Eco 365

Differentiating Between Market Structures

ECO365

June 16, 2014

Daniel Rowe

Differentiating Between Market Structures

The market structure that I chose to write about happens to be a company that I work for. It is a Senior Living/Assisted Living Community for individuals 55 years of age and older. The Assisted Living Facility (ALF) industry can he divided into two major categories: continuing care retirement communities and homes for the elderly and the primary distinction between the two is the presence of nursing care. The first being the continuing care retirement community provides on-site nursing services while Senior Living Residences do not.

Assisted Living facilities provide excellent services for seniors who wish to remain independent but still need some assistance with daily living. Types of assistance offered in ALF’s include help with Activities of Daily Living (ADL’s). Examples are help with bathing, dressing, eating, grooming, re-directing, and ambulating. There are a variety of options available in the ALF industry which makes them popular with seniors.

Future industry growth will be spurred by 77 million Baby Boomers planning to retire over the next two decades. With life expectancy continuing to increase in the United States many individuals who will retire at the age of 65 will have to decide where to spend the remaining twenty or more years. This is expected to increase demand for assisted living services and provide a great opportunity for entrepreneurs.

It is estimated that approximately one million Americans reside in senior care facilities. This number is expected to double by 2030. However, the current economic climate has caused the industry’s growth rate to dwindle. A drop in housing values across the country, coupled with losses in stock prices and 401(k) accounts, has caused millions of Americans who are nearing retirement to lose a substantial portion of their planned retirement income.  A recent AARP poll found...