Business Strategies

Choose an organization to study. Provide an introduction to the organization, its products, and services. Discuss why you chose this organization to study, any area of the organization that is of particular interest to you. The organization chosen must be part of the student’s area of concentration.

Business Strategy: Acadia Healthcare

Acadia Healthcare is a publicly traded behavioral health company headquartered in Franklin, Tennessee, USA. The company was established in 2005 to create and operate a group of behavioral healthcare facilities across the country. Acadia Healthcare provides a wide variety of services (including chemical dependency and psychiatric/mental services) to patients in different health settings, including specialized treatment facilities, inpatient psychiatric facilities, outpatient clinics, and residential treatment centers, among others (Acadia Healthcare, n.d). As of now, Acadia is the top provider of behavioral health services in the U.S. As of September 2021, the organization operated a group of two hundred and thirty behavioral health facilities with around 10,200 beds across the country

I chose this organization as it relates to my field of study, which is MBA in Medical Management. One aspect of the company that is of particular interest to me is Acadia’s philosophy and management style that upholds flexibility and collaboration. The company values input from staff members, physicians, nurses, and other key stakeholders. The mission of the organization is “to create a world-class organization that sets the standard of excellence in the treatment of specialty behavioral health and addiction disorders.”

Acadia Healthcare trades on the stock exchange. In the stock exchange, the company involves investors in buying and selling its shares. The company trades as NASDAQ, Russell 1000, and S&P 400. Nasdaq Composite is one of the stock market indices that are followed in the US. Acadia Healthcare Inc. is labeled as NSQ: ACHC in NASDAQ.

The company understands that investors are on the lookout for cheap but quality stocks and that is what is offered (Hobson, 2020). Stocks that are low cost but of good quality tend to be the popular market strategy for businesses. The trading share price of Acadia Healthcare is favorable for common investors because of its low cost valuation and high quality.

Good quality is preferred in the market because they represent dependable and solid businesses. It also shows the financial strength of the company apart from its profitability which means Acacia is a financially strong company. The quality of the stocks has been determined by metrics in the F-Score financial test. This score is a widely accepted accounting checklist that is used to determine stocks that improve financial health.

The market price of Acadia’s shares increases steadily over the months, however, investors have to be careful to choose stocks that are genuine bargains instead of falling for the value trap. Acadia factors in the weak nature of the economy thus the affordable prices. Forecasting the potential earnings can be difficult due to many factors and Earnings Yield can be used to determine the future state of the market.

Earnings Yield is used for comparison of the company’s market valuation and its profits. It provides the total value of the stock making it easier for investors to compare various types of stocks in the market. A reasonable Earnings Yield should be at least 5% and Acadia’s value is at 5.02% making it favorable for investors (Hobson, 2020).

References

Acadia Healthcare. (n.d). About Acadia Healthcare. Retrieved from: https://www.acadiahealthcare.com/about/

Hobson, B. (2020). What factors will move the Acadia Healthcare Inc share price?. Stockopedia. Retrieved 14 January 2022, from https://www.stockopedia.com/articles/acadia-healthcare-inc-what-factors-will-move-the-acadia-healthcare-inc-share-price-112078%7d/.

Hobson, B. (2020). Why Acadia Healthcare Inc is a mid-cap stock for contrarian investors. Stockopedia. Retrieved 14 January 2022, from https://www.stockopedia.com/articles/acadia-healthcare-inc-why-acadia-healthcare-inc-is-a-mid-cap-stock-for-contrarian-investors-123458%7d/.

