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SWOT Analysis: Monitoring Political Winds

To accurately prepare for opportunities and threats, keeping tabs on your government’s policies and legislation on business-related issues is crucial. Decisions made at the federal, state, and local levels can significantly impact how you do business. For example, new taxes can cut into already thinning margins, or tax cuts can improve them. Or changes in labor laws can impact how you handle employees.

Naturally, legislative threats or opportunities can occur on the local, state, and national levels. Monitoring the political winds includes taxes, international trade regulations, consumer protection, environmental policies, the pro- or anti-business attitude of the president, and the biggie — healthcare legislation.

Here’s what to expect over the next ten years:

  • Healthcare consumerism: Globally, this trend is shifting purchasing power and personal responsibility healthcare in the hands of the consumer. Slowing down the pace or direction of this trend depends on the role the government assumes relative to healthcare coverage.

  • Security market: Global government spending in homeland security for 2010 reached approximately $178 billion. In the next ten years, this figure is estimated to jump to nearly $2.7 trillion. Although the United States dominates the market, the list of other countries expanding their security efforts against internal and external threats is growing.

    Visiongain, an independent business information provider for industries such as Defense, Energy, and Metals, forecasts nine major homeland security markets with high demand for scanning, detection, and protection capabilities.

  • Government downsizing: Although downsizing is certainly in process at the federal level, the economic downturn has already forced state and local governments to tighten their belts. The fallout from this action is varied but includes outsourcing non-core services, decreasing service levels of core services such as parks and libraries, and reducing workforce.

One result of healthcare reform is reemergence of Accountable Care Organizations (ACO), which are networks of care providers, such as physicians, hospitals, and ancillary services. The transition of these companies to form or join networks is being driven by legislation: beginning in 2012, Medicare must contract with only ACOs. Due to this shift and many others as outcome of reform, companies that positioned themselves ahead of this trend are more likely to survive and thrive.

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