Introduction
The cosmetic surgery sector is affected by a variety of factors that have an impact on market expansion and company profits. The cosmetic surgery industry has grown significantly and quickly over the generations, emerging as one of the industries with the highest potential for future growth. The characteristics of the market can either raise or decrease the likelihood of achievement for new entrants. Businesses can study the market and assess its investment potential using Porter’s five forces model. This essay aims to assess the market viability of a brand-new cosmetic surgery named Osborne Cosmetic in Miami, Florida, in the United States.
Clinical gene therapy is starting to exist, these have become feasible as a result of improvements in gene transfer technologies and a better knowledge of the biomolecular etiology of some illnesses. Researchers in plastic surgery have welcomed this idea, which has the potential to improve a variety of complex surgical procedures, including skin grafting, muscle, and nerve repair, and the transfer of microvascular tissue, to mention a few. Gene therapy offers by specifically activating the desired genes at specific places, there is the possibility for considerable advancement in the clinical outcome in these areas. Additionally, this strategy may increase the speed and effectiveness of the wound-healing process, which will have a substantial impact on the standard of care provided.
Background
City Profile
The city in focus is Austin, Texas, with a population of over 960,000 people. Texas state was chosen since southern states are among the most popular cosmetic surgery businesses, and, along with California and neighboring states, Texas is one of the leading states (Blau et al., 2020). With a median overall age of 33.7 in 2020, Austin, Texas, had an average family income of $75,000. However, according to the statistics, the median age of residents is slightly rising, growing from 33.0 several years prior and 33.7 in 2020 (U.S. Census, n.d.).
As for the demographic setting, among the most prevalent racial groups are White, accounting for 48.2%, Hispanic, accounting for 21.2%, Asian, with 7.65%, and Black or African American, allotted 7.4% (U.S. Census, n.d.). In this sense, it is noteworthy that research indicates that with age, more people tend to seek cosmetic surgery (Blau et al., 2020). As a result, of Austin’s maturing population and the lucrative location with the most prevalent cosmetic surgery rates, the city is appropriate for the surgery services business.
Service Profile
Cosmetic surgery procedures and other treatments are described as adjustments or changes to the shape, size, texture, color, or location of body traits. The term cosmetic plastic surgery can additionally refer to specialized procedures that prioritize aesthetic improvement (Atiyeh et al., 2020). Its main areas of focus usually include facelifts, ear correction, breast enlargement, facial implants, and fat reductions. In this healthcare field, surgeries are divided into minimally invasive techniques and fully invasive techniques. In 2020, 15,5 million cosmetic surgery operations were carried out by representatives of the American Society of Plastic Surgeons (ASPS), according to the report by Pearlman et al. (2022). This sum included 13,3 million minimally invasive cosmetic surgeries (Pearlman et al., 2022).
These included neuromodulator injections, filler injections, and skin treatments, and roughly 2,3 million cosmetic surgical procedures, such as augmentation mammoplasty, eyelid surgery, rhytidectomy, body contouring, and nose reconstructive surgery (Pearlman et al., 2022). Thus, the cosmetic surgery field within healthcare is becoming more popular and involves different levels of intensity.
What is additionally noteworthy is that with increasing popularity, there is a growth of competition and a necessity to obtain a bigger competitive edge. The industry’s rapid growth restricts the level of competition that is now present. Spending and the need for goods and services have risen steadily in the cosmetics sector (Niamtu, 2018). The creation of new consumer segments has also increased in the sector. For instance, between 1997 and 2015, the need for male cosmetic surgery by 327% due to men’s desire to look young (Valina & Sessa, 2019). Considering media trends, it is anticipated that the usage of cosmetic surgery will rise. The growth of cosmetic surgery tourism is another indicator of the growing demand for cosmetic surgery services (Furnas, 2018). The current market participants are unlikely to use aggressive marketing strategies like price wars because the need for cosmetic surgery is still high.
Competitive Threats
Existing Competitors
Austin is a relatively big city with almost one million residents, and with the growing popularity of cosmetic surgery in the southern states, it has several competitors that permeate the local market. The first existing competitor is the Austin Plastic Surgery Institute, which was founded in 2003 and strives to offer the highest-quality cosmetic surgery services in central Texas (Austin Plastic Surgery Institute, n.d.).
