Competition in the Healthcare Industry

945 words 4 pages
Competition in the Health Care Industry
Kelly Montagano
Health Care Planning and Evaluation
Instructor Sowle
November 25, 2011

The driving force for any kind of business or organization is competition. Without competition there would never be a need to grow or to better the services or products being offered. In the healthcare industry competition takes many different forms and happens within many different types of healthcare organizations. Competition can take place among hospitals, health plans, physician groups, drug companies, between hospitals and physicians, between hospitals and health plans, and many more. Competition drives companies to work at their full potential as well as constantly evaluate their business strategy.
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These could be existing businesses in other industries that see opportunities for expansion and growth in a new industry. Or entirely new businesses may choose to start up in the industry.
The third force described by porter is the availability of equivalent, substitute products. One of the primary reasons consumers may be drawn to substitute products is that they seem to offer more performance for the price, or the same performance at a lower price, than the industry’s current products. The fourth force is bargaining power of buyers or customers, and the fifth is the bargaining power of suppliers or employees (Moseley, pg 110-112).
Knowing a competitors strengths and weaknesses can help a firm gain information that will help in knowing how best to serve their customers. It is not easy to gather information about a competitor’s strategic capabilities and intentions. The firm must commit to the creation of a formal and permanent competitive intelligence-gathering program, even if it consists of nothing more than the part-time efforts of a clerk in the marketing department; strategic possibilities are constantly evolving. Always being one step ahead of the competition will give a company a great advantage. Information can be gathered from internet resources and company sites, health care specific web-sites, corporate public relations announcements, mandatory reports filed with public agencies, and the American medical association; just to name a few.


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