Introduction to Porter’s Model
Porter’s Five Forces model offers a structure for evaluating the competitive environment of an industry. It emphasizes the importance of understanding not just direct competition but also four other forces: the purchasing power of customers and suppliers.
Analysis of Technology’s Influence
The bargaining power of suppliers and buyers shifts significantly in the healthcare industry through the emergence of technologies and digitalization. For example, digitized health information systems such as Electronic Health Records (EHRs) and telemedicine platforms have fundamentally reordered the power dynamics (Kharlamov & Parry, 2021). Providers of these technologies have their push because of the uniqueness of their products and high switching costs. Healthcare providers, once implementing a given EHR system, spend both money and labor for retraining and data transfer when changing for another.
Alternatively, the mainstay of digital platforms providing more information and choice, patients or healthcare providers now become the buyers. For example, the patient can install online tools such as price comparisons between different health services, which will increase competition, forcing providers to try low costs and better quality (Akpan & Ibidunni, 2023). Some technologies, such as wearable devices, give patients information about their health, which increases their engagement and shifts some power from physicians to patients.
Real-World Applications and Effects
A real example of this change can be found in telehealth services. Telemedicine phenomena during the COVID-19-19 time proved that digitization of healthcare provided flexibility and diversification, which benefited the patients and doctors. Providers who had adopted telehealth services more efficiently could sustain the continuity of care and even attract patients from another country or region (Attaran, 2023). The shift in power toward patients meant they could choose their preferred health provider depending on the efficiency of digital service offerings.
Threat of New Entrants in Industries
Overview of New Entrants in Porter’s Model
The threat of new entrants to the market is a significant factor in Porter’s model. It portrays the ability of new firms coming to the market and, therefore, increasing rivalry that may necessarily lead to a cut in the profits realized by the existing players.
Case Study Outside Healthcare
The industry threatening new entrants the most is the technology field, for instance, social media and the mobile application industries. The low market requirements, like low capital requirement and availability of open-source tools, make it possible for new entries to enter the market (Özsoy et al., 2022). Traditional companies in this area frequently implement strategies to tackle this danger, including fast innovation, strong intellectual property protection, making network effects, etc.
Application to Healthcare
A new entry threat in health services, together with telehealth and health-related mobile applications, can be faced in healthcare. The rapidly expanding homecare and technological innovatimarket is driving the growth of new companies, which are moving barriers to entry (Özsoy et al., 2022). Existing healthcare providers will have to think of new ways to compete effectively, e.g., through cooperation with tech companies, building their digital platforms, or finding a niche by outracing services in terms of quality and patient experience.
Globalization and Competitive Dynamics
Globalization in Porter’s Model
In the globalization context, Porter’s model shows how market enlargement affects competitive edge. With globalization, the traditional market competitive forces may be blue; however, visits boost new intricacies like ensuring compliance with different regulations and handling cross-cultural issues.
Impact on Global Industries
Globalization impacts industries by expanding the potential market size and intensifying competition (Mentsiev et al., 2020). Companies are now competing with more than just local firms but also international players. This global rivalry can lead to innovation, efficiency, and pressure prices and margins.
Challenges in the Global Expansion of U.S. Healthcare
If U.S. healthcare leaders chose to add an extra dimension of globalization to their healthcare, they would be faced with challenges such as adapting to different healthcare regulations, managing the complexities of operating in different countries, and understanding the needs and expectations of diverse patient groups (Kharlamov & Parry, 2021). For pharmaceutical companies, this means they have to deal with varying drug approval processes and intellectual property laws and formulate market access strategies. The other issue details global supply chain management and research ethics of international clinical trials.
Strategic Implications
Strategically, healthcare leaders need to harmonize their offerings to cater to market-specific needs and to be efficient. At the same time, they have to leverage the global scale. Their part must balance global stabilization and local trails (Kharlamov & Parry, 2021). Pharmaceutical companies might address regional health concerns by developing medication that fits those regions. Alternatively, they can modify their marketing strategies to match the regional cultural and healthcare environment.