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ACADIA HEALTHCARE BUSINESS STRATEGIES OUTLINE 6

Acadia Healthcare Business Strategies Outline

Cynthia De La Rosa

Keiser University

Capstone Business Strategies

Dr. John Fitzgerald

January. 22, 2022

 

Every business is established with intention of achieving the desired goals and objectives. Business strategies are designed and implemented to assist a business handle all its operations that would help with goals achievement. The Acadia Healthcare is a behavioral rehabilitating facility headquartered at Franklin Tennessee with the overall purpose of establishing outlets across the country. The main purpose and mission of the business is to become the leading behavioral center in the entire country before expanding to international markets. To attain this mission and overall purpose, the business has drafted and embraced some business strategies that would ensure total coordination is experienced across all the established outlets with overall leadership emanating from the headquarters and streaming down to the outlets using the organizational structure in place. There are different business areas designed for strategies to be implemented and these areas are leadership, application of ethics, strategies analysis, economic aspects, the way demand would be handled, financial aspect of the business, and other important factors assessment like technology among many others. Under each area, there are specific factors to be considered to ensure the business is properly managed from all aspects as demonstrated in the outline below.

a. Organization

· Brief history of the selected business shall be shared together with how the company is designed to operate in order to achieve its purpose of existence (Hobson, 2020).

· Mission, vision, objectives and goals description shall also be discussed at length

· Company stakeholders and the role they play in achieving organizational goals, objectives, and mission.

b.  Leadership Analysis

· Organizational structure in place

· Why the structure is important and effective to the business

· Organizational chart (diagram) (Acadia Healthcare – Org chart |2022)

· Various positions within the organization and how they contribute to organizational growth and expansion (Zhang et al., 2015)

· Role of leaders in decision making

c.  Ethical Factors

· Definition of ethics from a business perspective

· Elaboration of why ethics is an important factor in a business

· The various ethical factors at Acadia Healthcare that have been applied for instance; knowledge, values, personal goals, personality and morals among others

· How Acadia Healthcare has embraced and benefited from the use of ethics

· How the business leadership plans to maintain ethics

d. Strategic Analysis

· Clarification of strategic analysis concept and why it is important for a business to conduct one

· How Acadia Healthcare conducts its strategic analysis to ensure internal and external environments of the business are safe and protected. Some of strategic analysis include; SWOT analysis and Pestle analysis

· Clarification of the current business status in terms of internal and external environment and necessary improvements that should be made.

e. Economic Analysis

· Market economic status of whether it is stable or unstable

· Current economic status of the business

· Determination of whether the business is doing well or struggling economically in the market

· Recommendations of what Acadia Healthcare should do to remain resilient and relevant in the market given the identified economic status of the market

f. Demand Analysis

· Goods and services being offered by the organization (About Us | Acadia Healthcare, 2022)

· The demand of good and or services within the target market (population and geographic location)

· Future potential of the offered products and or services in the market

· Strategies in place to ensure current demand level only keeps increasing

g. Financial Factors

· Amount of revenues being generated by the business

· Profit margins being realized at the end of financial period

· Financial operational efficiency

· Capital efficiency and solvency

· Liquidity status of the business

· Strategies in place to improve on business financial status to attain desired goals and objectives

h. Overall Assessment

· Other important areas of importance for instance use of technology to achieve organizational goals

· Any other improvement or change the business need to achieve goals and objectives

Conclusion

Conducting a business strategies analysis is important as it helps in determining the specific position of the business in a competitive market. It creates sound and valid reasons why a business should continue with the strategy or make positive changes. It is an effective way of weighing available strengths, dealing with weaknesses, exploiting available opportunities, while mitigating possible risks. Nevertheless, for quality and reliable results to be attained, it is important to have all areas in each aspect to be thoroughly examined in an unbiased way. Moreover, it is only when issues are faced and handled in their reality that the business manages to attain much desired progress in a stable and reliable manner.

References

About Us | Acadia Healthcare. Acadia Healthcare. (2022). Retrieved 18 January 2022, from https://www.acadiahealthcare.com/about/.

Acadia Healthcare – Org chart | The Org. THE ORG. (2022). Retrieved 18 January 2022, from https://theorg.com/org/acadia-healthcare/org-chart.

Craig, W. (2018). The Role Leadership Has In Company Culture. Forbes. Retrieved 18 January 2022, from https://www.forbes.com/sites/williamcraig/2018/09/05/the-role-leadership-has-in-company-culture/?sh=60af4b1b16b6.

David Duckworth – CFO at Acadia Healthcare | The Org. THE ORG. (2022). Retrieved 18 January 2022, from https://theorg.com/org/acadia-healthcare/org-chart/david-duckworth.

