Success Drivers Behind Aravind Essay

2594 Words11 Pages
William Duran

Aravind Case Study Introduction In a country plagued by curable and needless blindness, 58 year-old surgeon Dr. Govindappa Venkataswamy recognized upon retirement that his 100,000 sight-restoring surgeries were not enough of an impact to fight blindness in India and cure the 12 million people affected by it. With a big dream, but no money, no business plan, and no safety net, he embarked on a journey to start an organization with a single purpose in mind: to give sight for all. Starting with a small 11-bed clinic, he went on to create the Aravind Eye Care System, today’s largest and most productive blindness-prevention organization on the planet, which sees more than 2.5 million patients a year. With the success that
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Business Model When Aravind was first started it was done so as a non-profit, raising money through private donors and fundraises, but these efforts failed as there was not enough credibility and people weren’t providing them with enough money. Then Aravind changed to a hybrid model, charging patients based on how much they could afford to pay for their services. The creation of differentiated services was based only on the accommodations associated with the surgery, and the type of less – meaning the quality of the surgery was never affected whether you paid or not. This cross subsidy system in which charging patients relied in that the revenues from the paying customers would help cover the cost for the non paying or ultra subsidized customers. For this pricing strategy to work successfully, it was important for Aravind to have a high volume of customers. Aravind used community partners and eye camps to access the poor; this created a

William Duran

huge demand for their services. With each surgeon performing more than 2000 cataract surgeries per year (5 times more than the average) the reputation of its surgeons and of the organization quickly grew, and there was more interest among wealthier people to be treated at Aravind. Also, high volumes of people meant lower cost per customer due to higher productivity and utilization of equipment “While the average practitioner uses his surgical microscope 20 times

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