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International Journal of Emerging MarketsThe competitive challenge of emerging markets: the case of medical tourism

Peter Enderwick Swati NagarArticle in format ion:

To cite this document:Peter Enderwick Swati Nagar, (2011),"The competitive challenge of emerging markets: the case of medicaltourism", International Journal of Emerging Markets, Vol. 6 Iss 4 pp. 329 - 350Permanent link to this document:http://dx.doi.org/10.1108/17468801111170347

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The competitive challengeof emerging markets: the case

of medical tourismPeter Enderwick and Swati Nagar

Auckland University of Technology, Auckland, New Zealand

Abstract

Purpose Increasing globalisation of the healthcare sector suggests that there may be newcompetitive opportunities for emerging economies in this price-sensitive sector. The purpose of thispaper is to examine the extent to which emerging economies, and in particular the four major Asiancompetitors Thailand, India, Malaysia and Singapore can compete successfully in the medicaltourism (MT) sector.

Design/methodology/approach The authors evaluate this sector in terms of Porters Diamond ofNational Competitiveness, as well as considering the challenges that competitors must address. Theprimary challenges relate to attracting consumers, proving assurances of quality for a credence good,increasing scale while maintaining quality, addressing ethical issues and moving beyond simpleprice-based competition.

Findings The authors conclude that the major Asian competitors in MT benefit from stronggovernment support, rely heavily on overseas linkages and accreditation, and are competing in verysimilar ways. In the future, further differentiation is both likely and desirable.

Originality/value The paper offers a theoretically based analysis of the future competitiveness ofthe rapidly evolving MT industry in four key Asian economies. This industry appears to relate well tothe comparative advantage of emerging economies and offers future opportunities for upgrading andvalue adding.

KeywordsThailand, India, Malaysia, Singapore, Emerging economies, Business development,

Globalization, Health care, Medical tourism, Competitive strategyPaper typeResearch paper

IntroductionThe economic rise of emerging markets has been well documented (van Agtmael, 2007;Enderwick, 2007; Sirkin et al., 2008) illustrating the growing importance that theseeconomies play as both final markets and production sites for an increasing range ofproducts and services. One of the most important recent developments, particularlywithin the leading emerging markets, the so-called BRIC economies of Brazil, Russia,India and China, has been the strong competitive challenge emanating from domesticfirms based in emerging markets (Ramamurti and Singh, 2009; Sauvant, 2008). In anumber of industries consumer electronics, steel manufacture and solar energy for

example emerging market firms have moved beyond being merely OEM suppliers andhave achieved strong global market positions (Buckley et al., 2007; Gammeltoft, 2008).The best known example is the Indian business process outsourcing industry (Davies,2004; Kobayashi-Hillary, 2004). Another service industry attracting strong interest isso-called medical tourism (MT) which refers to the practice of travelling acrossinternational borders to seek healthcare. The scope of MT is broad: it comprises electiveprocedures, complex specialized surgeries such as heart valve replacement, as well asdental and cosmetic surgeries.

The current issue and full text archive of this journal is available at

www.emeraldinsight.com/1746-8809.htm

The challengeof emerging

markets

329

Received January 2010Revised May 2010

Accepted August 2010

International Journal of EmergingMarkets

Vol. 6 No. 4, 2011pp. 329-350

q Emerald Group Publishing Limited1746-8809

DOI 10.1108/17468801111170347


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The MT industry may be one of considerable appeal to emerging markets. On initialexamination, it appears to play to their strengths. It is expected to experience stronggrowth in the foreseeable future (Deloitte, 2008); it is an industry where emergingmarkets enjoy a huge cost and price advantage and where they can combine

complementary activities such as medical and tourism services. In addition, MT is asector that lends itself to government intervention and support, a characteristic ofmany successful industries in a number of later developing economies (Luo et al., 2010).However, MT also brings significant competitive challenges. Potential consumers needto be assured with regard to quality and safety; there are legal issues with respect toliability in the case of misadventure and the willingness of home country medicalpractitioners to provide post-operative care. It is already a competitive business withsome 50 countries claiming MT as a national industry (Gahlinger, 2008).

This paper examines the potential that MT offers as an internationally competitiveindustry for emerging markets and in particular for four Asian countries Thailand,India, Malaysia and Singaporethat are fast developing players in the industry. To assessthe potential of the MT industry, we seek to answer a number of questions. The first iswhether or not MT is an industry that is appropriate for emerging economies. To answerthis question, we look at the requirements for successful industries in emerging markets.This involves a consideration of national, industry and firm characteristics. Second,we also examine the competitive advantages that are necessary conditions for success inthe MT industry and in particular, the extent of such advantages in the four major Asiancompetitors. The third question we consider is the extent to which concerns within theindustry can be addressed as well as the policy implications and in particular, the valueof government involvement in the development of MT services.

To answer these questions, the discussion is structured around six main sections.The following section offers an overview of the MT industry and in particular its sizeand growth potential. We also discuss the key drivers and constraints affecting industry

growth. The third section develops the conceptual literature on the requirements forsuccessful industries in emerging markets using Porters Diamond of NationalCompetitiveness (Porter, 1998). The fourth section then offers an overview of four keyAsian emerging markets and their competitive position in the global market for MTservices. The fifth section discusses some of the chief concerns surrounding the MTindustry which would need to be addressed by any successful international competitor.The final section offers concluding thoughts.

The nature of the MT industryMT is an industry with a considerable tradition. In Roman Britain, patients travelled to themajor spa towns such as Bath to take the supposedly healing waters. From the eighteenthcentury, numerous other spa and sanatorium towns from Europe to the Middle East

attracted prosperous visitors. The development of cheap long haul travel has now openedup global options forsuchtravellers.Horowitz and Rosensweig (2008)suggest thatthe keydifference between historical and contemporary medical tourists is that the latter enjoynew healthcare opportunities which do not necessitate almost unlimited resources.

Because of this broader appeal, MT has grown strongly in recent years, primarily asa result of rapidly rising costs and increasing waiting lists in the developed economies(Bookman and Bookman, 2007; Connell, 2006). Inadequate resources and the nature of agood where demand always seem to exceed supply means that consumers are

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increasingly looking at global solutions to their needs. However, it should also berecognized that for some medical tourists the overseas destination may offer superiormedical facilities or treatments that are not available locally (Teh and Chu, 2005).

