This is a strategic Management class assignment. Please read the materials carefully before you accept the proposal. Textbook: Strategic Management of Health Care Organizations.

Michael Porter described a concept that has become known as the "five forces model". This concept involves a relationship between competitors within an industry, potential competitors, suppliers, buyers and alternative solutions to the problem being addressed.

This model helps us understand the competitive dynamics in a service area that our organization competes in. It will give us a sense of how intense the rivalry is that service area or market. Keep in mind that our organization has many services and they may be available in different service area. Consider the service area that the typical emergency room competes in. It may be the local neighborhood for most hospitals or for certain kinds of trauma; it could be a much wider service area. The Bronx Lebanon Emergency Room has a narrow service area (the southwest Bronx) compared to the Bellevue Emergency Room has a broad service area (all of NYC) because it is a major trauma center. For other services, Bellevue’s service area may be limited to the east side of midtown/lower Manhattan.

Another example describing service area is Memorial Sloan Kettering, now known as Memorial Hospital for Allied Diseases. Memorial has a service area that is regional, with outpatient chemotherapy centers in Westchester, New Jersey and Long Island, Memorial also has an extremely broad service area as well (national/international). To serve their patients from around the country and world, Memorial owns and operates a hotel that is available exclusively to their patients who are receiving radiation and/or chemotherapy treatments (a former Lehman student who took this class worked at this hotel).

Competitive dynamics are complex. We use models to help simplify these complex situations and support our analysis and decision making. When a health care provider competes in several service areas (based upon its services), the complexity increases significantly. When an organization considers growth and new markets to enter, it is helpful to understand the competitive dynamics before it decides to enter that market.