Debbie Osteen – CEO at Acadia Healthcare | The Org. THE ORG. (2022). Retrieved 18 January 2022, from https://theorg.com/org/acadia-healthcare/org-chart/debbie-osteen.

Zhang, J., Yu, P. S., & Lv, Y. (2015, August). Organizational chart inference. In Proceedings of the 21th ACM SIGKDD International Conference on Knowledge Discovery and Data Mining (pp. 1435-1444).

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Report on the mission, vision, and core values of the company you have chosen. What are the strengths of the core values? What values are missing, or what values do you think are omitted. Incorporate at least two peer reviewed journal articles into your discussion of the core values. Reflect on your personal core values; what they are and how they guide your behavior.

The Mission, Vision, and Core Values of Acadia Healthcare

Mission

Acadia Healthcare’s mission is “to be a world-class organization that sets the standard for excellence in the treatment of mental health and addiction concerns.” The organization strives to retain its position as the top provider of mental healthcare services within the industry. Acadia Healthcare also strives to make its treatments synonymous with exceptional commitment to patients, communities, professional workers, and staff. (Acadia Healthcare, n.d.) The goal is to make their facilities stand out from others through the provision of quality and exceptional care that puts the needs of the patient first.

Vision

Acadia Healthcare’ vision is “to promote comprehensive and integrated care to improve the mental well-being of the children, adolescents, and adults we serve.” Core competencies, which include capabilities and resources, allow the organization to maintain its top position through collaboration with investors, patients, and other professionals in the industry (Acadia Healthcare, n.d.). Acadia Healthcare’s vision is manifested through the following:

Sensitivity to and understanding of the patients, as well as their families.

The integrated application and appreciation of up-to-date evidence-based practices of psychoeducation, psychodynamic health care, and psychotherapy.

Cooperation and engagement with the organizations and people who work collaboratively for the benefit of the patient.

Core Values

Acadia Healthcare’s core values include the following:

Respect

Compassion

Diversity and Inclusion, and

Collaboration

The Strengths of the Core Values

Acadia Healthcare’s core values represent the organization’s fundamental driving forces, deeply held beliefs, and highest priorities. They are the heart of what Acadia Health and its employees stand for. Employees at Acadia Healthcare honor and respect everybody. They demonstrate this through the compassion and dignity they show every patient. Additionally, the organization embraces and upholds diversity and inclusion as they believe that diversity plays a vital role in what makes Acadia Healthcare so exceptional (Acadia Healthcare, n.d.). Physicians are always determined to offer quality behavioral care through collaboration in service delivery.

Values Omitted

Some of the values missing at Acadia Healthcare’s core values include integrity, accountability, and fairness. Integrity is a vital core value in a company. Embracing integrity throughout the workplace can foster a positive work environment that upholds open communication, ethical decision making, and healthy relationships (Huberts, 2018). Accountability is also a vital core value in an organization. Accountability in the workplace promotes ownership and engagement as everybody clearly understands what his/her expectations and responsibilities are. Also, accountability increases job satisfaction, enhances employee commitment, and promote better working relationships – all of which contribute to better performance (Han & Hong, 2016). Fairness is also a critical core value. Fair treatment of workers in the organization builds trust, strengthens loyalty, increases productivity, and enhances morale.

Reflection on My Personal Core Values

Some of my personal core values include integrity, honesty, humility, and perseverance. These values guide my behavior every day. They inform my actions, words, and thoughts. This means that the decision and actions I make must honor them. Living by my core values has been critical in my life. This implies being the most authentic version of myself in every facet of my life. Not just at school, not just at work, or with my family members, but in every area that matters to me. When I am not in alignment with my core values, I usually feel guilty. So, I always try to stay true to my values, which has inspired my friends and family to do the same.

