Competitor service area analysis is the process of researching on and organizing the company strategy with reference to businesses operating in the same area or those offering similar products and services (Ginter, Duncan, & Swayne, 2013). For a long time, businesses have engaged in competitor service analysis. The major influential factor in the shift to competitor analysis is the rise in bed spaces and general health care facilities in recent decades that have led to the competition for clients. Today, there are hospitals, clinics and other health care facilities that strive to gain competitive advantage over their rivals. In the past, the main motivation for the operation was just to fill the demand for medical care. This paper examines competitor service area analysis as a key strategy in enhancing the chances of success in any particular business venture, the medical field included.
Many information categories are essential in this analysis. These include the general, offensive and defensive competitor information. These categories have the capacity to help the investor with the rationale to collect information, besides making well-thought strategic decisions. For instance, general competitor information (GCI) aids the investor to steer clear of surprising situations in the market while ensuring every individual in the organization is aware of the competition in order for them to respond effectively (Ginter, Duncan, & Swayne, 2013). Additionally, GCI can help the organizations benchmark their competition while concurrently informing strategic decision-making within all levels in the organization. Offensive competitor information, on the other hand, points out market inconsistencies and niches and helps the management determine and implement their strategy. Defensive competitor information helps the organization predict the competitions next moves and shortens the response-period.
It is important to clearly define a service area in order to understand where the target customers are and will come from. For a hospital, one must understand the surrounding community vis-a-vis their projected demand for medical care. Additionally, defining the service area helps the investor realize the size of the target market for their product(s). Knowing the size of the market should also help convince investors when seeking resources as the latter will have almost accurate estimates of the amount of resources they will invest. Moreover the business owner understands clear the customers needs. Different customers have different ideas on what qualifies as good service. Learning their behavioral patterns can help the investor fine-tune their product(s) to fit such needs appropriately. Finally, all the above reasons contribute towards the creation of a formidable marketing plan which targets the specific market with all the information collected above in mind.
Managed care penetration emphasizes on quality of medical care through ensuring the prevention, screening and treatment of various diseases and medical conditions. This is based upon research evidence, proper coordination and efficient use of funds to foster a win-win situation for both investors and customers in the field of medical care (Chernew, DeCicca, Town, & National Bureau of Economic Research, 2008). Managed care penetration affects service area definition in that understanding the target market ensures a full understanding of the climatic conditions the customer base is subjected to, therefore the common medical conditions that affect the majority of them (Chernew, DeCicca, Town, & National Bureau of Economic Research, 2008). Ensuring the prevention of, say, cancer would mean that the investor installs cancer screening equipment, treatment machines and probably counseling facilities for those affected.
In conclusion, service area definition is an area that has grown over time in other industries but has recently spread into the medical field as well. Various reasons inform the need for service area definition, but all of them lead to one point: understanding the target market and focusing the business on their needs.
Chernew, M., DeCicca, P., Town, R. J., & National Bureau of Economic Research. (2008). Managed care and medical expenditures of Medicare beneficiaries. Cambridge, MA: National Bureau of Economic Research.
Ginter, P. M., Duncan, W. J., & Swayne, L. E. (2013). Strategic management of health care organizations. San Francisco, CA: Jossey-Bass, Wiley.
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