INDUSTRIES DOMINANT ECONOMIC FEATURES
The industries market size is around 12% to 14% of the GDP of United States of America. (J.D,Waldman, 2002). The GDP of the US for 2001 was 10,065.3 billion dollars out of which 14% is 1409.142 billion dollars. It is a growing and huge market to operate in.
The market growth rate of the healthcare industry is accelerating. This is due to the growing number of aging population and birthrates. (J.D,Waldman, 2002).
Lengthening life span will generate powerful demand. Statistics show that over 60 years of age crowd will raise form 606 million in 2000 to 2 billion in 2050. People over the age of 65 years of age constitute 16% of the US population, but 33% of all prescriptions written are to this segment of the population. The population of over 65 years of age people in the US is expected to grow to 53% during the period of 2001 to 2020 compared to the population growth of 17%. This is due to the aging baby boomer.(Andersen, 2002).
The healthcare industry is divided in to many sun sectors. In the US there are 531,069 organisations which are taxable and there are 114,784 organisations which are non-taxable in the healthcare industry. (US Census Bureau, 1997).
The estimated number of customers in the industry is around 25 million. In fact every one in the population is a potential customer in one way or another. (J.D,Waldman, 2002). The majority of the customers are people who are above the age group of 65 years of age.
Degree of vertical integration is limited in the healthcare industry. The laws and regulations set for vertical integration is strict.
There are large entry barriers for new entrance. This is due to the standards set by the food and drug association (FDA) and other such bodies. Technology and capitol investment required is very high. Patent rights are well established and difficult to obtain. Exiting this industry is relatively easy. (J.D,Waldman, 2002).
In this indust...