Conclusion
The emergence of new techs and digitization, shown here through Porter’s Five Forces model, demonstrates a fundamental change in competitive structure. These developments have revolutionized the traditional power structure, in which suppliers and buyers in many industries witness dramatic restructuring. For example, digitalization is a double-edged sword that changes the power structure between providers and patients. Telehealth, which became a necessity because of COVID-19, represents the opportunities digitalization provides for continuous care and increased patient freedom of choice (Akpan & Ibidunni, 2023). The threat of new entrants, especially in the technology sectors, which include social media and mobile applications, presents a challenge to the existing players and creates opportunities for them. For healthcare, the developments of digital health services strengthen the relevance of this threat even further, thus putting providers at risk of needing to innovate and distinguish to stay competitive.
Not only does globalization but also the expansion of markets increase the competition but also the increase of competition. The U.S. healthcare leadership, including those interested in international expansion, must distinguish between global standardization and localization (Akpan & Ibidunni, 2023). The significant demand for drug makers in the international market is the regulation of pharmaceutical companies all over the globe, patients’ diversified needs, and ethical concerns. Firmust will increasingly adapt its strategies to the technologies of future globalization to preserve its competitiveness in an ever-growing, complex world.
References
Akpan, I. J., & Ibidunni, A. S. (2023). Digitization and technological transformation of small business for sustainable development in the less developed and emerging economies: A research note and call for papers. Journal of Small Business & Entrepreneurship, 35(5), 671-676.https://www.tandfonline.com/doi/abs/10.1080/08276331.2021.1924505?casa_token=fwl6Ou2u-0wAAAAA:6IbTPnORUJT-oZInAD6FWnPcCalSkTHCsiWO8okvyzS4hsSA03_Vqqf7GcCMuEngg2iRGGDwlmZBYE4
Attaran, M. (2023). The impact of 5G on the evolution of intelligent automation and industry digitization. Journal of ambient intelligence and humanized computing, 14(5), 5977-5993.https://link.springer.com/article/10.1007/s12652-020-02521-x
Kharlamov, A. A., & Parry, G. (2021). The impact of servitization and digitization on productivity and profitability of the firm: a systematic approach. Production Planning & Control, 32(3), 185-197.https://www.tandfonline.com/doi/abs/10.1080/09537287.2020.1718793?casa_token=AiAnT2P6REkAAAAA:O6fl0k74GqAIKnhyVlAXUUxb5TaYT4Svyhi0vTHmXkGpdNtnZNYL7uATHnAOt1HmydlFC9-pUjxlG8g
Mentsiev, A. U., Engel, M. V., Tsamaev, A. M., Abubakarov, M. V., & Yushaeva, R. S. (2020, March). The concept of digitalization and its impact on the modern economy. In International Scientific Conference” Far East Con”(ISCFEC 2020) (pp. 2960–2964). Atlantis Press.https://www.atlantis-press.com/proceedings/iscfec-20/125936542
Özsoy, S., Ergüzel, O. Ş., Ersoy, A. Y., & Saygılı, M. (2022). The impact of digitalization on the export of high technology products: A panel data approach. The Journal of International Trade & Economic Development, 31(2), 277-298.https://www.tandfonline.com/doi/full/10.1080/09638199.2021.1965645?casa_token=r8bCa6WvlskAAAAA:PbR6AOp-shrKQ39–N3qKFTnhxBY3BfxjquEHc5tPeDUpKvLt4tgz7wRsw9yQ7TKQYitLzpdlAQzafs&casa_token=fVa-NGDLyE8AAAAA:4jHkZ57xys_k_XjIA1UMTOBHOMq1lLeVz_3-QxOWCjrKTQv2ZT9vy8V-hpUeK4AszobzPPkBVWEhaqs
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