Question
You are the Strategic Planner for ABC Health, a large nonprofit healthcare system in central PA. Congratulations! Your Board of Directors and the Executive Directive
You are the Strategic Planner for ABC Health, a large nonprofit healthcare system in central PA. Congratulations! Your Board of Directors and the Executive Directive are exploring a possible merger with Happy Health, a large competing healthcare system also in central PA. You are tasked with exploring the viability of the merger. Your initial research indicates the following major companies:
Company | Pre-Merger Market Share |
ABC HealthCare | 40% |
Happy Valley HealthCare | 20% |
Blue Valley HealthCare | 15% |
Coaly Healthcare | 15% |
Whispering Healthcare | 6% |
Lions Healthcare | 4% |
Company | Post-Merger Market Share |
ABC/Happy Valley Healthcare | 60% |
Blue Valley HealthCare | 15% |
Coaly Healthcare | 15% |
Whispering Healthcare | 6% |
Lions Healthcare | 4% |
Utilizing the information provided, respond to the following questions:
- Define the Herfindahl-Hirschman Index (HHI). What does the HHI tell us? Why is it useful in strategic planning?
- Calculate the pre-merger HHI (show your work please). What is the score?
- Calculate the post-merger HHI (Show your work please). What is the score?
- What does the HHI tell you regarding this market? Explain.
- Do you see any potential anti-trust challenges with the merger? Explain
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Here is my analysis of the proposed merger utilizing the HerfindahlHirschman Index HHI 1 The Herfind...
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Operations Management Creating Value Along the Supply Chain
Authors: Roberta S. Russell, Bernard W. Taylor, Ignacio Castillo, Navneet Vidyarthi
1st Canadian Edition
978-1-118-3011, 1118942051, 1118942055, 978-1118301173
