Porter’s five forces analysis helps organizations to analyze their competitiveness and understand various factors affecting their operations in the industry. The Kaiser Family Foundation (KFF) operates as a non-profit organization; its primary role is to provide information on diverse healthcare issues in America (Kaiser Family Foundation, 2018). Information provided by the foundation is vital to inform policymakers, sensitize the public, and a source of content for health policy news coverage by the media. The foundation provides information freely to all stakeholders and relevant bodies. The Kaiser Family Foundation can apply Porter’s five forces including the threat of entry, the intensity of rivalry, the threat of substitute products, bargaining power of suppliers, and bargaining power of buyers to evaluate their operations in the healthcare industry.
The threat of New Entry
Being a non-profit organization, Kaiser Family Foundation faces an extremely low level of threat of entry of other non-profit firms in the industry. It operates alongside other firms such as the Cleveland Clinic Foundation. Cleveland Clinic Foundation undertakes medical patient care research and education (Cleveland Clinic, 2018). Because the interests of non-profit making medical research and policy information institutions such as Kaiser Family Foundation and Cleveland Clinic Foundation is to provide information, the entry of other firms does not pose any threat. Instead, such entry serves to complement the foundations’ missions. In essence, the Kaiser Family Foundation does not have profitability interests that new entrants are likely to compromise. New entrants in the industry serve to boost the body of knowledge and fact in healthcare policy research and information.
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Intensity of Rivalry
The intensity of rivalry is a major approach that the foundation can use to determine its position in the U.S health care industry. According to Wayland and McDonald (2015), rivalry occurs when there is an influx of organizations in a particular field hence affecting economic prosperity in the respective sector. Kaiser Family Foundation has a low level of rivalry in its areas of healthcare research and policy information because it does not operate for profits. It provides information freely without any charges (Devex, 2018). It, therefore, has no competitors regarded as likely to reduce its customers’ base. Although there is no rivalry at the level of medical research and policy information delivery, the existence of other non-profit firms may affect the foundation’s sourcing for donor and funding. The foundation needs funding or partial financial assistance to undertake its research and communications programs. The rivalry of other firms in the sector may lower funding from firms that support non-profit medical research and policy information organizations.
The threat of Substitute Products
The threat of substitute products further emerges as a force that the foundation must understand their success in the market. Wayland and McDonald (2015) note that advancements in medical practice have resulted in many substitute medical products and processes used to remedy various conditions. As a non-profit organization that focuses on the delivery of policy information and medical research, the foundation does not have a significant threat of substitute products. It is imperative to note that medical research and policy information, as the key services delivered by the foundation, there are no distinct substitutes. There are extremely low levels of threats of substitute products in the area of medical research and policy information.
Bargaining Power of Suppliers
The bargaining power of suppliers is a force that KFF uses to understand their position in the industry. Wayland and McDonald (2015) explain that the power held by entities such as raw materials suppliers, transportation agents, and component assemblies affects the competitive nature of organizations. The foundation conducts research and disseminates policy information in the healthcare sector. Being a non-profit organization, there are no suppliers of materials that may compromise the foundation’s operations.
Bargaining Power of Buyers
The bargaining power of buyers is a major approach that business organizations use to ensure prosperity. Wayland and McDonald (2015), explains that customer’s ability to procure large purchases determines their power. Consumers of information provided by the foundation access it freely and, therefore, do not need to have high bargaining powers. Policy makers and the accessing public information disseminated by the foundation do not need to bargain. This factor, therefore, does not affect the foundation’s operations.
References
Cleveland Clinic. (2018). Mission, Vision and Values . Retrieved from https://my.clevelandclinic.org/about/overview/who-we-are/mission-vision-values
Devex. (2018). Henry J. Kaiser Family Foundation . Retrieved from https://www.devex.com/organizations/henry-j-kaiser-family-foundation-48602
Kaiser Family Foundation. (2018). About Us . Retrieved from https://www.kff.org/about-us/
Wayland, M. S., & McDonald, W. G. (2015). Strategic Analysis for Healthcare: Concepts and Practical Applications . Health Administration Press.
