentDrawing on our external analysis, especially with regards to the global environment, it can be stated that several trends have both national and international relevance. This opens up global opportunities for 3DClinic and its products.

In particular, the increasing health-consciousness among society, the overall development of an ageing population (ABS, 2005) as well as the rising importance of visual communication in the health care sector (Outsource2India, 2006a) indicates a growing demand for professional health services and expenditures world-wide.Thus, another key strategy that 3DClinic should pursue consists in leveraging 3DClinic's competitive advantage in medical imaging by going overseas.Having already pitched for an amount of $2 million to fund overseas expansion (Fenton-Jones, 2004) and being supported by Austrade regarding overseas promotions and export development grants (Switzer, 2003) 3D Clinic's market expansion seems favourable. In addition, 3DClinic's software is especially suitable for global expansion as its features, such as the language, can easily be adapted to each market (McParlane, 2006).

Being present in New Zealand, UK, USA, Canada and Japan (McParlane, 2006), 3DClinic has already started its overseas expansion. In addition to its existing portfolio, 3DClinic could consider entering other markets which offer profitable growth, high demand for medical imaging and no direct competitors. It is suggested that 3DClinic expand to India, a market which, after an in-depth analysis, appears to be a highly lucrative, but untapped market with regards to medical imaging (Pasha, 2004).2.

3.1 India and its external environmentThe analysis of India's external environment identifies multiple opportunities for 3DClinic. India's political and legal environment appears to be relatively stable, in particular with regards to patent and copyright protection for software (DIPP, 2006) which has continuously been improved (Zinnov LLC, 2003) since India became a member of the WTO (WTO, 2006). The establishment of the Australia-India Council (DFAT, 2006) certainly has a positive impact on the commercial trade between Australia and India and thus opens up further international perspectives for 3DClinic.Moreover, the Indian government's extensive funding of technology and the country's IT and computer knowledge and usage (Outsource2India, 2006b), especially in the health care sector (Gross and Weintraub, 2005), creates an encouraging environment for 3DClinic.

With most doctors now using computers during their patient consultations (McParlane, 2006), hospitals in India are becoming increasingly computerised (Kiran, 2003).Concerning India's economy, it can be stated that India boasts a booming economy with 7.6% GDP growth in 2005 (WorldFactBook, 2006) which results in the population placing higher demands on the government regarding health care standards and delivered services (Gross and Weintraub, 2005). Enormous investments and modernizations have been undertaken concerning India's health care infrastructure (CCBMKAU, 2006) and India's academic institutions (FICCI, 2006c).

The Indian society, which comprises around 1,029 billion people (Census of India, 2001) is becoming increasingly well-educated (WorldFactbook, 2006). The country disposes of a large pool of IT specialists, engineers and scientists (FICCI, 2006a). Although English is used in the political and commercial environment, there is a multitude of different languages used in India (WorldFactBook, 2006) to which the 3DClinic Software could be adapted.In spite of the increasing sophistication of India's society, poor literacy may still be a problem in rural areas. In these regions, people may especially depend on the visualization of health care communications which helps reduce feelings such as stress and anxiety (McParlane, 2006).

An analysis of the medical imaging industry in India highlights a dynamic industry. Overall, the Indian Health Care Industry is predicted to grow from currently US$ 17.2 billion to US$ 40 billion by 2012 (FICCI, 2006b). Furthermore, India experiences a growth of 10-12% in its medical devices sector (Gross and Weintraub, 2005) with hospitals strongly investing in computers, technology upgrades and medical imaging systems (Pasha, 2004). This represents an excellent opportunity for 3DClinic and its products.2.

3.2 India and Porter's DiamondThe Diamond Model highlights the determinants of national advantage, as shown for India in the model below. As revealed in the analysis of India's external environment, it can be stated that India appears to be an attractive overseas market for 3DClinic.2.3.

3 India and Mode of EntryWith regards to 3DClinic's mode of entry, the export mode has been utilized so far when entering foreign countries (Switzer, 2003). The 3DClinic CD has been exported to countries such as Japan with 3DClinic being assisted by drug companies to increase product awareness on the local level (Switzer, 2003).Due to constraints regarding financial resources, 3DClinic cannot afford to make heavy investments in its overseas markets. Thus, the export mode seems to represent a viable strategy for 3DClinic, especially when taking into account India's generous policy concerning tax incentives for exporters (Outsource2India, 2006b).However, 3DClinic could also consider adopting a licensing strategy, as India has a highly skilled labour force whose expertise the company could trust.

Moreover, strong copyright and patent regulations would protect 3DClinic's software in this case.In its expansion process, 3DClinic should also focus on an international differentiation strategy and leverage on the product's unique features delivering distinctive value to the customers.2.3.4 Risks of overseas expansionAlthough India appears to be a highly profitable market to enter, 3DClinic should be aware of the potential risks that accompany international expansion. Most importantly, the company should make sure that its international patents are no longer pending (Foreshew, 2004) when entering the foreign market.

In spite of the booming IT market and the increasing computerization of Indian hospitals, 3DClinic should be aware that the necessary equipment for its product might still be out of reach for rural areas. Doctors practising in these regions might not yet be aware of the extensive potential of computer usage regarding improved patient consultations (Kiran, 2003).3DClinic should also acknowledge that there are international competitors with abundant resources in the Indian medical equipment industry such as GE HealthCare (Chaturvedi, 2006) and Kodak Health Imaging (MelCole, 2004); however their products do not come close to 3DClinic's unique medical imaging software and thus do not pose an immediate threat to the company.ConclusionBoth market penetration and market development are key strategic initiatives 3DClinic should adopt over the next 18 months.

By pursuing these strategies, 3DClinic will be able to further penetrate the national market and gain a strong foothold on an international level.The company's differentiation strategy which emphasizes 3DClinic's unique and easily adaptable features plays an integral role in both the national and international environment. By providing superior value to its customers, 3DClinic will be able to shape a sustainable competitive position.Despite this positive forecast, 3DClinic should carefully monitor its national and international environment. Competitors in the national market, such as 'True Life Anatomy' (True Life Anatomy, 2006) and 'Anatomics' (Anatomics, 2006) as well as direct international competitors could represent a risk to the company.

When choosing its strategic initiatives, 3DClinic should also be well aware of its limited resources and acknowledge the risks an overseas expansion entails.