In early 2016, Orpea Group (Orpea) opened its first facility in China in Nanjing, Jiangsu. At that time, Orpea, based in France, was the European leader in long-term care—nursing homes, post-acute and rehabilitation hospitals, psychiatric hospitals, and home care services—with a global network of more than 700 facilities in ten countries. Nathaniel Farouz, chief executive officer (CEO) of Orpea China, saw tremendous demand for dependency care in the Chinese market due to the country’s aging population.
He wanted to bring Orpea’s competencies as the European leader in the dependency care business to China. He sought further expansion opportunities in the Chinese market, and his ultimate goal was to make Orpea an industry leader in this emerging industry in China. However, there were significant differences between China and France in terms of cultural and legal institutions, as well as market conditions.
Orpea’s expansion in China was more challenging than its previous expansions in European countries had been. As CEO of Orpea China, Farouz faced the critical questions of how to attract potential customers to Orpea’s Nanjing facility and whether to expand further into other Chinese cities. If Orpea were to expand further in China, where should it expand, and at what pace?
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