The Porter’s Five Forces Model

The Porter Five Forces model is a competitive analysis framework for assessing the attractiveness and profitability of an industry by analyzing its competitive environment. The framework involves different competitive factors. Firstly, the threat of new entrants, which investigates how challenging it is for new businesses to get into the industry. Secondly, the bargaining power of buyers involving the leverage purchasers has during price and conditions negotiations. Thirdly, the bargaining power of suppliers, which describes the suppliers’ ability to establish pricing and impose conditions on the distributors. Suppliers often have greater leverage when there are limited alternatives or when switching costs are high. Moreover, the threat of substitutes for products or services considers how readily available substitutes are to consumers (Anastasiu et al., 2020). Finally, rivalry among existing competitors characterized by factors such as price wars and advertising expenses describes the scope of the industry.

The factor for Each of Porter’s Five Forces

Porter’s Five Forces apply in the healthcare industry in different ways. For example, stringent regulatory procedures necessary to open a new hospital or healthcare center are a major obstacle for new entrants in the healthcare business. Concerning supplier bargaining power, the limited number of suppliers and the complexity of the healthcare supply chain allow the suppliers’ industry to have more leverage in negotiations. In a different context, insurance companies and government requirements increase buyers’ bargaining power in the healthcare industry. Similarly, patients have several substitute products and services in healthcare, including natural treatments, self-diagnosis using internet tools, and visits to chiropractors and homoeopaths (Anastasiu et al., 2020). Finally, the number of healthcare providers, the quality of their services, and the competitiveness of their pricing all contribute to the industry’s competition level.

McKesson Automated Healthcare

Regarding the Peterson Center on Healthcare competitors, like McKesson Automated Healthcare, new entrants pose an insignificant threat to established businesses, such as the Peterson Center on Healthcare. Comparatively, new entrants pose an insignificant threat to McKesson Automated Healthcare. Additionally, McKesson Automated Healthcare’s suppliers have high bargaining power, and the company’s scale and market position may provide it leverage in price negotiations. Buyers from the two organizations have high bargaining powers if they already have connections to other suppliers of automation systems.

References

Anastasiu, L., Gavriş, O., & Maier, D. (2020). Is human capital ready for change? A strategic approach adapting Porter’s five forces to human resources. Sustainability, 12(6), 2300.