MT is broad in its coverage. While it is generally understood to include a range of

medical procedures, it is more encompassing than this. We would also include dentaltourism, where individuals seek dental care outside their local healthcare system,fertility tourism which may involve fertility treatment or surrogacy procedures, as wellas appearance enhancing cosmetic surgery. The motives which underlie these differentprocedures vary. In many cases, particularly for medical interventions, the primarymotive is lower cost or as a means of circumventing long waiting lists. Fertilitytreatment may be sought overseas when procedures or approaches have not yet beenapproved in the patients home country. In certain cases, often for cosmetic surgery,privacy concerns may prompt the choice of overseas treatment.

Size and growth of MT

Forecasts of MT suggest significant future potential growth. One widely cited estimateis that the industry will grow in value from $40 to $100 billion between 2004 and 2012(Deloitte, 2008; Herrick, 2007) and that medical tourists could comprise 4 percent of thetotal travel population (Taiwan Institute of Economic Research, 2009). The Deloittereport suggested that MT originating from the USA could increase ten-fold over thenext decade. They estimated that three-quarters of a million Americans travelledoverseas seeking healthcare in 2007 and this was predicted to double to one-and-a-halfmillion in 2008. Market research suggests that while only 10 percent of people from theUK and the USA have travelled overseas for medical treatment, a much largerproportion, perhaps 60-70 percent, would consider seeking treatment abroad (Researchand Markets, 2009). While medical travellers seek out services in many parts of theemerging world, Asia is an increasingly popular destination. MT in Asia is estimated

to be worth more than $3 billion, accounting for more than 12 percent of the globalmarket and is growing at more than 20 percent a year (Velasco, 2008).

There has been considerable criticism suggesting that these figures seriouslyoverstate the true size of the MT industry. For example, estimates by McKinseysuggest that the market for genuine medical tourists may be only 75,000 patients ayear, a mere 10 percent of the Deloitte estimate (Ehrbeck et al., 2008). The principalexplanation for such a significant discrepancy is the view that estimates of MT areconflated by expatriates living overseas or conventional tourists experiencingunexpected medical problems.

Estimates of likely future growth of the industry are sensitive to both economicconditions and a number of constraining factors. It appears that the number of medicaltourists has certainly slowed in the current recession (Einhorn, 2008a). A priori, the

expected impact of a recession on overseas medical travel is not clear. On the one hand,the lower costs offered overseas may be expected to increase numbers. On the otherhand, difficult conditions may force potential patients to postpone non-essentialtreatment, particularly cosmetic or appearance surgery.

Growth of MT also faces a number of constraints. Key among these are capacityconstraints (number of beds, supply of medical staff, advanced technologyand infrastructure) in emerging markets, planned US healthcare reform, a strongcompetitive response by developed country medical providers, decisions by health


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insurers on whether to cover treatment services offered overseas and the possibility ofa series of medical mishaps which could adversely affect consumer decision making.

Also, critical to the pace of future growth is the efficacy of consumer decisionsregarding treatment options. Healthcare decisions are inherently complex and involve a

number of risks: medical, emotional and commercial. Healthcare is also an example of acredence good a good characterized by high pre-buying costs and high post-buyingcosts of quality detection. It is difficult for the consumer to accurately judge utility evenafter consumption (Benz, 2007). Furthermore, healthcare services have bundledcredencecharacteristics where the seller provides both treatment and recommendations for theextent of such treatment (Alford and Sherrell, 1995; Darby and Karmi, 1973). Suchcharacteristics where the seller is better informed regarding the utility offered creates asituation of asymmetric information. Because of a deficiency of objective information thebuyer relies on third-party judgments which may be provided through accreditation,affiliation, testimonials or the sellers reputation.

The complexity of commercial decisionsis in part the result of the importance of thirdparties, particularly insurance companies, in healthcare decisions. Multifarious issuesarise with chronic diseases where handover and follow-up in the home country mustoccur. Insurance companies have difficulties in handling such situations. Furthermore,standard travel insurance does not provide adequate coverage for MT, where commonexclusions generally preclude pre-existing conditions, non-emergency dentistry andcosmetic surgery. Similarly, the situation regarding legal redress in the event of medicalmishap is far from clear. It is unlikely that a medical tourist would have any recoursethrough their home court system where they use the services of a non-medicalintermediary (see below) who cannot, by definition, commit medical malpractice.

While these factors may constrain the expected very high growth rates of MT,MT is just one facet of the globalisation of healthcare which is likely to radicallyreshape healthcare services. It is now common practice for the interpretation of

diagnostic tests, the annotation of medical and insurance records and drug testing to beoutsourced overseas. While such outsourcing and MT could impose considerable costson developed countries healthcare systems, it has been suggested that overall theimpact could be positive, for example, substantially lowering very high US health costs(Cox and Sood, 2009).

The key drivers of MTIt is possible to identify a number of factors which are driving the growth in MT. A keydriver is the increasing recognition that people will be required to take greaterresponsibility for their wellbeing and medical costs. Rising costs and growing waitinglists mean that many people will seek out new sources of treatment. Furthermore, moreindividuals, particularly within the USA, now find themselves either uninsured or

underinsured. For example, only 43 percent of small US businesses still offer healthcoverage, compared with 96 percent of companies with at least 50 employees (Tozzi,2009). A large number of people, around 46 million in the USA alone, are eitheruninsured (Kaiser Commission, 2009) or are not fully covered for medical insurancepurposes. Recent survey evidence suggests that particularly for higher cost treatments,around a third of US patients are willing to travel overseas (Deloitte, 2008; Khoury,2009). Many developed country patients are increasingly familiar with foreign traineddoctors; a quarter of all physicians in the USA today, suggesting that there could

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be greater willingness and acceptance of overseas treatment. At the same time, there isgrowing demand for treatments such as cosmetic and dental surgeries, typicallyexcluded from insurance.

A major stimulus to MT would occur if medical insurance companies included the

option of overseas treatment within their plans. There are tentative signs that some UShealth insurers are willing to consider extending coverage to allow for lower-costoverseas treatment. For example, Blue Cross and Blue Shield of South Carolina haveagreements with a number of overseas hospitals enabling some of their 1.5 millionmembers to choose the option of overseas treatment (Einhorn, 2008b). Blue Shield ofCalifornia, for example, allows patients to seek medical treatment in Mexico (Cox andSood, 2009). Insurers are also facilitating the growth of MT through the development ofcloser links with intermediaries such as Planet Hospital. Insurance companies face anumber of concerns which must be overcome. These include problems in ensuringeffective cross-border continuation of care where patients return home but still requireon-going care. Furthermore, insurance companies have a responsibility to ensure thatall medical providers have the necessary credentials to provide an appropriate level ofservice. While accreditation offers a powerful indicator of quality, comprehensivecredentialing is a complex and difficult process.

