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Retail medicne has not been refined, there is little competition compared to other markets, use of technology is minimal, and medical offices are not designed for efficiency. These features of the industry have created a situation that is ripe with opportunity for a retail chain with the right mix of business strategy, medical offering, and marketing.
There are no core cosmetic medical giants. The largest competition consists of individual physician practices that do focus exclusively on medical technologies as part of their product mix. These practices are generally poorly managed and poorly marketed. Most of these practices manage one clinc, with a small minority managing two locations.
Most physicians use the same technology they did ten years ago—a cash register and a calculator. If they’re ahead of the curve they might use spreadsheets and a copy of Quickbooks or an outside service. Supply chain management, true online retailing, and real-time systems are almost unheard of in the medical industry outside of large hospitals.
Conventional cosmetic practices attempt to get customers in the door with yellow page ads, sell their clientele products they'll probably only use once, and then get them out the door. The medical spa by contrast is not just somewhere to buy something, but a destination in and of itself.
There are three types of service providers that form our current competition and from which potential customers may choose; medical spas, plastic surgeons/dermatologists, and day spas.
Medical Spas: Success breeds competition. Starting up a clinic or medical spa needs only financing and physician oversight. Neither presents much of a barrier to entry. What does create a barrier however is being first to market. A lead, especially in a rather small and insulated community should lead to an insurmountable barrier.
Some franchises and small chains have attempted to fill this market by creating an offering that attempts to remove the physician from the business as far as possible. These businesses "rent" a physician in order to provide medical oversight to their operations (either by co-locating or off-site) but their business plans are flawed.
- This model prevents offering treatments that must involve or be performed by a physician.
- The model presents a "strip mall" look and feel as a medical practice.
- The physican providing oversight is at risk: It's his medical licence on the line.
- The physician discovers that he can do it himself leading to managerial problems.
- The physician can not be bound to provide oversight if he chooses not to.
- The model makes less money since physician treatments have the highest margins.
- There is no opportunity to add new physician treatments or technologies.
- Marketing and PR abilities are curtailed.
- The patient wants a specialized physician.
The bulk of our competition comes from individual physicians offering
cosmetic treatments, usually Botox, hair removal and/or skin
rejuvenation procedures. In general, physicians do not have the
marketing, advertising or PR savvy to pose a significant threat to
entry into this business. In fact, prices and marketing will put
pressure on these practices to stop offering competing services.
Day Spas: Day spas offer some competition
with their current client base and established presence. Their
competing offerings may consist of hair removal, microdermabrasion,
non-medical wrinkle, cellulite and facial treatments, and some Botox by
visiting physicians. These visiting Botox treatments are generally
None of these competitors have a specialized scope of
offering, marketing resources or focus that prevents competiton from
entering the market. Those that offer competing services do so on a
small, (and sometimes shoddy) scale and without marketing
Franchises and Chains.
More coming later...