The company comprises a team of doctors, pharmacists, medical assistants, estheticians, and support personnel. The clinic offers a wide variety of services, starting with body, face, and breast surgeries and extending the services to skincare, involving injections, rejuvenation treatments, and women’s health procedures (Austin Plastic Surgery Institute, n.d.). Another local competitor is Westlake Dermatology & Cosmetic Surgery. The company has four subsidiaries around the state and offers dermatology and cosmetic surgery services, such as injections, breast augmentations, laser treatments, and body contouring (Westlake Dermatology & Cosmetic Surgery, n.d.). These are the largest businesses within the area that employ the most qualified doctors with a variety of services.
Potential Entrants
The ease with which suppliers can raise their prices and exert control over the supply chain determines their power level. Among the potential competitors of Osborne Cosmetic Surgery in Austin is Westgate Skin & Cancer. This business is among the most successful practices that offer services ranging from diagnostics to skin treatments and spas (Westgate Skin & Cancer, n.d.). Another potential entrant is Sanova Dermatology, which concentrates on cosmetology services in addition to personal brand cosmetics (Sanova Dermatology, n.d.). The reason behind these businesses permeating the cosmetic surgery industry is because of their expanding models with the growth of interest in surgeries and increase in customer base.
Due to competition, supplier power decreases as the number of providers increases. Unique product suppliers have a lot of clout in the distribution chain since they can utilize monopolies to hurt other companies. In contrast, because consumers have more options, typical product suppliers have little power (Spataro, 2019). The availability and application of items and technologies in the cosmetic procedures market define the influence of suppliers. Since cosmetic procedures clinics are the primary users of these items, vendors’ influence is diminished (Branham, 2019). The businesses in the cosmetics sector are engaged in a fierce battle to sell their goods and brand names.
The ease with which suppliers can raise their prices and exert control over the supply chain determines their power level. Due to competition, supplier power decreases as the number of providers increases (Thiry & Walden, 2019). Unique product suppliers have a lot of clout in the supply chain since they can utilize monopolies to hurt other companies. In contrast, suppliers have less provider power because consumers have more variety when purchasing essential products. The availability and application of items and technologies in the cosmetic procedures market define the influence of suppliers. Since cosmetic surgery facilities are the primary users of these items, vendors’ influence is diminished (Ching & Xu, 2019). The performance of the suppliers’ businesses depends heavily on cosmetics clinics.
Substitutes
Substitutes restrict the market potential of the current products by giving consumers options. When substitute goods or services offer comparable or superior results, such as price and quality, the risk of substitutes is significant. In the cosmetics market, non-surgical techniques compete with surgical operations. Beidas (2018), in their research, emphasized that in 2016, surgical procedures accounted for 56% of all expenditures in the cosmetics sector, while non-surgical procedures accounted for 44% of total expenditures.
Among the substitutes for cosmetic surgery is facial contouring with PDO threads, which do not involve any filler or invasive surgery and might replace cosmetic surgery on the nose, cheekbones, and eyebrow lifts. The utilization of new technology is the main focus of research and development efforts, and non-invasive solutions are becoming increasingly common. The threat of alternatives to cosmetic procedures will grow as suppliers develop new and more powerful treatments.
Conclusion
Porter’s five forces analysis reveals that Osborne Cosmetic Center in Miami has room to grow. The industry’s rapid growth lessens the level of competition for the market’s current participants and opens doors for new entrants. The market’s limited influence on suppliers and consumers lowers corporate uncertainty. The main challenge facing the industry is the creation of substitute products, which might dramatically lower the market share for cosmetic clinics.
The differentiation of their products, lack of experience, and lack of physical presence in well-known locations are likely to challenge Osborne cosmetic clinics must overcome. The rise of non-invasive cosmetic and technological breakthroughs has raised the risk of replacement items. The interaction between cosmetic product makers, the technology used in cosmetic clinics, and the competition limit the influence of suppliers. Osborne Cosmetic Surgery Center will find the market to be lucrative.
References
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