Running head: HEALTHCARE BUSINESS PLAN 1

Healthcare Business Plan

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Healthcare Business Plan

Coming up with a startup business is one of the most demanding jobs especially in the

healthcare industry. Start ups are created by either individuals or groups of people who believe

there is a void that can be filled within a specific market (Mitchel & Margret, 2020). They are

founded either for service provision or product development. Even though most start up business

companies normally lack a business model that is fully developed, it is important for their

owners to not only have clear information about the market structure they are about to venture

into, but also have a vivid product description. I have decided to venture into starting BeastOn, a

small startup company that I believe will play a major role towards revolutionizing the healthcare

industry. A vivid description of the product, scope of the market, structure of the market, degree

of competition, potential demands and industrial trends is provided in this paper.

Product description

I have decided to come up with BeastOn, a small startup business company that will help

revolutionize the healthcare industry. BeastOn will be a registry upon which databases carrying

multi-sourced clinical diagnostics data will be kept. It will provide clinical interpretations and

normalize clinical diagnostics through a Health Insurance Portability and Accountability Act

(HIPAA) complaint infrastructure. BeastOn will have and artificial intelligence platform which

will use clinical algorithms from more than 30 underlying health conditions so as to make health

officials make early predictions on the onset of a disease, plot its therapy needs, present some

clinical trial opportunities, indicate the risk and reveal care gaps. Healthcare officials can then

combine these resources and give alerts which will aid patients get the best clinical treatments at

the earliest possible times. This alert will also be used to speed advances and case management

in clinical studies.
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Scope of the market

The scope defines the subject area which is to be covered within the market (Roshani,

2021). BeastOn is projected to initially serve the local market, that is my local healthcare

institution that I am currently working under. It is at this facility that all the ground work and

pilot testing of the startup business will occur. However, the startup will in future serve the

global market at large. When the startup gets into global market scale, it will cover all the scopes

of marketing which include products and services, marketing research, channel of distribution,

physical distribution, promotional decisions, pricing decisions, environmental analysis, feedback

from customers and responsibility towards the society.

BeastOn is a product (software) which will be used to provide services to consumers

(patients and healthcare officials). Products and services form the root element of marketing.

Without them, no marketing can take place and the market itself cannot be present. Basic

marketing research is crucial for every startup business. All startup owners must analyze the

market to determine the size of the market, the types of customers and their attitude, the behavior

of buyers and many more. The channel of distribution provides a pathway through which

products and services can move from the producers to the consumers (Roshani, 2021). The

physical distribution on the other hand entails transportation, order processing and inventory

control and management. Promotion is a vital part of the marketing scope. It is through

promotional services that consumers are given awareness about a good or service. This goes

hand in hand with pricing decisions for the startup business. The marketing scope of BeastOn

software will entail all these marketing elements.

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Market structure

The market structure plays a major role in classifying different companies basing upon

their degree of competition and nature of goods and services (CFI, 2021). The market structure

influences the outcomes and behavior of a company. It can be determined by several factors such

as the number of sellers and buyers, the degree of concentration, the level of product

differentiation, and the difficulty or ease of entering or exiting a given market. There are four

major and popular market structure types. They include, oligopoly market, monopolistic

competition, perfect competition and monopoly market. Companies can also be classified to

belong into a specific market structure by looking at different features such as its buyer structure,

the turnover of its customers, the extent of its product differentiation, the nature of its inputs and

costs, the number of players present in the given market and the player with the largest market

share.

A perfect competition market structure exists when there is presence of several small

companies all competing against one another (CFI, 2021). These companies are homogenous

(sell similar products) in nature, can freely enter and exit the market and cannot influence the

price of their commodities in any way. Finding a pure form of such a market structure is very

rare in the real world. This is because of the criticisms it faces due to its lack of incentive for

innovation and very few barriers to entry. On the other hand, a monopolistic competition type of

market structure refers to a market that is imperfectively competitive and has both the traits of a

monopoly and competitive market. Sellers in this kind of market structure compete among

themselves and each one is free to differentiate their goods by branding them and changing their

quality to look different. In a monopolistic competition, sellers must vividly consider the prices
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of their competitors while ignoring the impact that their own prices have on the competition

(Gray, 2021).

An oligopoly type of market structure is made up of a small number of large companies

that sell identical or differentiated products. Since this market structure contains only a few

players, the competitive strategies of the firms are dependent upon each other. For instance, a

reduction in price by one of the players in this type of market structure will force all the other

players to also lower their prices. An increase in price of a product by any player in the market

will however, not force the other players to raise their prices, but rather sit back in anticipation

that their products will now be opted for by the consumers. Strategic planning is an important

aspect in this type of market structure. The players in this kind of market structure may also

decide to compete mutually, hence may come up with agreements to share their market by

restricting production (CFI, 2021).

In a monopoly market structure, the whole industry is represented by a single company.

There is lack of competition because the single industry solely sells goods for the whole market.