References

Acadia Healthcare. (n.d.). Our Mission, Vision, & Principles. Retrieved from: https://www.acadiahealthcare.com/about/mission-vision/

Han Y, Hong S. (2019). The Impact of Accountability on Organizational Performance in the U.S. Federal Government: The Moderating Role of Autonomy. Review of Public Personnel Administration, 39(1):3-23. DOI: https://doi.org/10.1177%2F0734371X16682816

Huberts, L. W. (2018). Integrity: What it is and why it is Important. Public Integrity, 20(sup1), S18-S32. DOI: https://doi.org/10.1080/10999922.2018.1477404

Comment by Professor: Does the company do what they say will do? Do the core values of Acadia represent truely what they do? If so, that's good

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Running Head: ACADIA HEALTHCARE

ACADIA HEALTHCARE 2

Week 4 Assignment: Acadia Healthcare

Cynthia De La Rosa

Keiser University

Capstone Business Strategies

Dr. John Fitzgerald

February. 5, 2022

Introduction

I have learned numerous invaluable contents throughout the course that has enhanced my understanding of Health Services Administration, which entails learning the various concepts applicable in the overall management of healthcare institutions. Essentially, this assignment involves medical management and corporate management concepts that address leadership, ethics, and strategic analysis. The three aspects form this task's core elements, which predominantly delves into Acadia Healthcare. Essentially, Acadia Healthcare is the leading provider of behavioural health services in the United States for people in need. Acadia has established its national presence across 40 states operating approximately 230 behavioural health facilities with about 10,200 beds. The establishment is relative in my field of study, which is the reason why I had an interactive experience researching about it and grasping the scope of how it operates in the industry. 

We have learned about leadership, ethics, and strategic management throughout this course and their significance. Therefore, providing information on Acadia Healthcare, I comprehensively addressed every aspect by shedding more light on how the aspects play a part in the medical institutions. The first is leadership, which involves influencing, motivating, and guiding people to realize predetermined objectives and goals. Leadership provides direction, stability, morale, culture, and even affiliations alongside employee retention and development. Acadia uses an expanded organizational structure with several key top leadership positions. Some of the top leaders include the Chief Executive Officer led by Ms. Debbie Osteen, Chief Finance Officer (CFO) led by David Duckworth, Executive Vice president led by Christopher L. Howard, and Executive Vice President General Counsel, amongst others. The organization's leadership body comprises pure talents, where each of them has garnered immense experience before joining Acadia, eventually propelling it to higher levels of success and growth.

Leadership

Based on the leadership and management of Acadia healthcare by a highly competent group, there is increasing confidence in the company's capacity to complete such deals and produce improved organic growth, productivity, and efficiency in the sites run by the company. Leaders help organizations carry out their daily operations effectively to propel them towards the vision and objectives. Leadership within organizations is vital to facilitate the development of cultures that uphold workforce value alongside leveraging the constructive input of employees of an organization. For instance, just like a vehicle that needs a driver or controller to propel it toward the desired destination, organizations require individuals who help the employees, teams, or other stakeholders to steer their contributions towards achieving the goals. In that light, leaders play a vital role in making crucial and strategic decisions, supporting, and motivating the employees in their daily operational areas to enhance their competence and productivity (interobserver, 2021). Effective organizational leadership could significantly render stability, direction, and achievement of objectives and goals. It results from the leaders' role in representing organizational beliefs and mission to steer social good that is suitable for both the employees and patients, who are pivotal stakeholders for business entities.

Acadia Healthcare recognizes the essence of effective organizational leadership; as a result, it presents its leadership form in a broad organizational structure that highlights key departmental leaders. Acadia Healthcare's top leader is the Chief Executive officer (CEO), Debbie Osteen, who has served the position since 2018, recording her senior leadership experience of more than 36 years (Acadia Healthcare, n.d.). As the organization's CEO, Ms. Debra Osteen has facilitated Acadia Healthcare's strategic vision and embarked on a growth plan. She has vast experience in senior leadership in the behavioural healthcare practice, thus her competence. Under the CEO is the Chief Finance Officer (CFO), David Duckworth. Mr. Duckworth has served Acadia since 2011 and had previously served various organizations in their financial affairs (Acadia Healthcare, n.d.). Also, there is the Executive Vice president, Christopher L. Howard joined Acadia in 2011 after serving several other institutions as a senior leader (Acadia Healthcare, 2022). Under the CFO is the EVP finance, who is responsible for all Acadia's financial records and welfare, and the Senior Director, Tax, responsible for the organization's tax obligations and proceedings (Acadia Healthcare, 2022). Besides, under the CEO is the EVP General Counsel responsible for all legal matters within the organization (Acadia Healthcare, 2022). Precisely, Acadia strives to attract and retain pure talents in their leadership positions to facilitate the achievement of their lofty vision and strategic goals of expanding and establishing their presence globally.

