American Wall is one of the biggest organizations that provide technical equipments for the healthcare services. The industry veterans Drs.Ido and Roy Schoenberg founded the firm. The mission of the organization is to enhance access to the quality care as well as make it profitable and transparent for the consumers. The firm does this with the help of mobile and web technology to remove barriers. The firm is presently determined to develop the e-business strategies as new consumers are driving the growth of online health services due to their excellent consumer experiences.
Political factor- Undoubtedly, the healthcare industry in USA is one of the fastest growing industries due to the availability and advancement of technology (Moses et al. 2013.). The United State has a strong democratic setup and effective rule of law with the election that are deemed fare and transparent. The government in the recent time has become stiff about the quality of healthcare services provided to the patients. Thus, the organizations in the sector feel the pressure of developing their quality of services. This opens up the opportunities for American Well to offer software services as well as access to the clinical services.
Figure 1: PESTLE analysis
(Source: Moses et al. 2013)
Economical factor- The healthcare sector of United State was anticipated to top $2.5 trillion and were expected to reach $4.3 trillion per resident by 2018 (Drummond et al. 2015). High and stable economy of United State opens up the opportunity for American Well to expand the business providing excellent quality of technical equipments. As there is an increasing demand for the services, the cost of services also increases. However, the organizations find the obstacles to expand the services, as AMA have put the restriction on the supply of doctors. Nonetheless, the healthcare industry paid the attention in developing the infrastructure due to the availability of financial resource.
Social and cultural factors- The major social issue in the healthcare industry of USA is the aging population and low rate of fertility. The organizations paid the attention to fertility services. Conversely, the consumers prefer to take the services from their own gender. For example, the female patients might want a female doctor (Visser et al. 2014.). The customers are concerned about the quality of services rather than the price. People in USA have also become concerned about their education and awareness about the personal health.
Technology- The US health sector has gained the popularity due to the availability of technology and innovation (Ball 2015). For example, Online Care of American Well is one of the significant innovations, which helps to manage and communicate the healthcare related information as well as transactions.
Legal- American Medical Association has made the changes to advertising laws of healthcare services (Kramer, Xu and Kesselheim, 2012). Thus, American Well could focus more on the education. In addition, organizations in health sector of US have experienced an increased litigation; thereby, the quality becomes the key factor.
Environmental- The sector has identified that a growing environmental agenda and the awareness regarding the community. Thereby, the businesses are trying to identify eco opportunities to market.
Bargaining of power of buyers- The bargaining power of the customers is comparatively high due to the large number of hospitals with excellent quality of services. The customers have the choices to receive services. In addition, due to the lack of transparency in the hospital charges, the patients do not rush to the hospitals (Moses et al. 2015). Instead, they look for the transparency in the charges.
Threats of substitutes- The bargaining power of substitutes products are moderate. The US healthcare sector introduces medical tourism, which increase the cost of services. Conversely, the healthcare sector in other nations, similar services are provided at low price, which influences bargaining power of substitute products (McGinnis et al. 2013).
Power of suppliers- The American Medical Association has restricted the practice of recruiting additional doctors to the healthcare setting (Chandra and Skinner 2012). The association is trying to cut down the operational costs of the healthcare services. Thus, the healthcare organizations cannot charge high for the services. AMA has made the effort to control the supply of doctors. Thus, it can be added that bargaining power of the suppliers is comparatively low.
Figure 2: Porter’s Five forces analysis
(Source: McGinnis et al. 2013)
Barriers to entry- As mentioned above, the healthcare industry in UK is rapidly growing; thereby, the cost of operation is comparatively high (McGinnis et al. 2013). In addition to this, US healthcare sector is more capital intensive such as high cost of medical equipments and surgical devices. Moreover, the existing healthcare organizations like American Well has large market share. Thus, the new healthcare firm may not be able to get into the market due to the high cost of operation.
Competitive rivalry- The competitive rivalry is high in healthcare sector in US. The competition is not only in large but also in small market. This is because of the availability of technology and the stable economy in the country. In addition, the governmental pressure to develop the quality of services. Thus, the existing organizations in the industry are on the rush of developing services and attract the customers.
The key aspect that differs American Well from other healthcare service provider its technological advancement. The “Online Care” developed by American Well has facilitated the ways of providing care. The use of telecommunication and computer-based tools helps both patients and doctors to collect and manage the healthcare related information. Almost 80% of the respondents use healthcare related website to set appointment, pay bill and other lab reports (Well 2017). The development of “Online Care” services made American Well unique from others. It enhances the strategic capabilities of American Well to gain competitive advantages.
The growing demand and the competitive forces require American Well to be significantly careful in devising the e-business strategies. In order to respond to the competitive forces, the firm needs to develop the e-business strategies. American Well needs could use the e-Business Roadmap, which is a comprehensive framework that can be used to create the strategic Internet plan.
The foundation phase- The firm needs to assess its e-commerce market positions and them formulate own strategies. It needs to develop e-brand extranet and internet opportunities.
Exploitation phase- Hence, the firm should exploit the value from the Web via communication and collaboration with the service users.
Innovation phase- American Well should build a community for e-mail marketing and knowledge management, where the patients will receive information from the healthcare setting.
References
Ball, M.J. ed., 2015. A history of medical informatics in the United States. New York: Springer.
Chandra, A. and Skinner, J., 2012. Technology growth and expenditure growth in health care. Journal of Economic Literature, 50(3), pp.645-680.
Drummond, M.F., Sculpher, M.J., Claxton, K., Stoddart, G.L. and Torrance, G.W., 2015. Methods for the economic evaluation of health care programmes. Oxford university press.
Kramer, D.B., Xu, S. and Kesselheim, A.S., 2012. Regulation of medical devices in the United States and European Union.
McGinnis, J.M., Stuckhardt, L., Saunders, R. and Smith, M. eds., 2013. Best care at lower cost: the path to continuously learning health care in America. National Academies Press.
McGinnis, J.M., Stuckhardt, L., Saunders, R. and Smith, M. eds., 2013. Best care at lower cost: the path to continuously learning health care in America. National Academies Press.
Moses, H., Matheson, D.H., Dorsey, E.R., George, B.P., Sadoff, D. and Yoshimura, S., 2013. The anatomy of health care in the United States. Jama, 310(18), pp.1947-1964.
Moses, H., Matheson, D.H., Cairns-Smith, S., George, B.P., Palisch, C. and Dorsey, E.R., 2015. The anatomy of medical research: US and international comparisons. Jama, 313(2), pp.174-189.
Shi, L. and Singh, D.A., 2014. Delivering health care in America. Jones & Bartlett Learning.
Visser, S.N., Danielson, M.L., Bitsko, R.H., Holbrook, J.R., Kogan, M.D., Ghandour, R.M., Perou, R. and Blumberg, S.J., 2014. Trends in the parent-report of health care provider-diagnosed and medicated attention-deficit/hyperactivity disorder: United States, 2003–2011. Journal of the American Academy of Child & Adolescent Psychiatry, 53(1), pp.34-46.
Well, A. (2017). Telehealth Is A Benefit Employers Love – American Well. [online] American Well. Available at: https://www.americanwell.com/telehealth-solution-health-plans/ [Accessed 24 Mar. 2017].
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