This website uses cookies to ensure you have the best experience. Learn more

Assignment 3 Market Model Patterns Of Change

1559 words - 7 pages

Assignment 3 Market Model Patterns of Change
Professor Koros
Strayer University

The Industry and General Pattern of Change Of Market Model
The fast paced industry surrounding health insurance in the United States has experienced rapid growth. There are numerous providers representing a competitive marketplace where no single entity rules over prices. However, the industry is undergoing massive transformation processes and slowly evolving into an oligopoly, where only a few large firms will eventually control market dynamics.
Throughout the years there has been more than 500 mergers involving health insurers (Bakhtiari, 2010). Although many small insurance companies operate in the ...view middle of the document...

Conversely, a single firm that cuts prices will only see a small increase in demand and no increase in market share, as competitors match the price reduction. As a result, a firm will have a kinked demand curve. The curve will be flat above the current price, since a price hike results in a loss of market share. The curve will be steep below the current price, since a price reduction results in no increase in market share. Changes in cost do not impact output and prices, as long as marginal cost remains in the vertical portion of marginal revenue.
Hence the model predicts that prices in the long run should be fairly rigid in an oligopoly. The kinked demand theory suggests that there will be price stickiness in these markets and firms will rely more on non-price competition to boost sales, revenue and profits. The result is no gain in market share and relative small increases in quantity demanded. In the health insurance industry, this could indicate that insurance premiums will remain fairly stable.
Factors Affecting Competitive And Productivity Measures
The first factor that affects the degree of competitiveness of the health insurance industry is government regulation. More government regulation on insurance premium rates means that the industry overall will become less competitive, and prices will not be determined by industry supply and demand. The second factor is the number of firms operating. A larger number of firms means that industry overall prices will be reduced, reducing profit margins. The third is government provided health insurance. Such services by the government will affect the overall competitiveness of the industry because private firms will be unable to compete against government provided insurance plans.
Three productivity measures to show how the industry is evolving include the number of health insurance buyers, average prices of health insurance plans, and overall average medical costs. The number of health insurance buyers will help understand the growth patterns in customer base, and demand for health insurance plans. Average price of health insurance will show the industry's evolution by examining patterns of profit growth in relation to health insurance costs. Medical costs will show the relationship between industry growths, inflation of costs, and increase in general medical care.

Pricing Strategy That Could Lead To Transaction
In the health insurance industry, transaction cost could arise from process outsourcing, enforcement and compliance costs, and increased product complexity. When firms in the insurance industry grow and consolidate in due time (due to mergers, high fixed costs), outsourcing of processes may become a necessity. As firms gather up more and more customers, the current workforce will no longer be able to handle jobs. For firms, hiring more employees could be very costly because of increasing market salaries; therefore outsourcing could be the only option. If outsourcing does...

Other Papers Like Assignment 3 Market Model Patterns of Change

Romeo And Juliet; How Do The Events In Act 3 Scene 1 Change The Outcome Of The Play? And How Does This Reflect On The Love And Hate Theme?

1372 words - 6 pages between their love, this convinces Juliet that they are in love. After a few other small moments of tension, mostly involving Paris' love for Juliet, Romeo and Juliet marry at the end of Act 2. This act would leave the audience with a huge sense of relief and happiness as there now is every reason to think the play will end 'happily ever after'. This view will inevitably change during the course of Act 3 scene 1.Act 3 scene 1 is a major fight scene and

Eco 550 Http: //Www.Helperstudy.Com/Products/Eco-550 Essay

1280 words - 6 pages with your professor for any additional instructions. Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length. ECO 550 Assignment 3 Market Model Patterns of Change Choose and research a specific business that is publicly traded where there has been a pattern of change in a

Consultant

2454 words - 10 pages on judgment and are particularly appropriate for very new technologies and very long-range forecasting. The following are examples of this model (click on each for further information): 1. Curve Fitting 2. Extrapolation of Trends 3. S-shaped Curves 4. Envelope S-Curves 5. Analogous Data In general, as a technology moves from the early stages of laboratory development to widespread acceptance in the marketplace, the

Strategic Change Management

1699 words - 7 pages Assignment brief Unit number and title Unit 3: Strategic Change Management Qualification BTEC – LEVEL 7 – Extended Diploma in Strategic Management & Leadership Start date 7th September 2015 End Date 28th September 2015 Assessor Pierre Arman Assignment Due Date Assignment title 25th Oct 2015 Understanding the need for and aspects of Strategic Change Management The purpose of this assignment is to provide