Acadia's organizational leadership predominantly focuses on core areas that are pivotal for the development and sustainability of the industry. Such areas include finance, legal, strategic, medical, and quality and compliance. As mentioned, leadership plays a vital role in influencing, motivating, and guiding individuals within an organization to drive it towards achieving the predetermined goals and vision. Besides, utilizing competent and experienced leaders to leverage its performance in the market. As a result, adopting experienced leaders such as the CEO and CFO has helped them establish their dominance in the behavioural health field which essentially emerged among the leading providers of behavioural health services. Precisely, effective organizational leadership is a viable obligation that the business should explore to achieve their objectives and visions

Ethics

For Acadia healthcare to maintain its leading role as providers of behavioural health services in the United States, it must have acceptable standards. Being ethical is one of the reasons behind the success of Acadia. Ethics is a major concern in the business world, especially when referring to social and economic good. Consequently, ethics in business is considered a vital function as they significantly adopt ethics to uphold integrity along with key stakeholders, such as employees, customers, suppliers, and investors. Prevalently, organizations strive to establish an ethics program for operations to instil integrity among their employees and garner trust and confidence from vital stakeholders. However, the predominance of ethics programs come with variation in quality as business ethics mostly align with the respective corporate principles, values, and policies. Concurrently, the concept of business ethics is increasingly emphasized in modern establishments ranging from the adoption of the right talents and business reputation for the public (Schroeder '18, 2021). Moreover, business ethics compels employee behaviour through their respective organizations that represents and upholds them (Schroeder '18, 2021). In addition, business ethics plays a vital role in benefitting the bottom line, which enhances profitability by alleviating the losses and declining investor confidence.

Acadia Healthcare actively practices ethics in its business operations by identifying the essence of observing ethics in the modern world where questionable business practices would suggest doubt from employees to other key stakeholders such as investors and consumers alongside suppliers, which can impact the overall operations and performance (Resource Treatment Center, 2022). Acadia integrates an active Compliance Program and Code of Conduct to uphold integrity and ethics throughout their practices of rendering quality behavioural healthcare services in an accountable environment (Resource Treatment Center, 2022). The Resource Treatment Centre (2022) states that Acadia stipulates that all affiliates, regardless of the nature of the relationship, should be wary of and sensitive to scenarios that could result in the controversial image and deter their reputation, such as illegalities and unethical practice. Therefore, Acadia's affiliates should report any instance of misconduct, illegal or improper conduct that occurs within their premises that jeopardizes the available legislations and regulations or their Code of Conduct (Resource Treatment Center, 2022). Acadia strives to alleviate discrimination based on any varying aspect such as ethnicity, colour, treatment, nationality, or any other aspect. The Compliance Program and Code of Conduct helps establish and develop fairness, equality, satisfaction, and ethical and compliance obligations within the organization. Acadia's corporate governance upholds the codes to establish an egalitarian, caring, and responsible context amongst all stakeholders and affiliates, which in return have catapulted the organization to greater heights of success and dominance in the behavioural healthcare service in the United States (Resource Treatment Center, 2022).

With the increasing criticism of business practices, organizations have significantly shifted to execute their operations appropriately. This has left Acadia with no choice but to adhere to the highest ethical and compliance requirements. Acadia encourages workers, contractors, and stakeholders to identify any problems, and we fully evaluate all complaints that are found or reported. In addition, the corporation acts on all issues confirmed, including seeking disciplinary action and adopting other remedial procedures to avoid recurrence. Acadia's policy is only to promote our products following FDA-approved product labelling, and all promotional interactions with meaningful Healthcare Professionals (HCPs) are solely interested in solving instructional problems by giving accurate and truthful scientific and professional details on our products or influential disease states. Acadia's guiding concept is that our interactions with HCPs must help patients and improve the practice of medicine.

