Introduction
GE Healthcare Limited is a subsidiary of the General Electric Company and is based in Chalfont St Giles, United Kingdom with an additional office in Marlborough, Massachusetts and operates as a subsidiary of General Electric Company (Brown 1998). The company has a “healthymagination” vision for the future invites the world to join its journey as they continuously develop innovations focused on reducing costs, increasing access and improving quality around the world. Based on this vision, the company provides clients, patients and healthcare professionals with transformational medical services and technologies across the globe with main areas of specialization by this company falls under four major categories as: medical imaging, medical diagnosis, information technologies, and life sciences see figure 1. The leaders of the market strive for global change in the market. It has managed to make a successful shift in adopting a sustainable healthcare in the business market (Chesbrough 2006). The existence of the ‘healthimagination vision’ of the care centre provides an opportunity to the world to embark on a journey of innovation.
Existing Business Model Analysis
To analyze the existing business model of the GE healthcare, Afuah (2014) BM framework focuses of five main components will be used based on the product portfolio as mentioned in figure 1. To critically analyze this BM model, it is very important to have a clear overview of the company’s existing business model portrait and it is drawn in figure 2. And from this analysis, the key drivers, opportunities, industry-specific challenges, and other critical issue are identified through the macro external environment see appendix 1.
The key drivers are the highest death number due to mental disease (Alzheimer’s and dementia) in the UK(National Statistics 2017), and unmet market demand through increase number of neurological patients’ needs early detection of the mental diseases through brain diagnosis/monitoring devices. According the Alzheimer’s society reports 850,000 individuals are living with dementia in UK and this is estimated to increase to one million by 2025(Nelson 1993). Diagnosis rates in high income countries are below half, falling to 10-20% in lower-middle income countries, where awareness is even lower (Nonaka and Takeuchi 1995). As stated in the World Alzheimer’s Report (2015), achieving acceptable levels of coverage and access to care is the challenge currently being faced. Early diagnosis is the key. This gives the GE healthcare an opportunity to enter the new market of customers through new innovation product, with the challenge of quality, reliability and low cost. Another critical identified is the adaptability by the new market. This analysis propels introduction of a low-cost innovative brain monitoring/diagnostic device new product will be incorporated into the performance of this organization thereby generating value to this organization. Based on this analysis, this report focuses on existing products portfolio of GE Healthcare Diagnostic Imaging used for brain monitoring/diagnosing purpose are includes; Computed Tomography (CT), Magnetic Resonance (MR) and Molecular Imaging technologies. Using the Afuah (2014) business model (BM) framework, the existing business model is analysed.
The industry ecosystem’s components are competitors, suppliers, customers, complementors, substitutes, and other institutions, which GE healthcare has to cooperate, are analysed.
Market share of GE healthcare
The competitor of GE health care includes Hitachi Medical Corporation, Philips health care, Siemens health care and Toshiba medical systems (Nonaka and Teece 2001). Apart from this top competitor in developing brain, devices include Nihon Kohden, Agilent Technologies, Illumina, Thermo Fisher and Quintiles.
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Industry
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Market share
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Compact ultra sound industry
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43%
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Healthcare solutions
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40%
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Information Systems Market
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13%
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Ultrasound market
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27%
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Table: Market share of GE in different industries
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Top five companies for brain monitoring/diagnosis devices
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Market share
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Nihon Kohden
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30%
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Agilent Technologies
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18%
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Illumina
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20%
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Thermo Fisher
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15%
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Quintiles
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17%
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The number of customers counts when assessing the profitability potential of a business model. – please use not and create your own figure.
Innovatory product
Based on the BM analysis,a pocket size EEG can introduced in the current market in the current product portfolio as shown in figure x. This new product will have the features as listed in table 1, and is developed on the basis of figure x. This will improve the medical health benefit by reducing the neurodiagnostic procedures through its low-price.
Table 1: Pocket-size EEG, products feature and benefit.
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The product can be carried around easily without effort
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It helps in measuring the neural activities of the brain
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The product can help in analysing the thoughts inside the head of a person
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The price of the products are pocket friendly
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It can help in strengthening the mind
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It is a wireless device and thus can be used any time
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In the modern day, the brain waves can be monitored with the help of mobile phones
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It helps in relaxing the mind from any type of stress
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b. New business model
This new innovatory product will make some changes in the existing business model of GE healthcare as mentioned in the figure below.
The VARIM framework denotes that capabilities that goes on in a business model. It denotes whether the business model offers benefits or challenges to the customers. The five components of the model play a major role in identifying the manner in which a business model can be applied it in the market. The VARIM framework helps in analysing the market competitors and the capabilities that are held by the company (Burns and Stalker 1994). In the case of GE health care, the company can apply the VARIM framework to analyse the manner in which it can continue to give productivity in the health care sectors. For example, loyalty of the customers can be determined by the return it receives from the sale of the product and the value it holds in the market (Chesbrough 2003). GE needs to determine whether the activities of the centre can be imitated by the competitors by developing a proper cost structure that can help in implementing the necessary changes for secrecy in the company.
