Breast cancer ultrasound imaging service area

Introduction

The Porter’s five forces model provides a structured framework through which the external environment is analyzed through cross-examination of the nature of competition in the GE healthcare ultrasound industry. The competitive dynamics is better understood through service area structural analysis (also known as Porter’s five forces model in healthcare) that seeks to provide attractiveness and future viability of the healthcare industry. Therefore, the intensity of the competition within the healthcare systems is a critical factor when analysis the organization’s external environment. The porter’s five forces model is the competition intensity analysis taken as a function of the level of rivalry among organizations, threat of new entrants, threat of new substitute products, the bargaining power of the customers (buyers), and the bargaining powers of the suppliers. The impact and strength of these Porter’s five forces should be identified and monitored for the purpose of determining the strength, viability and the success of the breast cancer imagining especially in the GE healthcare ultrasound organizations. Therefore, this paper focus on the service area structural analysis of breast cancer ultrasound imaging services in the specialized area of the GE healthcare ultrasound in the healthcare industry, to determine the viability, strength, and success of the service in the current market.

 

Five Forces Forces driving service area competition conclusion
The level of rivalry among existing organization

 

The competitive strategy of one organization almost always affects other organizations in the same business. Therefore, organizations carrying out similar business are mutually dependent to each other. In breast cancer ultrasound imaging organizations, competition intensifies since most of the competing organizations attempt to provide improved services for the purpose of winning customers ahead of other organizations providing the same service. Therefore, actions by one organization result in reactions by others. Rivalry in breast cancer imaging occurs among the healthcare organizations operating at international level. Some of the competing organization includes but not restricted to Siemens, Philips and Toshiba. These organizations undertakes, manufacture, development and distribution of medical ultrasound devices for diagnostic service markets. Also, these organizations provide equipment, management consulting, healthcare information systems, and support services.  The intensity of the competition of the breast cancer imaging service is increasingly becoming higher and higher as more existing healthcare organizations are becoming equipped with breast cancer imaging devices. The competitors are continuously and actively engaging in aggressive advertisements claiming that they have competent physicians who are capable performing breast cancer ultrasound imaging procedures. The diversity of the competitors is mainly small private hospitals and clinics employing distinct competitive strategies such as personalities of the personnel and branding of their services. Additionally, other rivalries in other areas of specialties such as skin cancer ultrasound imaging and colon cancer imaging are willing to perform breast cancer ultrasound imaging. Just like specialists in breast cancer imaging, these rivalries in different specialties are board eligible with proper training to perform breast cancer imaging. However, the switching costs for customers among these GE health ultrasound organization and consequently, there is higher existing barriers for these organizations. Therefore, the intensity of the competition is predicted to continue up surging even in the future (Ginter, Duncan & Swayne, 2013).
Threats of new entrants

 

There is high number of new entrants in the breast cancer imaging market in the field of GE healthcare ultrasound industry. The new entrants in this market are a great threat to the existing healthcare organizations since they incline the competition intensity. Currently, more and more women are succumbing to breast cancer, and most of the prevailing healthcare systems do not have sophisticated equipments for providing breast cancer imaging services to the ever-rising number of breast cancer-afflicted patients. However, new private healthcare organizations have substantial resources to adapt to the rapidly growing market. The level of entry of the new organizations with similar business into the market may affect prices and consequently, profits decline considerably. Nevertheless, the threat of new entrants into the healthcare market depends largely on the prevailing barriers in the service area and industry. The barriers to the new entrants in providing radiology services such as breast cancer imaging services involves meeting minimum requirements for providing safe services to the public. If these minimum regulation barriers are much substantial, the threat of the new entrants is low to the existing healthcare organizations (Ginter, Duncan & Swayne, 2013).

 

Porter’s five forces model presents several barriers to entry for the new organizations so as to protect the existing organizations in the GE healthcare ultrasound service market. These barriers include but not restricted to differentiation of the existing breast cancer imaging service, higher capital needed to start a radiology center (expensive GE healthcare ultrasound systems), higher switching costs for the customers, limited accessibility to the distribution channeling systems, independent of scale, legal requirements, and government stringent controls. The assessments of these prevailing barriers healthcare systems may be used by the prevailing and upcoming organizations. Additionally, the healthcare markets are characterized by the high entry barriers due to consolidation of large healthcare systems and systemic integration of insurers and physicians, making it difficult for new healthcare organizations because of cost advantages and economies of scale. Furthermore, obtaining board certification in radiography is a big problem to overcome for the physicians who wish to establish new radiology centers for screening breast cancer (Ginter, Duncan & Swayne, 2013). Most of the consumers do not understand the meaning of certification in radiology, nevertheless.

