Competitive Factors
Bargaining Power of Buyers.MedTrack
aims to target mid-sized hospitals with a
capacity of 150 to 500 beds. The ability of
such hospitals to invest a fraction of their rev-
enues in MedTrack is expected to be signifi-
cant. Although hospitals are free to buy the
RFID devices off the shelf and have them
deployed through their in-house IT group,
traditionally hospitals have not built signifi-
cant in-house IT capabilities for such purpos-
es. A turnkey solution with system support is
likely to be the main business model for hos-
pitals in deploying RFID.
MedTrack’s main strategy will be to differ-
entiate itself with customized software and
service to satisfy customers’ complete needs.
MedTrack’s solutions will be scalable to suit
medium- as well as large-sized hospitals. As
economies of scale continue to lower the
costs of RFID devices, MedTrack will further
target small-sized hospitals, hospices, and
small-business clinics.
MedTrack will aim to integrate its applica-
tions with industry standards followed by the
suppliers and customers of hospitals, and will
constantly strive to bring innovative solu-
tions that meet the needs of the customer. By
adopting a differentiated strategy on value-
added services, combined with low-cost
hardware supplies, MedTrack will aim to
minimize the bargaining power of its cus-
tomers.
Bargaining Power of Suppliers. Med-
Track’s suppliers will chiefly be manufactur-
ers of RFID devices, computer workstations,
and servers. In addition, MedTrack will
depend on the availability of skilled software
professionals whose expertise will be critical
in developing, deploying, and maintaining
the platform.
The high-tech manufacturing industry is
very competitive, as most of the hardware
products such as silicon chips have been com-
moditized. Much supply procurement is
international and can now be performed over
the Internet. This situation helps MedTrack
take advantage of the lowest possible prices.
However, quality control of the suppliers
may be difficult as the major manufacturing
is expected to shift to lower-cost countries in
Asia.
Supply of skilled software professionals
that can not only be attracted to the venture
but also retained as the venture grows is the
key to MedTrack’s success. MedTrack’s goal
is to build a diverse, well-compensated
workforce with a strong work ethic, profes-
sionalism, and respect for everyone’s contri-
bution.Threat of Relevant Substitutes.In gener-
al, the use of RFID devices is expected to
establish and improve the hospital’s tracking
and monitoring of supplies and equipment.
It is mainly expected to replace bar-code-
based technology to track goods and sup-
plies. The advantages and value added from
RFID technology appear compelling over
the costs bar-code-based technology.
Although RFID applications have not
been leveraged in the health-care industry,
the technology has been applied in many
other areas. The earliest implementations
have been in toll roads, libraries, smart cards,
and so on. Providers of such solutions can
easily customize their solutions to target the
health-care industry.Threat of New Entrants. High-tech indus-
try has been historically vulnerable due to the
entry of new players. This has often led to
overcapacity, a drop in prices, and a glut in
the market. Successful high-tech companies
have propelled themselves with a strong
entry, and sustained their growth with rapid
development and deployment of new prod-
ucts and constant innovation to stay in busi-
ness.
RFID technology is likely to undergo a
cycle similar to that of other high-tech prod-
ucts, such as mobile phones and communica-
tion devices. Although high entry barriers
exist for providers of RFID during the infant
stages of technology, it is expected that early
birds such as MedTrack will reap the rewards
of establishing a strong customer base.MedTrack 427