Market Potential
The global brain monitoring devices market to grow at a CAGR of 8.72% during the period 2017-2021 (Christensen 1997).
The market potential for the product includes the manner in which the younger generation adopts the latest technology. The easy to wear headgear can be considered as a manner in which the young people can be targeted so that stress can be reduced. The reduction of stress is one of the most important aspects that need to be considered by the makers of the EEG device.
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Buy process
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The process of buying the device includes analysing the potential opportunities it provides to the market and the manner in which it can be implemented in satisfying the customers. Customers can purchase the products either from the official website of the GE or from any health care supply centres that provide such products.
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Customer’s psychology
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The fact that it is light in weight and can fit on a head in an easy manner can attract the customers. The psychology is that customers does not have to fill any type of burden on their heads after wearing the device
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Market positioning
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The market positioning has to be based in an area that can provide opportunities for the business to grow. Based on the market share, GE health care is placed at the number one position in the market.
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Price
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GE can provide pocket friendly price of the products so that there exists an opportunity for every people to avail the products. This is one area in which GE can exceed its competitors
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Features
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The product is light in weight and is wireless, which means it can be used anywhere and at anytime (Dawson and Andriopoulos 2014)
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Customer analysis
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Lifestyle of the customers
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The lifestyle of the customer’s needs to be assessed by the managers of GE so that they can manufacture the product in a productive manner. The manner in which this can be done includes conducting a proper survey of the customers and the responses they provide in the samples (Goffin and Mitchell 2010)
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Product development
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The product development needs to be such that it reaches the customers and provide the proper solution so that the reason for the development of the product can be utilised. The product need to serve its purpose and ensure that the customers remain satisfied with the type of product
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Behaviour of the customers
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Behaviour of the customers is important as it determines the personality of the customers. The customers need to be aware of the type of products that they are being given and based on it; the determinants of the quality of the products are conducted. Thus, the customers can provide a positive behaviour for the development and utilisation of the product.
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Geographic location
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Geographic location of the people can help GE to promote its device. The EEG device can be readily available to the people that belong in a close proximity of the organisation (Bessant and Tidd 2013). Thus, the managers of the company can distribute the product without having to incur much transportation cost.
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Such a technology has been manufactured in the developed market and the countries in which the products are developed usually have population that prefer less workload and easy accessibility. Market pull refers to the introduction of product ideas that are manufactured after responding to the market forces. The demand from the customers about new and improved product determines the market pull of a product. In this case, the EEG product of GE health care can undergo a market pull and is radical in the known market of the business environment (Jones, Conway and Steward 2001). This is because the demands of the customers suffering from excess stress are the fact that they want a headgear device that can be easily portable to anywhere they go. Therefore, the innovation map that can be analysed includes a four-step model that includes a definition of the process, discover the potential opportunities of the model, develop designs that can be effective for the collaboration of the model and demonstrate the model in public.
Porter’s five forces model can be used to identify the differences that exist in the market. The cost and differentiation factors of the products offered by EEG can be used to analyse the competitive advantage it may receive in the market. GE can differentiate itself from the competitors by analysing the cost at which the company sells the products. It can be used as a diagnostic tool so that GE can differentiate the products it has in the market. Thus, GE can improve on the quality of the EEG machines that it manufactures (Kaplan and Norton 2004).
The product life cycle determines the manner in which products of a company can respond and survive in the market. The graph highlights the phrases that a product undergoes in the market and the manner in which the consistency can be maintained in the market. In the case of GE health care, the pocket size EEG can be a huge success in the market and research have provided significance that the product is at a maturity stage in the market (Leonard 1998). The manner in which GE has managed to develop its products highlights the growth of the company. At the maturity stage, this particular product has been a favourite among the people that have used it and gained clinical success.
Based on the analysis of the device, it can be said that the device has been an open innovation in the field of medical research. The health care centres had not thought of such innovation prior to the steps taken by GE health care. Thus, it can be said that the product falls under the category of capabilities building.
Currently the market is in a buy-out stage as the product is new and people enjoying innovation at work can use it to understand the potential it provides in the market (Porter 1998).
From the analysis of the framework, it can be seen that certain factors contribute in establishing the required product in the market. The initial factor includes the environmental factors that can be analysed using a PESTEL analysis. The PESTEL analysis provides an idea about the manner in which different factors in a business contribute in helping an organisation gain success in the market. As such, the PESTEL analysis can be done using the existing factors
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Political & legal
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The political and legal factors are different in various countries and it is important that GE analyse these factors so that it can help in identifying the cause for hindrance in the market
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Economic
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Economy in every country fluctuates and as a result of the fluctuation predicting the demand supply can be difficult for the company. The entrepreneurship of the company need to be based on the changes that exist within the industry and the manner in which the economic condition of UK can change (Afuah 2014).