It is also the case that some major employers are looking at the option of overseastreatment. General Motors, for example, has sought proposals to provide an overseashealth option for its employees. The Maine-based Hannaford Brothers grocery storechain offers employees the option of having knee replacement operations in Singapore(Twedt, 2008). However, rapid growth in corporate use of overseas healthcare willrequire solutions to the complex challenges that continue to exist.

Characteristics of successful industries in emerging marketsIt is important to understand that emerging markets differ in significant ways from the

more advanced OECD economies. Some of the key differences are in terms of their costand factor conditions, their stages of development economic, social and political and in their business systems (Enderwick, 2007). For these reasons we might expectemerging markets to display marked differences in the types of industry in which theycan attain international competitiveness. In general, we might expect them to havegreater success in industries which are labour and cost intensive, do not requireconsiderable investments in technology and brand development, where strategicdisruption is possible and which have particular appeal to consumers towards thebottom of the pyramid (Prahalad, 2004). The largest emerging markets such as Chinaand India might be expected to enjoy competitive advantage in industriescharacterized by sizable economies of scale. Empirical evidence tends to supportthese expectations. Emerging markets are strong competitors in industries such as

clothing and footwear, toys and simple sports goods where labour is a considerableproportion of total cost (Hanet al., 2009; OECD, 2007). Similarly, a number of studieshave highlighted the technological dependency of emerging markets (Bell, 2006;Hemaiset al., 2005) as well as the very limited number of global brands and companiesemanating from such markets (Dawar and Frost, 1999; Wu and Pangarkar, 2006).Businesses and products originating in emerging markets have had disruptive successin a number of industries including small cars from India, online gaming from Chinaand the low cost net book computers (Prahalad, 2004). At the same time, it is important


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to recognize that there are certain preconditions that must be met before anyinternationally competitive industry can be expected to thrive. The most important ofthese is the achievement of economic and political stability (Enderwick, 2007). Suchstability facilitates consumption and investment decisions and makes the attraction of

foreign technology, ideas and capital possible. The absence of stability, as currentlymanifested by economies including Zimbabwe and Somalia, means very littleindustrial development will occur.

Despite the differences between emerging and developed markets, we might stillexpect the general principles of comparative and competitive advantage to apply. Onewidely utilized framework examining national competitiveness is that of Porter (1998).Porters analysis highlights the importance of four sets of factors: demandconsiderations; factor conditions; related and supporting industries; and strategy,structure and rivalry. This analysis is useful in examining the MT industry.

Demand conditions

Competitive success is more likely in an industry for which there is strong localdemand (Porter, 1998). Such demand encourages innovation, high-quality standardsand the attainment of scale. Certainly in the case of MT, local and regional demand hasbeen instrumental in the development of medical capability. Singapore, for example,has long been recognized as the preferred Asian location for those in the region seekingmedical intervention. Similarly, Thailands leading hospitals draw heavily on local andregional demand (Cohen, 2008). Specialist pockets of demand, such as genderreassignment treatment have created areas of high-level competence, as in the case ofBangkok Phuket Hospital or India in providing cardiac care. Bangkok InternationalHospital has a special Japanese Medical Centre staffed with Japanese doctors andnurses. In addition, rapidly rising costs and increasing waiting lists in developedeconomies mean that emerging markets have appeal for global consumers. As the

earlier discussion indicated, international demand for MT appears to be both strongand stable (Teh and Chu, 2005). International demand is also facilitated by the fallingcosts of cross-border travel as well as the ease of obtaining comparative informationfrom the internet on alternative offerings. Modern media also provides much richerdata with more than simply price comparisons; for example, patient testimonials andsimulated walkabouts of facilities can be accessed.

The Asian region is also likely to experience considerable future growth inhealthcare services (CII-McKinsey, 2002). At present, there are only about 140,000hospitals serving an Asian population of 3.5 billion. With Asias population forecast toreach 5.6 billion by 2050, massive increases in healthcare expenditures are inevitable.The need to replace aging facilities and to upgrade medical technologies will be keyhealthcare expenditure drivers in countries such as China, India and Indonesia. This

will help to alleviate capacity constraints.

Factor conditionsFactor conditions and particularly the quality factor inputs, are recognized by Porter asa key determinant of competitive success. In the case of medical treatment, a number ofemerging economies enjoy strong factor or supply conditions. In many cases, theyproduce considerable numbers of doctors and nurses. Of course, in many developingcountries, qualified medical workers emigrate, seeking better paid positions.

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A second-factor advantage enjoyed by emerging economies is much lower cost.While cost levels vary significantly, on average, medical procedures in locations suchas India and Thailand are perhaps one fifth those in the USA or other developedeconomies (Koncept Analytics, 2008). Labour costs are a significant proportion of total

costs. In the USA, labour costs typically are equal to more than half of hospitaloperating revenue. At the same time, medical costs are rising rapidly in the moreadvanced economies, particularly within the USA (Congress of the United States, 2008;Cox and Sood, 2009). The above average rate of medical cost increase is attributed toadditional expenditure on prescription drugs and technology, an aging population anda shift in the nature of healthcare with a greater preponderance of chronic illness.In those advanced economies which offer subsidized medical care, the result has beenlonger waiting times and lists for treatment.

Emerging economies enjoy several other sources of cost advantage (Herrick, 2007).Major cost savings are likely to result from the way in which healthcare services areorganized in many emerging markets. In comparison with the USA or Europe there islikely to be much less third party, particularly government and insurance, participation inhealthcare services. One estimate suggests that in the US third parties (insurancecompanies, government and employers) account for 87 percent of healthcare expenditure.The comparable figure for a country such as India is just 22 percent (Herrick, 2007).Because patients are less directly involved in the purchase decision there are fewerincentives to seek out the lowest prices. Similarly, providers are less likely to emphasizeprice when competing for business. In summary, third-party involvement inhibitseffective competition. A second factor is that levels of price transparency and disclosureare much higher in emerging markets where package prices for medical tourists arereadily available. This facilitates price comparisons. Price transparency is also facilitatedin emerging market hospitals by the lower likelihood of cross-subsidization wherebypaying patients contribute to the costs of providing charity care. Third, the healthcare

industry is subjectto fewer regulations in emerging market,particularly those thatrestrictcollaborative relationships between physicians and hospitals, above all directemployment arrangements. The Stark Laws in the USA, designed to discouragekickbacks, mean that efficient contracting may not occur (Herrick, 2007). Finally,malpractice litigation costs are likely to be much lower in countries other than the USA(Herrick, 2007). An analysis of these sources of lower cost also suggests that emergingeconomies are likely to be able to maintain these advantages over time.