Strategic Analysis

Acadia intends to be a world-class organization providing behavioural health services through adopting growth strategies and investment strategies to subsidize the growing operations and expenses. Providing a successful method of therapy and rehabilitation is Acadia's major purpose, which is to enhance the lives of its patients. Acadia Healthcare offers behavioural health treatments to patients in several settings, including inpatient psychiatric hospitals, specialist treatment facilities, residential treatment programs, and outpatient clinics. Acadia Healthcare is a member of the Acadia Healthcare System. " As of September 30, 2021, Acadia operated a network of 230 behavioural healthcare facilities with approximately 10,200 beds in 40 states and Puerto Rico (Acadia Healthcare, n.d.-c). As a result, the corporation requires a strategic analysis to aid in efficient decision-making and streamlining processes across the organization. Strategic planning makes it possible to attain established objectives and goals more effectively and practically. It is more effective to do strategic analysis since it increases inspection and the interactions among factors, such as those that affect cash in and outflows and the likelihood of the change in variables. Basically, strategic analysis is about finding ways to make things better. This is mostly possible when there is a goal or mission that guides the way an organization works. There are two types of strategic analysis: internal strategic analysis and external strategic analysis, which is conducted within an organization to identify strengths and weaknesses (usually conducted through a SWOT analysis- strengths, Weaknesses, Opportunities, and Threats), and the latter delves in the external factors that influence the growth potential of an organization (usually conducted through PESTLE analysis- Political, Economic, Social, Technological, Legal and Environmental factors) (Question Pro, 2018). 

Identifying the strategic position of an organization resulting from strategic analysis renders leaders with the scope of their organizational position and potential in the industry. Acadia's mission is "to be a world-class organization that sets the standard for excellence in the treatment of mental health and addiction concerns" (Acadia Healthcare, 2019). Therefore, to establish their presence globally, Acadia Healthcare has various growth strategies and has strived to establish effective behavioural health partnerships across the US to enhance the lives of demographics in need through amplifying access to behavioural health services throughout the United States (Acadia Healthcare, n.d.). Also, Acadia embarks on joint ventures and mergers, such as with Orlando Health and Waud Capital Partners, respectively (Caramenico, 2011; Franklin, 2021). As a result, Acadia is concurrently growth strategies and investment strategies to facilitate achieving its mission, "to be a world-class organization that sets the standard for excellence in the treatment of mental health and addiction concerns."

Therefore, effectively conducting strategic organizational analysis helps formulate strategic action plans that could, in return, guide them in actualizing the strategy. For instance, Acadia's growth strategy entails getting on board with partnerships, mergers and acquisitions that exponentially enhance the accessibility of their behavioural healthcare services to people in need. Also, to sustain the vast growth strategies, Acadia has to formulate investment strategies to subsidize their financially intense growth strategies. Consequentially, the strategies have rendered quantifiable outcomes such as increased revenues and increased reach across the US, indicating the essence of conducting a strategic analysis. 

References

Acadia Healthcare. (n.d.-a). Debbie Osteen- Chief Executive Officer. Acadia Healthcare. Retrieved February 3, 2022, from https://www.acadiahealthcare.com/about/acadia-staff/debbie-osteen/

Acadia Healthcare. (n.d.-b). Our Partnerships. Acadia Healthcare. Retrieved February 3, 2022, from https://www.acadiahealthcare.com/about/partnerships/

Acadia Healthcare. (n.d.-c). Over 227 Treatment Locations in The US & Puerto Rico | Acadia. Acadia Healthcare. Retrieved February 4, 2022, from https://www.acadiahealthcare.com/locations/

Acadia Healthcare. (2019). Mission, Vision, & Principles. Acadia Healthcare. https://www.acadiahealthcare.com/about/mission-vision/

