Lasik Surgery Major General Environmental Trends
The general environment is composed of dimensions in the broader society than influence an industry and the firms within it. We group this dimensions into six environmental segments: demographics, economic, political/legal, socio-cultural, technological, and global. Firms cannot directly control above segments and each element within them. It is for that reason that, successful companies gather the information required to understand each segment and its implications for the selection and implementation of the appropriate strategies (Hitt, Ireland, & Hoskisson, 2005).
The demographic trends can be a powerful underlying force in a market and it can be predictable. Among the influential demographic variables are age, income, education, and geographical location (Aaker, D. 2001). In the case of LASIK surgery, the generation X those born roughly between 1960 and 1965, represent a target market due to the perception that they are more concern about their appearance, lead more dynamic life styles due to their current age, and are more atone with technology. The non-use of glasses or contact lenses could be appealing to this people. The average Lasik patient is about 39 years old with an income of about $88,000, said Dave Harmon, president of Market Scope, a company that tracks the industry. “Their education level is significantly higher than average,” Harmon said. “Very few people in their 20s have it done. Very few people in their 50s have it done.” (MSNBC, 2005, After a decade, lasik surgery is still a luxury, Retrieved November 19, 2006).
Another consideration would be targeting minority groups. Ethnic population is rising rapidly and support whole firms and industries. Hispanic population, for example are growing about five times faster and are gaining in income as well. Besides Hispanic population is up 79.7 % since 1970, in the Pacific Northwest according to 1980 Census data. (Eric ed. Gov site, Hispanics in the Pacific Northwest, Cook, A., 1983. The older demographics group is of particular interest, because is blessed with not only resources but also the time to use them and have the means to pay for this kind of surgery who is not covered by health insurance carriers. Economic trends are the prospects and inflation outlets for the countries in which the firm operates. Inflation rates and interest rates determine largely the buying power of consumers when it comes to having elective surgery done. Unemployment rate is another issue that needs to be taken into account.
Political/legal trends are competition and anti-monopoly laws, taxation laws, and deregulation philosophies. What changes in regulation are possible and what will their impact be? What tax or other incentives are being developed that might affect strategy? What are the political risks of operation in a governmental jurisdiction? The addition or removal of legislative or regulatory constrains can pose major strategic threats and opportunities. For example ban of certain surgical procedures, justification to invest in expensive equipment in the medical industry specifically eye care treatment.
Socio-cultural trends relates to workforce diversity, women in the workforce, concerns attitudes about quality, concerns about the environment, and shifts in preferences regarding product of work life and service characteristics. Cultural trends can present both threats and opportunities for a wide variety of firms (Aaker, D., 2001). For example the fact that in the case of LASIK surgery, U.S Patients choose their doctors by word of mouth, Harmon said. (MSNBC, 2005, After a decade, lasik surgery is still a luxury, Retrieved November 19, 2006).
Technological segment encompasses product innovations, applications of knowledge as well as new communications technologies. To what extent are existing technologies maturing? What technological developments are affecting or could affect the industry? These are some of the questions firms need to deal with. It is often easy to compile a list of technologies in the wings; the hard part is sorting out the winners from the losers. Ray Burke, a retail expert from Indiana University, drew upon a variety of research sources to develop a set of guidelines for separating winners from losers. Although his context is retailing, any firms exploring new technologies can benefit from considering each of the guidelines: Use technology to create an immediate, tangible benefit for the consumer. Make the technology easy to use. Execution matters: prototype, test, and refine. Recognize that customer’s response to technology varies. (Aaker, D., 2001)
In the case of Lasik surgery there are two new technologies. One allows the patients to heel faster and the other, results in better vision for some patients. One is called “blade-free” with the use of a laser named IntraLase, the other, is called wavefront-guided Lasik, and recently was approved by the Food and Drug Administration for both nearsightedness or astigmatism, expanding the number of people eligible for the surgery by about 1 million. It has also been approved for farsightedness (MSNBC, 2005, After a decade, lasik surgery is still a luxury, Retrieved November 19, 2006).
Global trends are important political events, critical global markets, newly industrialized countries and different cultural and institutional attributes. A global trend called medical tourism, once a fringe concept limited to niche specialties, is on the rise around the world. It is not just Americans going to Costa Rica for rhinoplasty or to Canada for Lasik. The cost of surgery in India, Bolivia, Thailand or South Africa can be one-tenth of what it is in the United States or Western Europe, and sometimes even less. A heart-valve replacement that would cost $200,000 or more in the U.S., for example, goes for $10,000 in India—and that includes round-trip airfare and a brief vacation package. Similarly, a metal-free dental bridge worth $5,500 in the U.S. costs $500 in India, a knee replacement in Thailand with six days of physical therapy costs about one-fifth of what it would in the States, and Lasik eye surgery worth $3,700 in the U.S. is available in many other countries for only $730. Cosmetic surgery savings are even greater: A full facelift that would cost $20,000 in the U.S. runs about $1,250 in South Africa." (Webcitation University of Delaware, 2005)
Juan Arevalo
References
Aaker, D. (2001) Developing Business Strategies, Sixth ed., New York: John Wiley & Sons, Inc.
Eric ed. Gov site, Hispanics in the Pacific Northwest, Cook, A., 1983, Hispanics in the Pacific Northwest, Retrieved November 20, 2006 from
http://eric.ed.gov/ERICWebPortal/Home.portal?_nfpb=true&_pageLabel=RecordDails&ERICExtSearch_SearchValue_0=ED237305&ERICExtSearch_SearchType_0=eric_accno&objectId=0900000b80104a81
Hitt, M., Ireland, D., & Hoskisson, R. (2005) Strategic Management: Competitiveness and Globalization: Concepts. Sixth ed. Ohio: Thompson South-Western.
