Five Forces Exercise: Consider the model and the data for analysis. The nursing home competitive market in Poughkeepsie, NY Industry competitors: Five nursing homes with 1200 nursing home beds Potential new entrants: one or two possible new nursing homes Buyers: The hospitals discharge 960 individuals to nursing homes annually. Substitutes: 600 substitute beds (assisted living, independent living) and 100 community alternatives (medical model adult day care) Suppliers: There is one lab There are two major physician groups serving the community How would you describe the competitive dynamics? Would you want to enter this market, why or why not? If operating in this market, would you want to stay in this market or leave it, why or why not?
The competitive dynamics is very high; there are a lot of players in the market who are serving the same set of patients and hence the competition is very high. A lot of new players are also entering the market and hence the competition is tough and the place is crowded for new players to come in and earn good revenue.
No, I would personally not enter such a market because of such a huge competition and lack of opportunity to even achieve the break-even.
If I has to enter in such a market then I would analyze the revenue trend for certain time period and then would take the final call whether to stay or not in this industry.