Adult child care industry swot

Industries, Affordable Care Work, Obamacare, Sector Analysis

Research from SWOT:

Mature day care sector is famous for rendering social and basic overall health assistance to the elderly with mental and physical disabilities. The help provided in these adult child care centers consist of meals, cleanliness services such as bathing and cleaning up, therapeutic activities and transportation. This industry is differentiated via nursing homes as adult day time cares just operate during normal business hours and so do not include home or perhaps night proper care ARCH Nationwide Respite Resource Center, 2005.

Companies through this industry be based upon three key sources of fund which are scholarships from subscriber agencies, fees charged to clients or perhaps public money from the authorities. Public money represents 54% of merchandise segmentation whilst client charges represent 26%. In the year 2013, the sector had major revenue of 6. a couple of billion us dollars representing a growth of 2%. 3, seven-hundred businesses operating in this market made total profits of just over 396 million dollars. According to statistics provided by IBIS Community, 2013()

, the adult day care industry is in the growth lifestyle cycle level with moderate barriers to entry. The industry would not require large capital to setup and the amount of competition can be medium. The performance with the industry over the last five years shows claims for traders and gives hope to this new mature day care to get set up in the mid-Atlantic region.

Industry SWOT analysis

Strengths

The key durability of the mature day care sector comes from their continued progress in the period from 08 to 2013. Statistics show the fact that industry is growing over the past five years. this is attributed to ongoing growth of the aging population as well as the economic downturn which includes made software program as nursing homes to be placed safely out of the way as a result of staying almost five times as high-priced as mature day cares for you. Over the season 2010 to 2011, there was clearly slow expansion in the industry due to the states which made state and local governments to acquire shortfalls in their budget. As public financing provides a lot more than 50% in the revenues to get the industry, reduced authorities spending immediately resulted in lowered performance of the industry players ARCH National Respite Network Resource Center, 2012()

The many players in the adult day care industry become independent stakeholders meaning every one pieces its own charges and fees for services. This provides a different sort of environment when compared to other companies. This is because this allows corporations to adjust rates to control issues of earnings and income. This has helped the industry to develop rapidly during the last five years.

Medicaid which gives long-term treatment services has provided a great strength pertaining to the adult day care market. This is because Medical planning spends a whole lot on long lasting institutional attention which increases opportunities intended for increased earnings for the industry.

Weaknesses

The major weakness in the industry is definitely its substantial reliance about public money. Industry statistics show that more than half of the income for this market comes from the population sector. Resulting from many point out and local governments reducing expenditure due to the economic downturn, the adult day care sector has been considerably affected. Growth has slowed and market players had to look for other sources of profits to preserve their progress.

The industry also tremendously relies on Medicaid which is the major source of long-term care solutions in the country. There has been decreased Medicaid expenditure because of economic recession and this has reduced growth inside the adult day care industry.

One other weakness from the industry is definitely the high expense in recruiting. According to statistics offered by IBIS World, 2013()

, the industry put in about 2 . 7 billion dollars in income which is much more than 40% of the industry income. This demonstrates that the industry requires excessive investment in labor. As a result even though the industry is not capital intense, the investment in human resources is high. In addition , market players need to hire highly skilled employees in order to provide high quality solutions. Other costs that are high in this industry include cost of supplies just like medical products and power expenses. This reduces the profitability of the market considerably.

The adult child care industry has limited chance for growth internationally since it is usually service-based. International trade can be a great channel for progress in industrial sectors. This industry compared to additional service industrial sectors such as the lodge industry has little prospect of international control.

Majority of the players in the industry work as nonprofits meaning they are not allowed to declare and distribute profits as a result of providers provided. Because of this even though market players can be able to tap into the growth as a result of opportunities available in the industry, they are not able to enjoy benefits of the profits Kenny, 2009()

Possibilities

There is increasing demand for mature day care providers and this offers several generating factors. Among the driving elements is that the baby boomer era is traveling demand for the skills as they continue to age. Considering that the adult day care services caters majorly pertaining to persons old 65 years and more mature, as even more people become a member of this age group, there is likely to be elevated demand for adult day care providers.

Demand is likewise fueled by advances in the health care sector which are leading to longer life expectancy in the inhabitants. Data in the World Bank shows that over time, life expectancy has increased steadily. What this means is there will be even more people in the age group that requires assistance in living, medical therapy and customized care that is certainly provided by players in the adult day care support. Demand for adult day care services is also supported by improved prevalence of lifestyle illnesses such as Alzheimer’s disease, dementia and other mental and physical problems, even more people need services given by adult child care centers POSTURE National Respite Resource Centre, 2003()

Medical planning which is the major provider of long-term care insurance as well creates superb opportunity for growth in this adult day care market. It is anticipated that a long time, Medicaid will continue to spend on these services and provisions in the Affected person Protection and Affordable Care Act can also be expected to enhance health care financing and coverage and thus gasoline increased demand of adult day care companies.

Operating as a not-for-profit business in this sector provides sector players with opportunities to exploit revenue streams from grants by donor agencies and foundations. In addition , there is substantial fragmentation through this industry. Therefore majority of the industry players are operating as small firms with sole sites simply. This creates an opportunity intended for growth since concentration and market leadership has not however been established in this industry. This likewise creates opportunities for progress since organizations that can understand larger plus more established not-for-profits such as the Reddish colored Cross or National Easter Seals is often more likely to drive more grants and more community awareness as a result of the community relationships which have already been structured on these larger organizations.

Risks

Increasing competition is a huge danger in the adult day care market. Currently the amount of competition is thought to be modest but as even more companies continue to join the industry, there is bound to become more internal competition in the industry. Therefore it is expected more stringent guidelines will be introduced to reduce the volume of companies which could access open public and private funding. This will make issues for the market where players will have to selection their service portfolio in order to survive sharp competition just like extended functioning hours and specialized software program as therapy therapies.

There is external competition from other companies such as nursing facilities which, though are more expensive, present services that consumers value and enjoy. Other external competitors include retirement communities, home health care companies and faible centers. Typically all these agencies provide the same adult attention services though at distinct levels.

Increased regulation is usually a huge threat for firms operating in this kind of industry. This is due to they are needed to comply with government, state and other regulations in force by donor agencies and foundations to be able to survive MID-FOOT National Respite Resource Centre, 2003.

For example , recently in California, all adult day care centers must be not-for-profits in order to acquire Medi-Cal money. Complying with these rules is a stress for these businesses.

The states that has led to huge cutbacks in govt funding likewise creates a risk to the adult day care market since the sector players are required to diversify all their revenue channels to mitigate cash flow conditions that may result coming from decreased money.

SWOT synopsis chart

Risk Management Plan

In order to deliver a thorough risk management plan, it is important to get risks to be identified, evaluated, mitigated, monitored and reported. For the opening in the adult day care center inside the Mid-Atlantic region, one of the greatest risks can be competition. The Mid-Atlantic area has seventeen. 5% with the total number