Consolidation strategies
Most organizations including healthcare organizations at some points may need to strengthen their businesses especially when developing marketing strategies. There are four main ways through which business organizations can strategize their marketing consolidation. One way through which organizations can achieve this is through sale off of a business or a certain product line which is referred to as divestment. Divestment may include complete cessation or just reduction of investments from an organization.
This move is usually taken when an organization realizes that a particular line of product is negatively affecting the organizations main objectives. This could be caused by lack of efficient resources by the management or due to lack of a common market for the core business and the product line. Basically, divestment results from a failed diversification strategy on growth. For instance, the Hospital Corporation of America divested its psychiatric department to allow it to focus its efforts on acute care services.
Another way of consolidation is pruning which involves reduction of products or services offered by an organization to the markets. The business therefore continues supplying its products or services but at lower volumes. This move may be useful where the markets involved are too small to service. The third strategy involves retrenchment where an organization stops servicing certain markets which is the exact opposite of growth development strategies.
This approach is used where the markets do not perform well enough. For example, a healthcare facility may withdraw its services from a local community. Finally, an organization may strategize consolidation by harvesting where it decreases its support for a certain product until the product loses demand then it withdraws completely. This strategy is important where the product is a little profitable to the business (Berkowitz 1).
Structural forms of competition
There are four structural forms of competition. All business organizations are faced with pure competition which occurs when different businesses have similar products. For instance, primary care practitioners in a small community are more likely to face competition from the community members especially if they are closely located.
Competitors may deal with the competition by improving their services may be by extending working hours or locating the business premises close to the customers. Another form of competition is the monopolistic competition where different organizations have substitute products. Differently managed healthcare facilities in the same community may be faced with competition. Price changes in such cases are the best ways of dealing with the situation.
The third structure of market competition is oligopoly where certain business organizations control the sales of most important industries in the market. The airline organizations are the most affected by this form of competition. The healthcare sector is most affected by oligopolistic market competition in the insurance companies. The final market competition is monopolistic where only one organization is specialized in selling a certain product or providing a given service to a specified population.
This form of competition occurs mainly with the large natural resource organization such as those providing essentials including water and energy. In most cases, government representatives are employed to provide the services or in other cases, they control the service rates and levels. In healthcare market, this form of competition has been highly abused where manufacturing companies such as pharmaceutical companies increase their prices on drugs (Petit 1).
Works Cited
Berkowitz, Erick. “Essentials of healthcare marketing”. 2010. Web.
Petit, Pascal. “Structural Forms and Growth Regimes of the Post-Fordist Era”. 2007. Web.