Overview of Assisted Living Facilities
Richard Brady
BUS 620 Managerial Marketing
Prof. Debra McCoskey-Reisert
August 25, 2014

After reviewing several industries for this assignment, I chose the health care industry, specifically the Assisted Living portion. This industry right now is a very dynamic one with a lot of changes occurring on a consistent basis. Hence the ability to use an analysis tool would allow a good look into the potential of this industry. Finch explains in the text, that the information gathered when using a analysis or from an environmental scan “systematically assesses how elements of the external environment will impact a business or market.” It also “provides managers with relevant information to improve the quality of marketing decisions.”
The analysis that will be used, is the PESTEL model which identifies six different external factors that could affect a business, political, economic, social, technological, environmental, and legal.
Political influences on Assisted Living would include any federal restrictions that have been implemented. The biggest variable however, would be the state regulations. Assisted Living is currently regulated by each individual state. This makes doing business in multiple states a little confusing, and frustrating because you have to be familiar with each state’s expectations. When a state auditor comes to inspect your facility in Washington, there will be different expectations than when an audit is done in Montana.
Economical influences that would most affect an Assisted Living business would be variables such as location, price of the property, population, and the number of potential residents in a given geographical location. The ability to measure the amount of potential customers in a certain location is key to the success of the business. Baby boomers would be the market segment that would be looked at in this case. The overall economy, and how well people are doing financially effects resident’s investments and portfolios, and their ability to pay for assisted living services.
Social influences would include variables such as a potential customer’s perception of Assisted Living cares services, and other professionals such as doctors, home health and hospice; as well as, professional’s opinions about your facility and services. Also the education that is provided to the public about assisted living, and its benefits as well as the ability to train current employees in the latest methods of caring for residents who receive care from your facility. The functions of educating the public, and employees have a big impact in the attitudes of potential consumers, and how they see the benefits of your services that you provide.
Technological influence has a great impact in the way that the medical records are kept, and the ability to access the information on those records. You can also network with third party health providers such as the resident’s doctor, making the communication process more efficient. New and innovated tools used in the everyday care for the residents such as adaptive utensils, or improved lifts, and hospital beds assists in making the care more effective.
Environmental influence can be seen in the cleaners that are used to sanitize the assisted living center, from the bathrooms and showers to the kitchen. The overall ambiance of the building, and the smell of cleanliness all helps in keeping the residents free from disease, and illnesses. This variable will also affect the ability to market the building, and its services to potential new customers.
Legal Influence variables come in a couple of different looks; first, we talked earlier about state audits that are done on a regular basis to ensure the residents are getting adequate care. Second, the variable of the care assessments that are completed when a new resident is admitted to the facility. There must be an assessment done on that individual’s needs to make sure that the proper care can be given to that resident.
The assisted living industry has grown in the last two decades. There seems to be no accurate count of how many assisted living facilities there are currently in the United States, and with the demand for the services of assisted living facilities on the rise, the marketing seems to be successful. It has been estimated that the potential market for assisted living facilities with the necessary capacity ranging from 2.5 to over 4.5 million seniors estimates to new assisted living units ranging from under 100,000 to over 300,000 new assisted living units annually. With these kinds of statistics, and if a company has a good public image then it should be just a matter of time for the business to be successful. “From the consumer perspective, the emergence of assisted living facilities can be largely viewed as a positive development.” (Grabowski, Stevenson, & Cornell, 2012).
The biggest strengths that are observable from the analysis, would be the demand for the assisted living services in the baby boomer market segment. The number of potential customers for this kind of service grows extremely fast in a very short period of time, so you need to be one of the established businesses in the area to take advantage of the opportunity. If you are not ready, you will lose out on the growth potential. The fact that this is a short window of opportunity can also be considered a weakness because of the amount of financial resources it takes to build, staff, and operate an assisted living building costs to the amount of return on investment must be favorable for the business to be successful.
Opportunities for growth in the next five years looks promising with the “Baby Boomers” (born between 1946 and 1964) started turning 65 in 2011. The projected number of older people, will increase dramatically during the next ten to fifteen years. By 2030, it is estimated the population over 65 years old is expected to reach 72 million. This will be around 20% of the total U.S. population. The demand for assisted living services will continue to grow through this time frame. The rate of growth is projected to slow down after 2030 confirming the limited window of opportunity. The other option that could be looked at is currently explained by Stark that there are 36.4 million workers between the age of 50-64 who make up about 25% of the workforce today, and they are not being diligent in developing a safe retirement option. This could cause some opportunities for out of the box solution solving on how to provide assisted living services to these individuals when the time comes.
In conclusion of the analysis, it looks as if the assisted living business option for at least the next fifteen to twenty years would be a viable option to look at, if not enticing with the very high chances of being successful, if you have sound business practices.

References Finch, J. (2012). Managerial Marketing (p. 3.2). San Diego, CA: Bridgepoint Education, Inc.
Doctrow, J. L., & Mueller, G. R. (1999). Survival of the fittest: Competition, consolidation and growth in the assisted living industry. Journal of Real Estate Portfolio Management, 5(3), 225.
Grabowski, D. C., Stevenson, D. G., & Cornell, P. Y. (2012). Assisted Living Expansion and the Market for Nursing Home Care. Health Services Research, 47(6), 2296-2315. doi:10.1111/j.1475-6773.2012.01425.x
Stark, E. (2009). Lost in a Time Warp: How Age Stereotypes Impact Older Baby Boomers Who Still Want to Work. People & Strategy, 32(4), 58-64
Older Americans 2012: Key Indicators of Well-Being. (2012, December). Federal Interagency Forum on Aging-Related Statistics. Retrieved from www.agingstats.gov/Main_Site/Data/2012.../Population.aspx