Acadia Healthcare. (2022). Meet Our Senior Executive Team. Acadia Healthcare. https://www.acadiahealthcare.com/about/staff/senior-executive-team/

Caramenico, A. (2011, November 1). Acadia Healthcare, Majority Owned by Waud Capital Partners, Completes Merger with PHC, Inc. and Becomes Publicly Traded Company. Fierce Healthcare. https://www.fiercehealthcare.com/healthcare/acadia-healthcare-majority-owned-by-waud-capital-partners-completes-merger-phc-inc-and

De George, R. T. (2021). OpenMind. OpenMind. https://www.bbvaopenmind.com/en/articles/a-history-of-business-ethics/

Franklin, T. (2021, December 1). Acadia Healthcare Forms Joint Venture With Orlando Health. Www.businesswire.com. https://www.businesswire.com/news/home/20211201005787/en/Acadia-Healthcare-Forms-Joint-Venture-With-Orlando-Health

interObservers. (2021, July 16). Why Organizational Leadership is Important for Every Business. InterObservers. https://interobservers.com/organizational-leadership/

Question Pro. (2018, August 31). What is Strategic Analysis? QuestionPro. https://www.questionpro.com/blog/strategic-analysis/#:~:text=Strategic%20analysis%20is%20a%20process

Resource Treatment Center. (2022). Compliance & Code of Conduct. Resource Treatment Center. https://www.resourcetreatmentcenter.com/about/corporate-compliance/

Schroeder ’18, K. (2021, October). 3 Reasons Why Business Ethics Is Important | University of Redlands. Redlands. https://www.redlands.edu/study/schools-and-centers/business/sbblog/2019/may-2019/3-reasons-why-business-ethics-important/#:~:text=What%20Is%20Business%20Ethics%3F

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3

Market Model for Acadia Healthcare

Student’s Name

Course Name

Course Number

Professor

Due Date

Market Model for Acadia Healthcare

Today’s economy has several types of industries and firms. However, an analysis of the industries or firms is made easier by dividing them into different market models based on the levels of competition within the industry. There are four key market models: oligopoly, monopolistic competition, pure monopoly, and pure competition.

Oligopoly best fits Acadia Healthcare. Oligopoly can be defined as a market made up of a small number of companies or firms (Wang & Werning, 2020). Acadia Healthcare is the leading provider of mental and behavioral healthcare services within the United States. It operates in a market dominated by a few firms. Even though demand and supply influence prices, output, and markets, Acadia Healthcare, together with other firms within the industry, set prices for their services. Some of these firms include AmerisourceBergen and Maxim Healthcare. As of 2021, AmerisourceBergen had a total market share of around 23.36 per cent (CSIMarket, 2021). On the other hand, Maxim Healthcare had a total market share of 8 per cent.

An oligopoly market is associated with several implications. It can slow down innovation, increase prices, and block new entrants – all of which affect consumers negatively. Slow innovation could be a result of a lack of enough monetary funding. On the other hand, higher prices could be a result of firms’ interdependence in the market. Companies in an oligopoly can collaborate to set a price for their products/services to maximize profit. As a result, prices will be greater than the market-clearing prices. Besides that, it is always hard for new firms to enter an oligopoly. The most critical barriers include government licenses, high startup costs, patents, lack of access to complex and expensive technologies, as well as strategic action undertaken by incumbent companies designed to destroy or discourage new companies (Hattori & Tanaka, 2020). When a new firm manages to enter into an oligopoly, it will struggle to survive. The new company will be smaller, which means that it will have a higher average production cost, making it harder to compete with the already-established companies.

References

CSIMarket. (2021). Amerisourcebergen Corp. Retrieved from: https://csimarket.com/stocks/compet_glance.php?code=ABC

Hattori, M., & Tanaka, Y. (2020). License fees in oligopoly when outside innovator can enter the market: two-step auction. International Game Theory Review, 22(03), 2050003.

Wang, O., & Werning, I. (2020). Dynamic oligopoly and price stickiness (No. w27536). National Bureau of Economic Research.