This form of market structure is also characterized with factors like copyright and patents, sole

ownership claim of resources, high initial set up costs and licenses that are only provided by the

government. These factors make it harder for other players to join this kind of market. BeastOn

software company will belong to a monopolistic competition type of market structure. This

because we are about to provide goods and services that are already being produced by several

similar companies such as Prognos company in the United States, which was founded in the year

2017, and Tempus company also in the United States founded in the year 2015 among many

more. I will ensure I differentiate my products and services in terms of their branding and quality

so as to maintain a competitive advantage over the other players.

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Degree of competition and availability of substitutes and barriers to entry

It is important for product managers to understand that once their product hits the market,

it will be competing with several others. To prevent you from being caught off guard by your

competitors, a project manager should ensure they have a decent grasp of what the other players

in the similar market are up to. Competition is a popular phenomenon in the business world and

startup companies are not exempted. Competition can either be direct or indirect. My startup

business for instance faces direct competition from companies that provide similar goods and

services that BeastOn is about to deliver and have been in the market for quite a long time. Since

there is no barrier to entry into the market structure I am about to venture in, and there is

availability of several substitute, it is important that I consider the various ways through which

my product will be able to maintain competitive advantage over the others (Exploring Business,

2021).

The degree of competition in the market structure that my startup business is about to

venture into is very high not only in the local scale but also globally. There are several software

companies that have ventured into producing goods and services that are of similar to stature to

what I am a bout to produce. For instance, Tempus, a software company in Chicago has built a

library (considered to be the world’s largest) that contains molecular and clinical data (Young,

2021). This company’s objective is also to make data obtained from previous patients be useful

in serving current ones. It has an operating system that is used to make data useful and

accessible, especially for cancer patients. Prognos, a software company in New York USA has

almost 16billion records obtained from over 185 million patients globally (Young, 2019). Its
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registry contains data from multi-sourced clinical diagnostics. Since the level of competition is

ultimately high in the market my startup business is about to venture into, and there are no

barriers whatsoever to entry of new players into the market, my product will have to be

differentiated so as to maintain a competitive advantage. Product differentiation can be achieved

through ways such as geographical location and proper advertising of the product.

Demand and buyers of the proposed product

BeastOn is a software product that will revolutionize the healthcare industry. It is a

registry which keeps databases carrying multi-sourced clinical diagnostics data. It will also

provide clinical interpretations and normalize clinical diagnostics through a Health Insurance

Portability and Accountability Act (HIPAA) complaint infrastructure. The demand for such a

kind of software is currently very high in the market. The healthcare industry has for long time

and is still using outdated methods of storing data such as the filing system. Very few healthcare

facilities have digitized their operations. This makes the demand for BeastOn to be very high in

the current healthcare industry market, which acts as the buyer of the proposed product.

There are several ways through which entrepreneurs and startup business owners can use

to asses the demand for their service or product (Gleeson, 2016). Very many entrepreneurs thrive

in the startup arena because of the numerous bases they have to cover in order to propel their

business forward. Any entrepreneur or startup business owner can assess the availability of

demand for their product by using three basic techniques. First, a person can tell the availability

of demand for a good or service by looking at the level of competition in that particular market.

Competition is a clear sign of effective demand because competitive industries indicate there is

availability of an attractive market opportunity. If there is no competitor in the market you are

about to venture into then it is evidently clear that it is not viable, unless you are the first person
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to identify it (Gleeson, 2016). Second, looking at the nature and number of enquiries you get

regarding a good or service is another important indication of the level of demand. Lastly, the

internet also provides a crucial means through which demand can be assessed. Looking at the

massive number of Pay Per Click (PPC) being displayed in google and the numerous numbers of

competitors providing a similar product as mine, I can tell the demand for BeastOn software is

actually very high.

Price, income and cross elasticity of demand

Elasticity of demand refers to the magnitude up to which demand can respond to other

changes in the economic factors such as price and income levels. Price is the most common

factor that is used to measure the elasticity of demand. However, other factors can also be used

such as the availability of substitutes and income levels. When the demand is elastic, then that is

a clear indication that the quantity demanded substantially changes when the other economic

factors (such as the price of a good or service) changes. An inelastic demand on the other hand

indicates lack of change on the quantity of goods demanded whenever the other economic factors

changes (Hall, 2021). Elasticity of demand is vital economic concept because it helps companies

to predict the changes in demand for their goods or services based on different factors such as the

change in price of a commodity and entry of competitive goods into the market.

The demand for a good or service can become more elastic if there is availability if easy

substitutes for the good. This makes the price demand for our proposed product to be elastic. A

change in the price of this product is likely to cause any significant impact on its demand in

several ways. For instance, despite BeastOn software providing a unique good or service that is

currently of a higher demand in the healthcare industry, there are several other startup businesses

that have also been brought up to do the same. Income Elasticity of demand is also referred to as
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income effect. The demand elasticity of any good or service can be influenced by the level of

income of a given population (Hall,2021). For instance, if an economic event could supposedly

occur and lead to laying off of many workers within a given area, these people may opt to save

their money rather than obtain a particular good or service that may not be a necessity to them.

