Problems of sphere of influence of a service centre hospital
The density of the customer population of a service centre is high near the service centre but decrease with increasing distance due to the frictional effects of the distance
1. Limited reach: The service centre hospital may have difficulty attracting customers from areas that are further away due to the decrease in customer density. This can limit their potential customer base and revenue.
2. Competition with other hospitals: If there are other hospitals or healthcare providers in the surrounding area, the service centre hospital may face stiff competition for customers. This can further limit their sphere of influence and impact their profitability.
3. Inability to meet the needs of all customers: The decrease in customer density with distance can also lead to the service centre hospital being unable to effectively meet the healthcare needs of all potential customers in their sphere of influence. This can result in customers seeking services from other providers, leading to loss of revenue.
4. Difficulty in expanding services: The limited reach of the service centre hospital can make it challenging for them to expand their services or open additional locations in new areas. This can hinder their growth and ability to serve a larger customer base.
5. Potential impact on reputation: If the service centre hospital is unable to effectively reach and serve customers in their sphere of influence, it may impact their reputation and perceived quality of care. Customers may view them as less accessible or convenient compared to other healthcare providers.