 

 

Threat of substitutes

In breast cancer ultrasound imaging services, there are many substitutes that are in place. The substitutes that are used in screening breast cancer includes but not restricted to breast magnetic resonance imaging services, nuclear imaging services, optical breast imaging, computed tomography, Elastography, Thermography, and Ductogram services. Therefore, these substitutes perform a similar task of screening breast cancer. The emergence of substitute services decreases income returns to the GE healthcare ultrasound industry since at a particular time customers have a variety of substitute from which they can switch alternatively. This industry more diverse and thus, there are more substitutes techniques for the breast cancer imaging services. The threat of substitutes in breast cancer imaging business is high which has led to the cost-effective and non-surgical services offered over the counter (OTC). Furthermore, the emergent of substitutes in this business occurs taking advantage of the pre-existing surgical services which are expensive, painful, lengthy time of recovery, and consequently, intimidating. Thus, substitutes provide less insidious procedures which are relatively of low cost, less painful, shorter time of recovery, and more user-friendly. More and more breast cancer patients are seeking for better substitutes that are less expensive due to the economic situation and low income level (Ginter, Duncan & Swayne, 2013).

 

 

Bargaining powers of the consumers

 

In the healthcare industry, the bargaining power of the consumers has been increasing at unimaginable pace. For the managed GE healthcare ultrasound organizations, they have economies of scale and restrict provider choices. The ever-increasing bargaining power of consumers has increased system integration between breast cancer ultrasound imaging service providers and insurers. For this reason, larger healthcare institutions determine whether the managed care institutions will be offered a chance to be chosen by the employees. Therefore, customers of the GE healthcare ultrasound services attempts seek for the cost-effective services while advocating for the better and quality services. The healthcare industry has high competitive rivalry due to the elevated bargaining power of the consumers. The reason behind increased bargaining power of the consumers in the breast cancer ultrasound imaging is concentration of the purchases in the service area and has sufficient information to achieve bargaining leverage. Additionally, most of the consumers have better capability of negotiating the price, although most of them become embarrassed to negotiate the price and physicians are reluctant to negotiation. Therefore, consumers choose much less expensive substitutes, short delays, and substitutes which have a variety of alternative procedures (Ginter, Duncan & Swayne, 2013).

 

Bargaining power of the suppliers

 

This Porter’s force intensifies competition through the suppliers’ power to control prices and supply of the quality materials to the GE healthcare ultrasound organizations. Therefore, through such a mechanism suppliers are capable of exerting unbearable pressure on the healthcare industry. However, there are prevailing factors that confer power on suppliers. These factors include but not restricted to a few suppliers; there are countable substitute of the breast cancer imaging techniques, differentiation of the suppliers products such as imaging equipments, and the threat of forward integration by the suppliers where they enter into the same business. In the past few decades, healthcare professionals were vital suppliers to the healthcare industry such as GE healthcare ultrasound. These healthcare professionals are a potential threat to healthcare business as they can, instead of supplying materials to hospitals, establish their own institutions. This is called forward integration and is associated with increased bargaining powers of the suppliers. The suppliers in this industry have moderate power to control prices of materials and equipments as they are several and health institutions are numerous. However, insurance plan maintains the system through controlling consumers’ choices. Some of the suppliers who supply general medical materials such as suture materials, bandages, medications and thermometers have no elevated bargaining power over the healthcare industry. Some others who supplies patented equipment technology have temperate to high suppliers bargaining power, more so short run (Ginter, Duncan & Swayne, 2013).

 

Conclusion

In conclusion, Michael Porter’s five forces model is used to determine the strength, viability and success of the breast cancer ultrasound imaging within the GE healthcare ultrasound service area. A number of favorable factors have been considered as they determine ultimate profitability and competitive intensity of this service category of the GE healthcare ultrasound service area. Therefore, the five factor analysis has demonstrated that it is somehow difficult for the new entrants to enter into this service area market especially when the existing organizations increase competitive pressure. Moreover, the breast cancer ultrasound imaging service area will remain essentially competitive since there numerous barriers to new entrants. One higher barrier to new entrants is the certification by medical board. The increasing bargaining powers of the both consumers and suppliers created elevated pressure in the healthcare industry. Additionally, the availability of the substitutes in the GE healthcare ultrasound service area provides consumers with alternative services considering cost and quality concurrently.

 

eferences

Ginter, P. M., Duncan, W. J., & Swayne, L. E. (2013). Strategic management of health care organizations. San Francisco, CA: Jossey-Bass.