While emerging markets enjoy a cost advantage, this has not been achieved at theexpense of technology. Despite labour costs, where emerging markets enjoy the largestsavings, being such a large proportion of total cost, investment in leading edgetechnology still occurs. For example, Bangkok Hospital offers Gamma Knife treatmentfor neurological diseases. Bumrungrad International Hospital in Thailand has some of

the most sophisticated information technology and control procedures in the world.Its robot pharmacy distributes medicines to patients with a very high degree ofprecision minimizing the risks of incorrect dosages or provision to the wrong patient.It has also made major investments in automated laboratory facilities and asophisticated computerized health information system.

A third attraction that MT offers to emerging economies is the opportunity todevelop a high value industry which also has strong positive employment effects.The MT sector, particularly when aligned with accommodation and more general


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tourist services, has the potential to add substantially to employment creation. At thesame time, a portion of this employment will be of highly qualified medicalpractitioners and support staff.

Related and supporting industriesOne of the key findings of Porters research on national competitiveness was thatsuccessful industries rarely exist in isolation; in most cases they enjoy competitivebenefits from other sectors, related and supporting industries. In the case of MT, suchbenefits of scope appear to be significant. The very term MT implies a likely linkagewith tourism more generally and in many cases treatment and recuperation time arecoupled. Given the possible medical cost savings many medical tourists are able tocombine treatment and a holiday for less than simply the cost of treatment at home.

In the same way, MT also draws heavily on a countrys transport and education andtraining industries. Potential patients need to be able to travel easily both into andperhaps within, the host country. Countries such as Thailand and Singapore, which

have well-developed tourist sectors, also usually have strong transport industries. Thetertiary education sector provides the supply of medical staff which is essential for MT.We can also identify benefits of scope when related medical services arealso available.

In many cases, patients will seek a combination of services. General hospitals are betterable to deal with international patients with multiple problems or to respond tocomplications. Individual hospital groups are also broadening their scale and scope. Forexample, Indias Apollo Hospital Group now has 8,000 beds, nursing and hospitalmanagement colleges, pharmacies, diagnostic clinics as well as a number of innovativemedical services including air ambulance,medical consultancy and telemedicine. Severalof the hospitals within the group enjoy Joint Commission International( JCI accreditation).

Intermediaries. There are also a number of supporting industries which contributeto the success of a MT sector. One is the emergence of a range of intermediary

organizations which facilitate connections between medical providers and potentialpatients. Medical intermediaries scrutinize healthcare providers and screen customersto assess those who are physically well enough to travel. They comprise four maintypes. One is the traditional hotel group such as ITC-Welcome Group in India whichhas broadened its business portfolio to act as broker between the patient and theprovider. These organizations emphasize the travel and accommodation elements ofMT. Second, a number of travel agencies such as Commonwealth Travel in Singaporehave used their experience in cross-border logistics to expand into MT. In some cases,close alliances have been forged between healthcare providers and travel companies.For example, Bumrungrad Hospital in Bangkok, one of Asias leading hospitals, has apartnership with Diethelm Travel, Thailands leading inbound tourist organization.Rapid growth of MT has encouraged the development of a third group of

intermediaries; dedicated medical travel planners. Specialist companies such asMedRetreat, Planet Hospital, Global Choice Healthcare and BridgeHealth International,act on behalf of potential patients in locating suitable treatment abroad.

MedRetreat, for example, facilitates North Americans seeking treatment in threeAsian destinations and offers trained destination programme managerswho accompany patients to appointments as well as arranging transport andaccommodation. The company has enjoyed strong growth with client numbers triplingbetween 2005 and 2007.

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BridgeHealth International illustrates the brokerage role of intermediaries helpinginsurers, employers and individuals arrange medical travel plans. Fourth, a number ofthe larger medical healthcare providers such as Bumrungrad in Thailand and Apollo inIndia have developed specialized clinical programs for international patients. These

providers build out from the clinical focus to encompass logistics, accommodation andrecuperation time.

Facilitators perform a valued role for both insurers and consumers. For insurers,intermediate facilitators bring high levelsof expertise which canbe usefulin assessing thesuitability of patients and providers. For potential patients or consumers, intermediariesoffer the convenience of one-stop services, a wealth of experience and know-how,assistance with other services and possible savings through their power to negotiate.

Accreditation. In addition to exchange facilitating intermediaries, we also needto consider the role of accreditation organizations. Because medical treatment can beconsidered credence goods, the quality of which is difficult to assess even afterconsumption, it is associated with high levels of risk. Some of this risk is generic: it is therisk that any human being faces with a medical procedure anywhere in the world. Suchrisk typically stems from unexpected complications or deficient procedures. However,whentreatment is provided overseas, further risks must be considered. Where patientsareexposed to a different disease-related epidemiology the risk of contraction of infection maybe high. Uncertainty with regard to the standard of post-operative care as well as thepotential dangers of intercontinental travel soon after a procedure, all add to risk levels.Differences in the availability and effectiveness of complaints policies and legal remediesin diverse locations must also be factored into decision making. Accreditation serves, atleast in part, to remedy such risk levels.

The most highly regarded medical accreditation group, based in the USA is the JCI(2009) which has been offering accreditation of overseas hospitals and other healthcarefacilities since 1999. JCI has approved more than 250 hospitals in more than

30 countries (Twedt, 2008). Also widely regarded is the UK-based Trent InternationalAccreditation Scheme. A number of Asian hospitals pursue dual accreditation in anattempt to offer assurance to both North American and European patients.

Strategy and structureFirm strategy within the MT industry focuses on overcoming the competitivechallenges that arise in a service sector characterized by high levels of risk, the need forcredibility and direct marketing. Much of the competition in healthcare servicesfocuses on non-price factors. While there are considerable differences in the cost levelsof healthcare services provided in developed and emerging markets, there may belimited price competition between competing providers in particular locations. Thisexpectation follows from the nature of credence goods which often may display a

direct, rather than the more common inverse relationship, between price and demand(Dulleck and Kerschbamer, 2006). In such cases, price operates as a signal of quality.Economic theory suggests that in unregulated markets the prices of credence goodsmay be expected to converge. This occurs because suppliers of credence goods tend tocharge relatively high prices for low-value goods where consumers cannot discern lowvalue, while competitive pressures force down the price of high value goods.