Consumption Theory Summary

920 words - 4 pages . This method of analysis proceeds as follows: 1. State the assumptions needed to construct the model. 2. Begin by assuming the model is in equilibrium. 3. Introduce a change in the model. In so doing, a condition of disequilibrium is created. 4. Find the new point at which equilibrium is restored. 5. Compare the new equilibrium point with the original one. * Short-Run Market Changes: The “Rationing Function” of Price The

Bes Info

945 words - 4 pages Homework Assignment #5 (Due April 3, 2015) Efficient Market Hypothesis The objective of this homework is to investigate if the release of accounting information provides information to the marketplace. More precisely, the goal is to study the information content of dividend announcements. The study focuses on the quarterly dividend announcements for 20 firms of the manufacturing industry, listed in the New York Stock Exchange, over the five-year

Catfish Creek Canoe Company

636 words - 3 pages Catfish Creek Canoe Company Marketing-----Case study assignment 1.According to the passage, Catfish is a new brand, its target market: Size: Canoes occupied about 32% of Canadian boats from Statistics Canada. The potential market was large, but it doesn’t talk about specific kinds of canoes such as Catfish’s canoes. So we can’t confirm the correct size. Demographic: Income level is above-average income. It doesn’t mention

Assignment 1: Finding the Leader in You: Self-Assessment / Johari Window

1467 words - 6 pages intuitiveness, culture, diversity, and leadership style influence decision making. Reference the scores of the assessments that you completed for homework in Week 1 as you complete this assignment. Write a two to three (2-3) page paper in which you: 1.Develop a profile of your personality characteristics and assessment results. 2.Summarize the results of the assessments you completed for homework in Week 1. 3.Analyze how attributes / scores

Case Study

811 words - 4 pages , information, etc. As well as less tangible resources such as goodwill and recognition in the market. 1 What is the relative quality of the different resources in terms of the environment? 2 To what extent are the resources fixed rather than flexible in their arrangements? History The patterns of past behaviour, activity, and effectiveness of the organisation that may affect current organisational functioning. 1 What have been the major stages

Microeconomics for Business

1035 words - 5 pages will increase by 12% (HKSAR, 2011). This issue creating a possibility of bubble appears at the property market. This essay will explain main patterns of this issue and provide an explanation of it by the using demand and supply theory (part 1 of the essay), as well as describing some of the possible consequences if this situation will not change in recent time(part 2 of the essay). Part 1: Is it has been mentioned before that real estate market

Zara Case Study

2584 words - 11 pages will be the culture, language and political system. There are three stages in this Uppsala Internationalization model. These steps shows how a company moves to an international market. Stage 1: no regular export activities (sporadic export). Stage 2: export via independent representatives (export modes). Stage 3: establishment of a foreign sales subsidiary. Stage 4: foreign production/manufacturing units. Zara's Internationalization Theory

Related Essays

Patterns Of Target Market Selection Essay

677 words - 3 pages Patterns of Target Market Selection: Broadly speaking there could be 5 different patterns of target market selection, viz., single-segment concentration, selective specialization or multi-segment, product specialization, market specialization and full market coverage. a) Single-segment concentration: The marketer decides to cater to a single segment only. Also referred to as concentrated marketing, the marketer understands the needs and

Assignment 3: Understanding The Basics Of Databases

945 words - 4 pages Assignment 3: Understanding the Basics of Databases School University CIS 106 – Introduction to Information Technology Professor Date Understanding the Basics of Databases Databases are used to organize a collection of data, allowing for easy access, retrieval, and use of information. The first databases were slow at processing information and inconsistent when applications would require the same information, but kept in different

Allen And Meyer's 3 Component Model Of Organisational Commitment

2791 words - 12 pages Organisational commitment is described to be “An employee’s calculative attachment to the organisation, whereby the employee is motivated to stay only because leaving would be costly” (McShane, 2013, p. 114). Allen and Meyer 3 component model of organisation commitment is comprised of three components which are Affective commitment, Continuance commitment and normative commitment. In this essay, I will be explaining how these components aided

Reflection Assignment 1 Following Johns Model Of Structured Reflection

1540 words - 7 pages Reflection Assignment 1Following Johns Model of Structured ReflectionJohns Model of Structured Reflection (Johns 1998)1.Write a description of the experience. Ask yourself:*'What are the significant issues I need to pay attention to?'I was asked to complete a pre-operative assessment on an elderly lady for cataract extraction, using an I.C.P. for intra ocular surgery under LA. During the assessment process she expressed several times that she