The number of software companies producing the same goods and services as my

proposed product is on the rise. If we decide to either raise or lower the price of our proposed

product, the buying habits of the consumer will change significantly. Most of them will opt to

obtain the services of our competitors who are providing a similar product to ours but for a lower

fee. However, with extensive product differentiation and massive advertising of BeastOn, I will

still be able to achieve price elasticity. Even if I decide to increase the price of my product

whereas the other competitors lower theirs or make it constant, I will still be able to achieve

more sales of the product. A change in the elasticity of income demand may on the other hand

not affect the price elasticity demand of my product. This is because this product is most

specifically designed for healthcare institutions rather than individuals and these institutions are

not likely to be affected with income elasticity of demand in any way.

Industrial trends

My proposed business startup is designed to operate in a healthcare industry. The market

in this industry is moved by several macroeconomic factors such as social, political, economic

and technological. These macroeconomics factors have either positive or negative impacts on the

industry. All businesses are always operating according to the limitations of their political

environment. Various laws and regulations are formulated by governments to not only shape the

operation of a company, but also sway over all he other possible markets that a company may

wish to serve. Political factors are always applied mostly when a business or company tries to
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venture into a new market that is in a different country. The company should hence ensure they

understand and are well conversant with the laws and regulations dictating the operation of that

particular industry. The healthcare industry is one of the most politically regulated enterprises

due to the uniqueness of the types of good and services they produce. This industry deals with

the human life and this explains why there are very many laws and regulations set to govern the

operation of companies and businesses within this industry.

Economic macroeconomic factors are linked to the forces which shape and affect the

purchasing power of consumers. Before starting a startup business in a healthcare industry, it is

important to understand the various metrics and data associated with the economic

macroeconomic factors such as the Gross Domestic Product (GDP), unemployment rates,

inflation, disposable personal income and existing spending patterns (CFI, 2021). Before

venturing into anew business in a new country, every company should consider closely

monitoring these data regularly and be fully aware of the numbers. The healthcare industry is

greatly affected by these economic macroeconomic factors. Socio-cultural macroeconomic

factors on the other hand relate to demographics of a particular market setting. They tend to

shape the preference and values of customers within a particular industry.

The healthcare industry is made of people belonging to different cultures. Culture plays a

major role in defining and developing group mentality. It also changes how individuals in a

particular market shop and whatever they choose to spend their money on. Businesses should

pay closer attention to all socio-cultural variances when getting into new markets and most

especially in the healthcare industry. Technological macroeconomic factors entail new

technologies and how they impact products, their development and new market opportunity

access. Wireless communication is a perfect example of a current technological force. Mobile

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technology is not only impacting the development of new technologies but is also replacing old

and outdated technological innovations. The healthcare industry has clearly evolved over the past

years. New technologies have been developed in this industry to help revolutionize operations

over the past like development of filing systems. These technological innovations have since

become outdated and have been replaced with newer technologies like the BeastOn software that

I am proposing to startup. The healthcare industry is greatly evolving and new technologies are

still yet to be produced.

In summary, this paper has analyzed BeastOn, my proposed startup business product.

BeastOn software is a registry upon which databases carrying multi-sourced clinical diagnostics

data will be kept. It is projected to initially serve the local market scope, but will later on evolve

to serve the global market at large. This startup business will operate in a monopolistic

competition type of market structure. The degree of competition is extremely high in this kind of

market structure and there is no barrier to entry of a new player. Healthcare companies are the

number one target buyers of this proposed product as I believe the demand for this product to be

extremely high in this sector.

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References

Alan, Gleeson. (2016). How to Assess the Potential Demand for your Product or Service.

https://alangleeson.medium.com/the-importance-of-estimating-if-there-is-sufficient-

demand-for-your-product-or-service-f734d0c2fb0c

Corporate Finance Institute (CFI). (2021). Market Structure.

https://corporatefinanceinstitute.com/resources/knowledge/economics/market-structure/

Erica, Young. (2019). 38 Best Healthcare Startups to Watch in 2021. Healthcare Weekly.

Exploring Busines. (2021). 1.5 Monopolistic Competition, Oligopoly and Monopoly. M

Libraries. https://open.lib.umn.edu/exploringbusiness/chapter/1-5-monopolistic-

competition-oligopoly-and-monopoly-2/

Grant, Mitchel., & James, Margaret. (2020). Startup. Investopedia.

Mark, K. Gray. (2021). Product Management-levels of competition. Emergn.

https://www.emergn.com/blog/product-management-levels-of-competiton/

Mary, Hall. (2020). Elasticity vs Inelasticity of Demand: What’s the Difference? Investopedia.

https://www.investopedia.com/ask/answers/012915/what-difference-between-inelasticity-

and-elasticity-demand.asp

Roshani, R. (2021). Scope Of Marketing: 7 Major Scope of Marketing. Business Management

Ideas. https://www.businessmanagementideas.com/marketing/scope-of-marketing-7-

major-scope-of-marketing/197279