Many of the perceived competitive strategies that are used by healthcare providersare designed primarily to increase credibility (Piper, 2010). We have already discussed


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the role of accreditation. There are a number of other strategies commonly observed. Oneis the adoption of advanced technology. An area where emerging markets have mademajor investments is electronic medical records. Electronic data facilitate the remoteevaluation of potential patients and reduce the risk of interpretation error. Only about

one-quarter of US hospitals have adopted an electronic format for patient data.A second competitive strategy is hospital affiliation, under which an emerging

market hospital aligns itself with a world-class institution, usually in the developedworld. Examples include the affiliation between Indias Wockhardt and HarvardMedical School. The International Medical Centre in Singapore, which is JCI accredited,is also affiliated with Johns Hopkins International. Such affiliations offer access toleading edge practice, research and positive reputational effects. Increasingly, a numberof emerging market hospitals are building collaborative relationships with regionalcompetitors. For example, Indias Max Healthcare draws upon the expertise ofSingapore General Hospital in areas such as medical practices, training and research.

A third observable strategy is the publication of physician credentials. A large

proportion of doctors with Western training or experience may be used to signal a highlevel of quality and competence. While all the doctors at Thailands Bumrungradhospital are Thai nationals, more than half have international training or overseascertification, including 200 with US board certification.

A fourth strategy emphasizes the possibilities opened up by modern informationtechnology and online communities. This has enabled the creation of sophisticatedweb sites which offer both information and interaction. Indias Wockhardt HospitalGroup for example, has a web site which offers factual information as well asopportunities for live chats, patient video testimonials, consultation for a second opinion,as well as a virtual tour of facilities. This is supported by a contact centre in Bangalorethat operates 24/7 and toll-free phone help lines in major markets including the USA,Canada and the UK. Also, increasingly available are online communities which offerelectronic word-of-mouth assessments where potential patients can search fortestimonies of patients who have experienced overseas treatment. Examples includePlastic Surgery Journeys.com or Health Medical Tourism.org. In addition, attempts tooffer differentiated services focus on quality factors such as useof evidence-based clinicalguidelines, coordination of pre- and post-discharge care and provision for adverse eventsrequiring services unavailable at the particular facility. Such capabilities are designed tooffer consumers assurance of quality and safety (Wockhardt Hospital, 2008).

One of the strengths of emerging economies in developing MT is the considerablerivalry that exists in these markets. First, there is strong competition betweenlocations. As mentioned earlier, at least 50 countries claim to possess an internationallycompetitive MT sector. Second, there is intense competition between providers in the

Asian region, particularly between the major suppliers in India and Thailand. Third,the real growth in MT has come from private hospitals and there exist strongincentives for further development. All successful markets are characterized by highlevels of internal rivalry. India, for example, has 3,000 hospitals but a smaller numbersuch as Apollo, Wockhardt, Fortis and Columbia Asia dominate MT. Thailand, withmore than 400 hospitals offering advanced healthcare services has eight JCI accreditedproviders including Bumrungrad, Bangkok Hospital, Piyavate and Samitivej. Privatehospitals within Malaysia account for just 20 percent of beds, but more than 50 percent

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of doctors. Such competitive pressure ensures that costs are contained, new technologyis readily adopted and that service is emphasized.

Government and chance

Two further elements included in Porters analysis are government and chance. There isevidence of both at work in MT. Government has played a significant role in the MTsector of a number of emerging nations, primarily in facilitating scale and scope and ininternational marketing of capability. In 2003, the Singaporean authorities createdSingapore Medicine, a government-business partnership which brings together relevantorganizations and promotes Singapore as an international medical hub offeringtreatment, research, conventions and education in the medical field. Similar governmentinitiatives to facilitate medical clusters can be found in Taiwan, Thailand and India.

Other government decisions can also facilitate or hinder cross-border MT. Thailandhas enabled medical tourists to stay for 30 days without a visa and to arrange withrelative ease, any necessary extension. Criticism of relative inefficiencies in theissuance of visas in India encouraged the creation of an M Visa available to foreignersseeking medical treatment. The South Korean Government has recently changed thelaws to allow hospitals to use advertising agencies to target medical tourists.

Complex trade-offs exist in the adoption of domestic regulations affecting MT.For example, a successful MT industry requires effective controls on the illegal practiceof medicine. At the same time, approved doctors should be board certified. Differentialregulation can also be used to bestow competitive advantage within service industries(Enderwick, 1989). For example, Singapores Living Donor Liver Transplantprogramme at the Gleneagles hospital attracts a significant percentage of overseaspatients, in part because unlike many other countries, including India, Singaporesregulations permit transplants between partners who have an emotional link. While theethics of each case is carefully assessed, such legislation does enable a differentiated

position to be developed. On the other hand, government policy can add significantly tocosts and difficulties. A recent proposal to tax cosmetic surgery in India (InternationalMedical Travel Journal(IMTJ), 2009) caused concern within the sector that they wouldsuffer a competitive disadvantage within the region. At the same time, a recent proposalto introduce a 5 percent tax on such surgery in the USA, designed to help finance theproposed healthcare overhaul, was seen as a stimulus to outbound MT.

Competitive position of Thailand, Singapore, Malaysia and IndiaWhile Porters diamond of national competitiveness is a useful framework forexamining the development of the MT industry, it does have a number of limitations.One is that it appears to be of limited value when examining the maintenance orupgrading of competitiveness over time (Grein and Craig, 1996). This confines its value

in understanding how Asian providers such as India and Malaysia might move beyonda competitive position based principally on cost. Second, concerns have been expressedregarding the validity of assumptions which underpin the model. Specifically,ideas developed in the 1980s assume strong levels of competition, comparatively stablemarket structures and primarily cyclical fluctuations in business activity. Porterswork, developed inductively, focuses on actual situations and assumes predictablesources of change through well-understood processes of new entrants or the rise ofsubstitute products. Much has changed in the last 30 years and the growing


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importance of digital technologies, global competition and government deregulationhas created new competitive dynamics (Downes and Miu, 2000; Shapiro and Varian,1998). These emerging conditions highlight many of the characteristics of industrydynamics noted above, particularly the instability, complexity and dynamism of

competition. Clearly, to fully understand the evolution of competitiveness in MT amore dynamic framework would be desirable.

