Arun Verma- Porter's Five Forces in Health Industry

Topics: Health care, Health care provider, Healthcare Pages: 7 (1754 words) Published: November 19, 2010


Porter’s Five Forces Model w.r.t. Health Care Industry


Submitted to : Submitted by :

Anju Saini Arun Verma

Faculty Roll. No. 26

Section: R1011



This assignment is basically focused on the study of the Porter’s Five forces Model and its application in the Health Care Industry. It also summarizes the general features of the Health Care Industry together with its environment and its structure.

An analysis is also done pertaining to its competition in today’s era. An illustrative study of the Porter’s Five forces model with a diagram is also done to understand the concept in a better way. I hope that this assignment will meet the given expectations and requirements.

Health Care Industry

The health care industry or health profession treats patients who are injured, sick, disabled, or infirm. The delivery of modern health care depends on an expanding interdisciplinary team of trained professionals.

For purposes of finance and management, the healthcare industry is typically divided into several groups and sectors. The Global Industry Classification Standard and the Industry Classification Benchmark divide the industry into two main groups:

(1) Health care equipment & services and

(2) Pharmaceuticals, biotechnology & related life sciences.

Health care equipment and services comprise companies that provide medical equipment, medical supplies, and health care, such as hospitals, home health care providers, and nursing homes. The second industry group comprises sectors companies that produce biotechnology, pharmaceuticals, and miscellaneous scientific services.

Today the health care industry is considered as one of the largest industry throughout the world. And this health care industry includes thousands and thousands of hospitals, institutions which will provide primary, secondary & tertiary level of care. To deliver this care, these health care industries require health care workers, and among these health care workers most of them will be nurses busy in providing care to each & every patient in all aspect.

There are many ways of providing health care in the modern world. The most common way is face-to-face delivery, where care provider and patient see each other 'in the flesh'. This is what occurs in general medicine in most countries.

However, health care is not always face-to-face; with modern telecommunications technology. This could be when practitioner and patient communicate over the phone, video conferencing, the internet, email, text messages, or any other form of non-face-to-face communication.

Growth of Health Care Industry:

The health care industry is one of the world's largest and fastest-growing industries. Consuming over 10 percent of gross domestic product of most developed nations, health care can form an enormous part of a country's economy. In 2003, health care costs paid to hospitals, physicians, nursing homes, diagnostic laboratories, pharmacies, medical device manufacturers and other components of the health care system, consumed 15.3 percent of the GDP of the United States, the largest of any country in the world.

For United States, the health share of gross domestic product (GDP) is expected to hold steady in 2006 before resuming its historical upward trend, reaching 19.6 percent of GDP by 2016. In 2001, for the OECD countries (Organization for Economic Cooperation and Development) the average was 8.4 percent with the United...
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