Arun Verma- Porter's Five Forces in Health Industry

1765 words 8 pages


Porter’s Five Forces Model w.r.t. Health Care Industry


Submitted to : Submitted by :

Anju Saini Arun Verma

Faculty Roll. No. 26

Section: R1011



This assignment is basically focused on the study of the Porter’s Five
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The Capital requirement in case of health care Industry is very heavy and thus involves a lot of Risk. This risk of capital is also a major cause of the entry of new Entrants in the Market.

2. Bargaining Power of Suppliers

Differentiation of inputs means that different suppliers provide different input characteristics for inputs that basically do the same job. The greater the degrees of differentiation among suppliers the more bargaining power suppliers have. For Example: If any company manufactures a new medicine that can cure most of the diseases, then unlike rest of the suppliers of the other medicine, that company would be having much more bargaining power and can ask for any amount of Money for the required Medicine.

Presence [and availability] of substitute inputs means the extent to which it is possible to switch to another supplier for an input (or a close substitute). The greater the number and closeness of substitute inputs the lower the bargaining power of suppliers. The exact answer to this question is already cleared by the above example, if there are no substitutes in the market, then the product can be charged at any price.

Supplier concentration is the degree of competition among suppliers. Usually the more concentrated the industry, the fewer suppliers and the more control suppliers have over the prices they charge.