As discussed earlier in the paper, the MT industry has enjoyed strong growth in theemerging markets in recent years and numbers are now significant as shown in Table II.

Amongst emerging economies, the markets that have seen the most prominentgrowth are India, Singapore, Malaysia and Thailand as outlined in Tables I-III. MT inthese markets is projected to be worth almost US$6 billion by 2012 (Table III) (www.hotelmarketing.com 2006). The Asian MT market is expected to grow at a compoundaverage growth rate of 17.6 percent between 2007 and 2012 (Companiesandmarkets.com,2010). Such growth projections may be rather optimistic in the light of the recent globaleconomic recession. There certainly appears to have been a slow down in the industry.For example, the number of Americans travelling abroad for medical care droppedfrom 750,000 in 2007 to 540,000 in 2008 before recovering to 648,000 in 2009.However, there is a view that suggests that recovery will be rapid as pent-up demand,particularly for cosmetic and elective procedures rebounds (Deloitte, 2009).

The growth experienced by these markets is perhaps because consumers indeveloped economies are not satisfied with health providers and insurers and nowhave the opportunity seek such services on a global basis. Although these marketscompete on the basis of price, each of them is seeking to develop particular niches. Forexample, the Bangkok International Hospital has a special Japanese Medical Centrestaffed with Japanese doctors and nurses that cater to the growing number of Japanesepatients (Health Tourism, 2009a). India has built its reputation on the back of itsextensive experience and links within the pharmaceutical sector which have made the

market a prominent base for drug testing. For instance, the Apollo hospital group isinvolved with major pharmaceutical companies for drug testing and also subcontractsoperations and medical tests for Britains National Health Service. This increases thecredibility of services offered by hospitals like Apollo in India.

The growth of MT experienced by these economies in particular is indicative of a newbusiness model that is driving change within the medical services sector. Traditionally,healthcare focused on the medical service providers rather than patients. However, withderegulation and opening of these markets the focus has shifted from providers topatients and services that they require at a range of prices. In addition, medicalorganizations,hospitals and companieshave increasingly open networks and interactionwhich has allowed greater awareness of standards and options amongst patients.

In addition, facilities in these markets show greater responsiveness to the needs of

specific client groups. For instance, many hospitals in Thailand and Malaysia havespecial prayer rooms and Halal food for their Muslim patients. These servicesare designed to provide the patients with the familiarity of home in an alien environment(Cohen, 2008). Perhaps, one of the main attractions of these emerging markets is the factthat the services rendered cater to different needs. For instance, quality is the mainattraction for patients coming for treatments from parts of South East Asia, Middle Eastand Africa, while cost savings and ease of access are the primary reasons for mostwesterners seeking medical services in these markets. The examples discussed in this

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Markets

Highlights

Com

petitiveadvantage

Drawbacks

Thailand

Oneofthemo

stpreferreddestinationsforMT

The

markethasanorganicapproach

targetingaparticularniche.Thehospitals

offerhighqualitytreatments.Thecountry

also

hasthelargesthospitalinAsia(Bangkok

Hospital)and(Bumrungrad)wasthefirst

Asia

nhospitaltoreceivetheISO9001

certificationandJCIaccreditation(Thai

Web

site,2009;HealthTourism,2009a)

Variabilityinthequalityofmed

ical

professionals.Discrepanciesintheservices

provided.Thecountryhasalsos

ufferedfrom

politicalturmoilinrecenttimes

Thetreatmentsaremoreexpens

ivethanin

India

SingaporeHealthcareinfrastructureiscomparablewith

thatoftheW

esternworld

Sing

aporeoffersservicesthatareonparw

ith

Wes

terncountries.Thecountryalsoprovides

acleanandstructuredenvironmentwhichis

attractiveformanyWesterntouristsin

particularasitminimizescultureshock.

Sing

aporehas11hospitalsthathaveJCIand

seve

nthatareISO9001-2000certified(Health

Tourism,2009b).Thereisalsoarangeof

(Chinese)alternativemedicineclinics(herbal

and

acupuncture)

ThemostexpensivetreatmentsinAsia

(continued)

Table I.Comparative position

of Thailand, Singapore,Malaysia and India in MT


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Markets

Highlights

Com

petitiveadvantage

Drawbacks

Malaysia

RisingprominenceofMTinthecountryis

makingitan

attractivealternative

Malaysianspecialistsrankamongthebes

tin

theworldintermsoftrainingandexpertise.

Med

icaltouristsareattractedtothecountry

due

toitsfavourableexchangerate,political

and

economicstabilityandhighrateof

literacy.Malaysiahassixhospitalsthata

re

JCIaccreditedand35privateprovidersth

at

haveISO9001-2000certified(www.hospitals-

malaysia.org2009).TheGOVERNMENT

of

Malaysiahastakenaproactiverolein

prom

otingthecountryforMT.Forexample,

itha

simplementedaGreenLaneSystemto

expediteclearanceformedicaltravellersinto

Malaysia(www.hospitals-malaysia.org2009).

The

facilitieshavestate-of-the-artequipm

ent

and

amongstothertreatmentshaveastro

ng

repu

tationfordiagnostic,curativeanddental

serv

ices

Politicalunrestincertainpartsofthecountry

makestravelriskyforwesternersin

particular

India

TheIndianM

Tindustryhasanincreasingly

outwardfocusandisgaininganinternational

reputation

The

industrytakesprideinofferingahig

h

levelofinternationallyqualifiedpersonnel.

The

countryalsohasextensiveexperience

with

medicaloutsourcingandhasstrong

linkswiththepharmaceuticalsector.India

serv

esasagoodoptionforelectivesurgery

and

lowcostofthetreatmentsmakesit

attractivefortheuninsured.Themarkethas

builtaspecialistreputationinheartsurgery,

hipre-surfacingandinfertilitytreatments.

Reju

venationopportunitiesthroughyogaand

ayurveda

Suffersfrompoorinfrastructure.Inefficient

processingofmedicalvisasand

registration

oftouristsadverselyaffectspotentialpatients

wantingtotraveltoIndiaformedicalreasons

Table I.

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section suggest that the facilities in these markets have assumed healthcareconsumerism which supports the idea that individuals seeking treatments shouldhave more control over their decisions. However, despite the potential of MT in thesemarkets there are issues.

Concerns with MTThe growth of MT raises a number of concerns and there are a several controversiesthat an emergent country entrant would need to address.

