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A Case Analysis on a Retirement Home - SOWT and Industry Anaysis
Moderate capital requirement
A geriatrics center requires sizeable amount of capital investment to cover the start-up costs. These include the construction cost of the building, the cost of office and medical equipment, and expenditures in marketing. However, the start-up cost is relatively less if it is compared to the other industry that requires intensive capital investment such as computer manufacturing and mineral extraction.
Moderately high cost advantages independent of size
The experience of know-how to operate a non-profit geriatrics care center could place a barrier for any entrant who plans to enter this industry. The corporate structure and practice of a non-profit industry could be different from a profit-making industry since the objective of non-profit industry is to create best interest to the community, not to the company or shareholders. Any new entrants to the industry might require substantial amount of time to understand the unique environment of the non-profit geriatrics care industry and to gain experience from their failure. Since non-profit organization relies heavily upon the support from community, the new entrants that do not have any relationship with the local might find difficulty to obtain sponsorship and support from it in terms of financial resource and voluntary manpower.
High Government policy
There are at least two explicit barriers that could deter aspirant to enter into this industry.
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