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Social & demographic
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Unmet need. (population suffering from )
Uneven quality of care – death rate is highest in the UK market
Mental disease detected at the late stage. Hence, it is necessary to implement the product in the UK by analysing the rate at which the UK health care organisations can afford to maintain success with the people.
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Technological
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The technological factors include the development of modern equipments. UK is a developed market and technology can have its positive impact on the market (Lundvall 2010)
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Legal
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The legal jurisdiction includes the laws related to employment and labour that may be a threat for the products. Apart from this the use of the product in an unethical manner can also contribute as a main law of UK and the people need to be abide by it
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Environmental
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The environmental law provides for the sustainability factor in the market. It has been seen that working on sustainability has been one of the aims of GE health care and it is important that the company maintaining its sustainability practise in the market
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Market Viability
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Criteria
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Inadequate
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Similar to competitors
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Better than competitors
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Excellent
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Uncertain
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Potential of a viable and credible market opportunity
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YES
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YES
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YES
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Strategies for managing:
•Customers
•Suppliers
•Competitors
•Other external factors
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YES
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YES
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Ability to create a new business without damaging parent organization
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YES
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YES
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YES
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Resource Viability
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Criteria
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Inadequate
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Similar to competitors
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Better than competitors
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Excellent
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Uncertain
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Evaluate the corporation’s budget in the context of a new venture
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NO
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YES
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NO
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NO
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NO
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Evaluate the possibility of raising additional funds for the new venture
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YES
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NO
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YES
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NO
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NO
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Evaluate the adequacy of facilities available to the new venture
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NO
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YES
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YES
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YES
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NO
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Commercialization Viability
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Criteria
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Inadequate
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Similar to competitors
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Better than competitors
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Excellent
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Uncertain
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Evaluate the schedule in terms of:
R&D, IPR, human resources, marketing, service delivery
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YES
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NO
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YES
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NO
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NO
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The new venture’s ability to successfully compete in the market
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YES
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YES
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YES
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NO
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NO
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The new venture’s channels of distribution
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YES
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NO
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YES
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NO
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YES
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Customer service philosophy
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YES
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NO
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NO
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YES
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NO
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Capabilities:
•Financial control
•Management
•Strategic planning
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NO
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YES
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NO
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YES
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NO
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- Challenges and obstacles faced
The implementation of the model can be based on the manner that provides assistance to the brain and provides a relaxation to the head. However, certain challenges can be faced that may cause hindrance in the manufacturing of the products (Brown, 1998). These may be obstacles as only the developed countries can implement the technique but the other countries are deprived of the consequences of the product.
Bibliography
Afuah, A., 2014. Business model innovation: concepts, analysis, and cases. Routledge.
Bessant, J. and Tidd, J. (2013) Managing Innovation: Integrating Technological, Market and Organizational Change (5th ed.) Chichester, Wiley.
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Chesbrough, H. (2003) Open Innovation: The New Imperative for Creating and Profiting From Technology, Harvard Business School Press.
Chesbrough, H. (2006) Open Business Models: How to Thrive in the New Innovation Landscape, Harvard Business School Press.
Christensen, C. (1997) The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail, HBS Press.
Dawson, P., and Andriopoulos, C. (2014) Managing Change, Creativity and Innovation, London, Sage.
Goffin, K. and Mitchell, (2010) Innovation management: strategy and implementation using the pentathlon framework, Basingstoke, Palgrave Macmillan (2nd edition).
Jones, O., Conway, S and Steward, F. (eds.) (2001) Social Interaction and Organisational Change: Aston Perspectives on Innovation Networks, Imperial College Press, London.
Kaplan, R. and Norton, D. (2004) Strategy Maps: Converting Intangible Assets into Tangible Outcomes, Boston, HBS Press.
Leonard, D. (1998) Wellsprings of Knowledge, Boston, HBS.
Lundvall, B-A (2010) National Systems of Innovation: Towards a Theory of Innovation and Interactive Learning (electronic book).
Nelson, R.R. (1993) National Systems of Innovation: A Comparative Analysis, OUP.
Nonaka, I and Takeuchi, H. (1995) The Knowledge Creating Company: How Japanese Companies Create the Dynamics of Innovation, Oxford University Press.
Nonaka, I and Teece, D. (2001) Managing Industrial Knowledge: Creation, Transfer and Utilization, London, Sage.
Nonaka, I., Toyama, R. and Hirata, T. (2008) Managing Flow: A Process Theory of the Knowledge-Based Firm (electronic book).
Porter, M. (1998) The Competitive Advantage of Nations, New York, Free Press.