The first major area of controversy is the likelihood that MT will exacerbateexisting inequalities in access to healthcare. We can envision a number of sources ofinequality. One is the implicit assumption that underpins the growth of MT thatconsumers will take increasing responsibility for their health and wellbeing. While theinternet offers access to vast amounts of data, comparative costs and alternativeproviders, internet access varies significantly between countries in terms of literacy,access and openness. This suggests that opportunities for MT will be uneven, notsimply because of income differences, but also because of information asymmetries.

A second source of inequality is that the growth of a successful MT industry couldoccur at the expense of domestic healthcare. Fears focus on the attraction of medicalpersonnel from the public to private health providers and of rising costs and prices.Certainly, for many emerging economies there is likely to be a significant gap instandards between the domestic and the cross-border market. Medical tourists areattracted to the latest technologies and luxurious facilities. Such conditions rarely prevailin the domestic market. For example, fewer than half of Indias primary health centreshave a laboratory or a labour room, two-thirds lack adequate stocks of essential drugsand less than 20 percent have a telephone connection. Inadequate funding, a lack ofqualified staff andrampant corruption allmean that quality healthcare is deniedto many.This is in sharp contrast to private hospitals catering to international tourists where the

Country Latest year Number of medical tourists

Thailand 2009 1,200,000Singapore 2008 646,000Malaysia 2007 341,000India 2007 450,000

Sources:Mitra (2007); Companiesandmarkets.com (2010)

Table II.Significance of MT in

Thailand, Singapore,Malaysia and India

Country Projected value ($)

Thailand 1.8 billionSingapore 1 billionMalaysia 590 millionIndia 2.4 billionTotal 5.8 billion

Sources:Mitra (2007); Companiesandmarkets.com (2010)

Table III.Projected growth in the

value of MT in Thailand,Singapore, Malaysia

and India (2012)


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Confederation of Indian Industry certifies hospitals. While such hospitals are expectedto hold down prices for the domestic population through higher pricing for medicaltourists, charges are still well beyond levels affordable by the vast majority of Indians.

However, the Apollo Hospital group in India does make provision for poorer

patients. It has set aside free beds, created a trust fund and is pioneering remote,satellite-linked telemedicine across India. More generally, there is a broader question ofwhether the relatively affluent medical tourists are widening the gap between domesticand now international health access (Bagadia, 2009). It may also be the case that theprincipal negative impacts of the growth of MT fall on the more affluent domesticpatients who may not wish to use the public health system but increasingly findprivate hospitals unaffordable.

The counter to many of these concerns is the idea that trickledown effects will bringwider benefits to India. In its most general form this could occur as a successful MTsector adds to GDP and to potential government spending on healthcare. Morespecifically, the growth of private healthcare facilities could halt or reverse medicalbrain drain and the presence of sophisticated medical technologies and highly skilledpersonnel might be expected to generate positive spillover effects. Investments inmedical equipment, training and organization might eventually benefit the populationat large.

A second major area of concern is medical ethics. Ethical issues arise in a number ofareas. One fear is that a growth in MT will encourage illicit trading in human organsand it will be the very poorest who are exploited. Organ transplant tourism ofteninvolves organs from live donors who act, not from altruism, but because they are poor,vulnerable, or easily coerced. One study found a majority of Indian donors were belowthe poverty line and 96 percent sold a kidney to pay off debt (Shimazono, 2007). Thesuccess of organ transplants has resulted in a supply side shortage in developedcountries and encouraged transplant commercialization to circumvent waiting lists.

The ethical boundaries which constrain decision making in the developed countriesmay not exist in emerging markets. A further contentious ethical issue is the use ofexperimental treatments of critically ill patients with procedures not yet authorized inWestern countries, such as stem cell research. These could be used to create a leadingposition in an embryonic field.

A third area of concern mirrors the apprehension that is often expressed aboutoffshore sourcing: the possible negative effects on home country output andemployment. In the case of MT, it is demand (patients) that is being diverted overseas.This could have a negative impact on medical personnel in markets such as the USAand Europe, if a significant amount of demand shifts overseas (Bies and Zacharia,2007). Because of the considerable cost differences between developed and emergingmarkets, there is likely to be a sizeable negative multiplier effect. For example, if US

patients spend $3 billion on overseas healthcare this represents something like$15 billion in revenue to US healthcare providers. However, for two principal reasonsthis may be an overly negative assessment. First, the demand for healthcare appears tobe almost unbounded and it could be argued that overseas sourced services actuallycontribute to satisfying unmet demand. Second, technological changes mean that thepresent pattern of MT may be simply a transitory stage. In the future, it may bepossible to automate many routines, with likely cost reductions and increased capacity,reducing the need to travel overseas (De Arellano, 2007).

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Conclusions and future researchOur discussion of the suitability of MT as a competitive sector within Asian emergingmarkets suggests a number of conclusions. First, while considerable controversysurrounds the exact magnitude and growth rate of MT, there is little doubt that

globalisation of healthcare is occurring. MT is one part of a more general globalisationof medical activities. Such globalisation, while facilitated by technologicaldevelopments, particularly the falling costs of travel, communication and control,is driven by consumer frustration with national healthcare systems characterized bylong waiting lists or spiralling costs. The shortcomings of public health systemscoupled with new opportunities to source services overseas, has brought competition tonational healthcare structures. At this stage, it would be more accurate to describe therise of emerging economies in the MT sector as evidence of the globalisation ofhealthcare competition, rather than presenting a disruptive innovation.

A second conclusion is that the Asian emerging markets we have considered are allenjoying strong growth in the area of MT. This growth is based on budding healthcareconsumerism, the idea that individuals will have greater knowledge of and control over,healthcare decisions. Of course, disparities in information access and income mean thatthis is unlikely to be a comprehensive process and may well contribute to growinginequality in access to leading edge medical services. Much of this growth may beunderstated and in particular, may be overlooked by healthcare providers in developedmarkets. This is because many patients when advised of the need for treatment simplynever return. The traditional assumption that the patientdecided to forego the proceduremay be increasingly tenuous. In deciding to seek treatment abroad, the average medicaltourist spends US$362 per day, compared with the typical tourist of just US$144 per daymeaning MT offers significant value adding (Lopez, 2009). For these reasons,MT appears to offer several attractions for emerging economies.

