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Five Force Analysis on HCA Healthcare, Inc.
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Five Force Analysis on HCA Healthcare, Inc.
Five Force Analysis
The threat of New Entrants
The matter of fact is that when it comes to new entrants in Hospitals, they tend to bring innovation along with new ways to perform certain things. One thing that must be taken into consideration is that new entrants put pressure on HCA Healthcare, Inc.
Bargaining Power of Suppliers
There is no doubt that the majority of organizations in the Hospital industry tends to buy their raw material from a number of suppliers. The matter of fact is that suppliers in the dominant positions can be seen decreasing the margins in the HCA Healthcare, Inc. which may result in making them earn in the marketplace (Rothaermel, 2015).
Bargaining Power of Buyers
When it comes to buyers, they are often seen demanding a lot. The aim of buyers is to buy the best available offerings by paying as less as they can. Due to such acts, there may a great pressure on HCA Healthcare, Inc profitability in the long run.
Threats of Substitute
The time when there is seen a new service or product meets a similar customer needs in a number of ways, it results in the profitability to suffer. The best example in such a scenario would be of Google Drive and Dropbox that are a substitute for storage hardware devices. There is no doubt that the threat of substitute is quite high in a scenario where the value proposition is high.
Rivalry Among the Existing Competitors
One thing that must be taken into consideration is the fact that in case if the rivalry among the existing players of Hospital industry tends to become intense, it may result in decreasing the overall profitability and driving down prices of the industry (Page et al., 2015).
Factors Driving Five Forces
When it comes to the five force analysis on HCA Healthcare, Inc., there is no doubt that there is a presence of certain factors that drive each of those five forces.
Products
Considering the threat of new entrants, there is a high need for HCA Healthcare, Inc. to innovate new services and products. The reason for that is quite simple as it may help the organization to bring new customers and give old customers a reason for buying HCA Healthcare. Inc.'s products.
Supply Chain
In the current scenario, HCA Healthcare, Inc. needs to build an efficient supply chain with multiple suppliers in order to deal with the bargaining power of suppliers. The organization should develop dedicated suppliers whose business is dependant on the firm (Birken et al., 2015).
Customer Base
In terms of Bargaining Power of Buyers, Healthcare, Inc. should build a large base of customers. The reason for that is quite simple as it may help the organization to reduce the bargaining power of suppliers. Apart from this, an opportunity will be provided to the organization for streamlining its production and sales process.
Service Oriented
Dealing with the threat of substitute services or products, HCA Healthcare, Inc, can become service oriented instead of being product oriented only (Birken et al., 2015). The organization can deal with this force by increasing the switching cost for the customers. Apart from this, another approach would be to understand the core need of the customer as well.
Sustainable Differentiation
When it comes to the intense rivalry between the existing competitors, HCA Healthcare, Inc. can overcome the force by building scale for competing better. Moreover, sustainable differentiation can also be built. In the current scenario, HCA Healthcare, Inc. is in a high need to collaborate with competitors. The matter of fact is that the collaboration will result in increasing the market size.
References
Birken, S. A., Lee, S. Y. D., Weiner, B. J., Chin, M. H., Chiu, M., & Schaefer, C. T. (2015). From strategy to action: how top managers’ support increases middle managers’ commitment to innovation implementation in healthcare organizations. Health care management review, 40(2), 159.
Page, D. B., Donnelly, J. P., & Wang, H. E. (2015). Community-, healthcare-and hospital-acquired severe sepsis hospitalizations in the University HealthSystem Consortium. Critical care medicine, 43(9), 1945.
Rothaermel, F. T. (2015). Strategic management. McGraw-Hill Education.
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