Webcitation University of Delaware, July 25, 2005, Medical growing worldwide, Retrieved from
http://www.webcitation.org/5Ig0CGpSv
http://www.healthcareitnews.com/story.cms?id=4766
The demographic trends can be a powerful underlying force in a market and it can be predictable. Among the influential demographic variables are age, income, education, and geographical location (Aaker, D. 2001). In the case of LASIK surgery, the generation X those born roughly between 1960 and 1965, represent a target market due to the perception that they are more concern about their appearance, lead more dynamic life styles due to their current age, and are more atone with technology. The non-use of glasses or contact lenses could be appealing to this people. The average Lasik patient is about 39 years old with an income of about $88,000, said Dave Harmon, president of Market Scope, a company that tracks the industry. “Their education level is significantly higher than average,” Harmon said. “Very few people in their 20s have it done. Very few people in their 50s have it done.” (MSNBC, 2005, After a decade, lasik surgery is still a luxury, Retrieved November 19, 2006).
Another consideration would be targeting minority groups. Ethnic population is rising rapidly and support whole firms and industries. Hispanic population, for example are growing about five times faster and are gaining in income as well. Besides Hispanic population is up 79.7 % since 1970, in the Pacific Northwest according to 1980 Census data. (Eric ed. Gov site, Hispanics in the Pacific Northwest, Cook, A., 1983. The older demographics group is of particular interest, because is blessed with not only resources but also the time to use them and have the means to pay for this kind of surgery who is not covered by health insurance carriers. Economic trends are the prospects and inflation outlets for the countries in which the firm operates. Inflation rates and interest rates determine largely the buying power of consumers when it comes to having elective surgery done. Unemployment rate is another issue that needs to be taken into account.
Political/legal trends are competition and anti-monopoly laws, taxation laws, and deregulation philosophies. What changes in regulation are possible and what will their impact be? What tax or other incentives are being developed that might affect strategy? What are the political risks of operation in a governmental jurisdiction? The addition or removal of legislative or regulatory constrains can pose major strategic threats and opportunities. For example ban of certain surgical procedures, justification to invest in expensive equipment in the medical industry specifically eye care treatment.
Socio-cultural trends relates to workforce diversity, women in the workforce, concerns attitudes about quality, concerns about the environment, and shifts in preferences regarding product of work life and service characteristics. Cultural trends can present both threats and opportunities for a wide variety of firms (Aaker, D., 2001). For example the fact that in the case of LASIK surgery, U.S Patients choose their doctors by word of mouth, Harmon said. (MSNBC, 2005, After a decade, lasik surgery is still a luxury, Retrieved November 19, 2006).
Technological segment encompasses product innovations, applications of knowledge as well as new communications technologies. To what extent are existing technologies maturing? What technological developments are affecting or could affect the industry? These are some of the questions firms need to deal with. It is often easy to compile a list of technologies in the wings; the hard part is sorting out the winners from the losers. Ray Burke, a retail expert from Indiana University, drew upon a variety of research sources to develop a set of guidelines for separating winners from losers. Although his context is retailing, any firms exploring new technologies can benefit from considering each of the guidelines: Use technology to create an immediate, tangible benefit for the consumer. Make the technology easy to use. Execution matters: prototype, test, and refine. Recognize that customer’s response to technology varies. (Aaker, D., 2001)
In the case of Lasik surgery there are two new technologies. One allows the patients to heel faster and the other, results in better vision for some patients. One is called “blade-free” with the use of a laser named IntraLase, the other, is called wavefront-guided Lasik, and recently was approved by the Food and Drug Administration for both nearsightedness or astigmatism, expanding the number of people eligible for the surgery by about 1 million. It has also been approved for farsightedness (MSNBC, 2005, After a decade, lasik surgery is still a luxury, Retrieved November 19, 2006).
Global trends are important political events, critical global markets, newly industrialized countries and different cultural and institutional attributes. A global trend called medical tourism, once a fringe concept limited to niche specialties, is on the rise around the world. It is not just Americans going to Costa Rica for rhinoplasty or to Canada for Lasik. The cost of surgery in India, Bolivia, Thailand or South Africa can be one-tenth of what it is in the United States or Western Europe, and sometimes even less. A heart-valve replacement that would cost $200,000 or more in the U.S., for example, goes for $10,000 in India—and that includes round-trip airfare and a brief vacation package. Similarly, a metal-free dental bridge worth $5,500 in the U.S. costs $500 in India, a knee replacement in Thailand with six days of physical therapy costs about one-fifth of what it would in the States, and Lasik eye surgery worth $3,700 in the U.S. is available in many other countries for only $730. Cosmetic surgery savings are even greater: A full facelift that would cost $20,000 in the U.S. runs about $1,250 in South Africa." (Webcitation University of Delaware, 2005)
Juan Arevalo
References
Aaker, D. (2001) Developing Business Strategies, Sixth ed., New York: John Wiley & Sons, Inc.
Eric ed. Gov site, Hispanics in the Pacific Northwest, Cook, A., 1983, Hispanics in the Pacific Northwest, Retrieved November 20, 2006 from
http://eric.ed.gov/ERICWebPortal/Home.portal?_nfpb=true&_pageLabel=RecordDails&ERICExtSearch_SearchValue_0=ED237305&ERICExtSearch_SearchType_0=eric_accno&objectId=0900000b80104a81
Hitt, M., Ireland, D., & Hoskisson, R. (2005) Strategic Management: Competitiveness and Globalization: Concepts. Sixth ed. Ohio: Thompson South-Western.
Webcitation University of Delaware, July 25, 2005, Medical growing worldwide, Retrieved from
http://www.webcitation.org/5Ig0CGpSv
http://www.healthcareitnews.com/story.cms?id=4766
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