Third, when we consider the competitive position of the major Asian emerging

economies in MT, a picture of remarkable similarity surfaces. All are competing on thebasis of a significant cost and price advantage and all are offering a comparable range offull care services. There is just tentative evidence of the development of niche offerings.As mentioned above, Thailand is building an international reputation for genderreassignment treatment, India for cardiac care and Singapore for the application ofsophisticated technology. Given the very small size of its domestic market Singapore hasbeen the most proactive in building specialist capability. It is seeking to build a regionalmedical hub and is actively sending its leading doctors to world class centres through itsHealth Manpower Development Programme. This combination of leading capabilityand a high level of medical tourists will enable Singapore to maintain a critical mass inimportant but low volume services such as liver transplants. This suggests thecompetitive benefits for developing more strongly differentiated positions, perhaps

most effectively based on the enhancement of particular areas of expertise.All four countries are attempting to integrate medicine with more traditional tourism

to offer price competitive packages. Singapore, perhaps the least advantaged in terms oftourism options, is broadening the appeal of MT through education and medicalconventions. Government plays a major role in the development of MT in all cases. Theirrole is both an informational one (promoting medical services, facilitating accreditation)and a capacity building one (encouraging clusters, overcoming infrastructuredeficiencies and tackling market failures). All international MT competitors seek


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to address the credence nature of medical services through common strategies,particularly Western-based accreditation. These similarities suggest that while MT isstill a nascent industry for emerging economies, its future development is likely to seeincreasing differentiation and a move by leading competitors to add value. The network

relations between emergent medical providers and the accreditation and legitimacyoffered by more established healthcare providers, highlights the considerableinterdependency in the industry. There appear to be mutual benefits in nurturingsuch relationships which effectively promote consumer choice.

A fourth conclusion is that emerging markets face similar challenges whencompeting for medical tourists. One is the difficulty of attracting overseas clients,particularly when source countries have limited knowledge of the range, cost andquality of medical services offered by emerging markets (Cohen, 2008). This isparticularly difficult when it is recognized that the majority of patients are repeatconsumers or take up services recommended by a friend. A further major challenge isexpanding capacity without sacrificing quality. This challenge is reported byThailands leading MT provider Bumrungrad Hospital, where overseas patients are42 percent of volume but 55 percent of revenue (Knowledge@Wharton, 2009).All competitors struggle to find the appropriate combination of medical and tourismservices. Various models are apparent teaming up with airlines, tourist agencies,even establishing direct links and no clearly superior arrangement is apparent yet.

Fifth, it is apparent that the growth of MT is bringing more general change to themedical services sector. In some cases, new business models are discernible. We canclearly see a change in domestic medical systems from closed to much more open andnetworked ones. No longer is it the case that Western countries are always the leaders inmedical research, services and technology; increasingly a number of emerging marketsare strong competitors. Patients increasingly travel for treatment, beyond their region orprovince to explore global standards, prices and offerings. At the same time, individuals

are progressively more responsible for managing their wellbeing and healthcare. Theyare increasingly opting for discretionary interventions such as dental and cosmeticsurgery. The deferring to medical professionals operating within an enigmatic process ofreferrals, priorities and self-regulation is no longer the only choice many patients enjoy.

In a similar vein, MT is altering perceptions of how medical facilities should bedesigned and managed. Leading international hospitals look more like first-class hotelswith welcoming public spaces separated from treatment areas, offer high levels ofcustomer service, promote consultative doctor-patient relationships and utilizeminimally invasive technologies to create so-called hotelspitals (Cohen, 2008). Thesechanges to traditional business models suggest that there may be attractive openings forinnovative emerging economy firms to establish alternative service offerings.

Sixth, it is likely that health providers in the developed countries will react to the

mounting competitive threat presented by the growth of MT. Some will consolidatetheir eminent positions in medical research and practice, utilizing such advantages inthe achievement of collaborative arrangements or direct expansion into emergingmarkets. Governments will also pursue reforms to try to improve efficiency andeffectiveness in the delivery of medical services. Future competitiveness will hingearound decisions by major medical insurers and their receptiveness to coveringoverseas treatment. Increased flexibility and mobility in the recognition of licenses andboard certification could allow more effective utilization of high-cost medical staff.

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Within the USA a review of the federal Stark Laws which limit direct relationshipsbetween physicians and providers and in the handover of patients from overseastreatment centres. In the light of the growing globalisation of healthcare services, theusefulness of such laws requires reconsideration. The more general overhaul of the US

healthcare system will be pivotal to the future of MT and the outsourcing of relatedmedical activities. Emerging economies cannot simply assume that MT will be a sectorwhere they will have unfettered access; competition and collaboration are both likely toincrease and to become more complex.

Finally, the long-term future of MT is by no means clear. It may be that MTrepresents a transitional phase between the formerly closed healthcare systems of thelast century and a future of a fully globalised medical system with remote roboticoperations controlled from and provided, at low cost anywhere in the world. In theinterim, we may expect to see the leading international medical providers expand theirofferings to the broader field of general healthcare and into wellness. These hospitalsmay internationalize their operations into neighbouring countries and will increasinglyattract outsourced specialist medical services including diagnostic work, managementof patient records, drug testing and research and the pioneering of new controversialprocedures. Such opportunities will enable successful competitors to add valuewhether directly in the medical field or in related vacation activities and to movebeyond being simply the lowest cost providers.

While our discussion has shed light on a number of facets of MT and their attractionfor emerging economies, there is still much that is not well documented. First, there isconsiderable controversy regarding the precise number of medical tourists. Estimates,particularly of the number of Americans travelling overseas for treatment, varywidely. While it may be difficult to separate out medical tourists from the broadergroup of general tourists, more accurate data would be helpful.

Second, the complex welfare effects of the outsourcing of healthcare are not clearly

understood. While such an option may increase consumer choice, improve theincentives for medical professionals to remain in their home countries and stimulatetechnological upgrading of local facilities, the impact on home country providers andaccess of host country locals to quality healthcare is unclear (Hazarika, 2010; Terry,2007). Further analysis of these questions is urgently required.

Third, it is important to acknowledge the limitations of this paper. It provides amere overview of the industry with a particular focus on the primary emerging Asianproviders of MT services. This perspective is drawn from fragmented, but existing,secondary data. A key limitation is that we do not have any consumer or user data.We are not able to analyse the experiences of users of MT services and in particular,their perceptions of the competitive strengths of various providers. This is animportant shortcoming and further work to provide a more balanced analysis is

required. We would also benefit from more detailed case studies of the competitivestrategies of successful providers which could provide a complementary firm-levelperspective to the more general analysis offered in this paper. The emergingMT industry is an area where further work is needed.

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Corresponding authorPeter Enderwick can be contacted at: [email protected]

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