Defining the market - customer analysis

Market segmentation and pinpointing market segments that are of interest to a company are the main points of defining the market in customer terms. Market segmentation can be done by many different descriptors and thus the views of different segments can change radically accordingly. (Anderson et al. 2009) In this section the suitable factors for market segmentation in this case are introduced. Segmentation is done with the con-ventional ways; industry, customer size, and geography. Customer behavior is excluded since each customer belongs to the same segment; firms that have not purchased the supplier’s offering before. (Anderson et al. 2009)

Segmentation by industry is unambiguous; all the customers in this market research are hospitals and thus belonging to the healthcare industry by delivering healthcare ser-vices. Customer size can be measured by different factors: usually in economical figures or in amounts of something. In this work we ended up investigating the hospital districts in terms of the amount of inhabitants they are responsible of, number of municipalities in a district, and geographical location. (Anderson et al. 2009)

When we compare the customers at ERVA level we can see how they rank when meas-ured by inhabitants responsible for and amount of municipalities per ERVA district which is seen in Table 5. ERVA is a term used to describe the regional hospital groups of the Finnish healthcare system. There are five different ERVAs, each named after one of the five university hospitals in Finland. The idea behind this is that each regional hospital group has a hospital where the most demanding specialized medical treatment is centralized. The amount of inhabitants a district is responsible for reflects to the amount of patients needed to be treated which reflects to the amount of resources a dis-trict needs. However, there are differences in these disdis-tricts depending on e.g. culturally,

geographically and even in the age structure of inhabitants. But in general the more re-sources a hospital or hospital district the more they can potentially benefit from an asset management tool.

HYKS is a dominant leader with almost double the amount of inhabitants responsible for then TAYS, which places second. TYKS, KYS and OYS are quite equal with each other. On the other hand, looking at the amount of municipalities an ERVA district has, HYKS has clearly a smaller amount than the rest (39 versus 60-68). (Kunnat 2015) The reason is explained by the fact that a majority of inhabitants in Finland are concentrated close to the capital to a relatively small area in size. However the other ERVAs, which are bigger in area size and have a greater amount of municipalities scattered around in a broader area are also interesting in terms of asset management and tracking. Since hos-pital districts inside ERVA districts collaborate with each other one would think it would be also beneficial to collaborate and take advantage of such products.

Table 5. Statistics of the different ERVA areas (31.12.2014) (adapted from Kunnat 2015)

Looking closer at each ERVA district and dividing them into hospital districts it can be seen how each hospital district places into the same categories as in the previous table.

(Appendix B) Every ERVA district has one major hospital district in the top five based on inhabitants responsible for as seen from the colored legends. The Helsinki and

ERVA Inhabitants

responsible for % Amount of

municipalities %

HYKS 1 904 062 35.0 % 39 13.0 TAYS 1 110 996 20.4% 67 22.2

TYKS 869 477 16.0% 60 20.0

KYS 816 405 15.0% 67 22.2

OYS 741 897 13.6% 68 22.6

Total 5 442 837 100% 301 100%

Uusimaa district (HUS) of the HYKS ERVA is substantially larger than any other hos-pital district having almost 30 % of inhabitants covered. On the opposite, the hoshos-pital district Itä-Savo belonging to the KYS ERVA has only 0.8 % of all inhabitants covered.

This means that HUS has almost 40 times the amount of inhabitants it covers compared to Itä-Savo. The hospital districts of the most northern ERVA area, the OYS ERVA populate the lower of the chart with an exception of the hospital district of Pohjois-Pohjanmaa. This is typical in the northern part of Finland, where population density is small and distances are large.

Looking at how customers are located geographically in Finland a logical division of areas can be noticed. As mentioned before, Finland is divided into five different region-al hospitregion-al groups (ERVA), which are each responsible for a certain amount of hospitregion-al districts. This can be seen in Figure 23.

Figure 23. The ERVAs and hospital districts of Finland from 1.1.2015 (adapted from Kunnat 2015)

The HYKS ERVA represents the south of Finland whilst the OYS ERVA covers more of the north. KYS ERVA situates mainly on the eastern side and middle of Finland and TYKS ERVA on the western side. TAYS ERVA situates in the middle with a slight tilt to the west. Currently there have been discussions in Finland regarding making changes to the amount and division of ERVA districts. One proposal, which has been discussed, is to grow the amount of ERVA districts from the current five to 19 districts.

(Toikkanen 2015) Changes are most likely to occur and this has resulted in vigorous building of new hospitals and renovation of old hospitals around Finland. Every hospital

wants to ensure and strengthen their position before any new decisions are made on the ERVA divisions. Currently there are ongoing hospital projects with a total worth of at least 3 billion euros. (Miettinen 2015) Without doubt the possible upcoming changes will have affect since heavy investments in facilities means also investments in new assets. This could mean that also products related to asset management and asset track-ing would become timely.