Medtronic
SID: 314018573!
Executive Summary
As one of the fastest-changing industries in the world, the healthcare industry recently recognized the necessity of business model innovation. In order to stay competitive, the medical device producer Medtronic was one of the first companies in the industry to introduce an innovative business model on top of its traditional one. Instead of only providing its customers with the medical device, Medtronic is now providing integrated medical solutions to hospitals, including the rental of its products. Taking into account the organization’s industry and its competitive and regulatory environment, the present paper evaluates the sustainability of both business models separately as well as when operating in tandem. Whilst Medtronic has to consider current challenges of its new solutions-business, this new business model lets the organization stay competitive, thus reasonably reinforcing its traditional business.
!
1!
SID: 314018573!
Table of Contents
1. Introduction .............................................................................................................. 3
2. The Organisation and its Industry............................................................................ 3
3. Analysis of the Business Models ............................................................................. 4
3.1 Medtronic’s Traditional Business Model ............................................................ 5
3.2 Medtronic’s New Business Model ...................................................................... 5
4. Challenges and Recommendations......................................................................... 6
5. Evaluation and Conclusion ...................................................................................... 7
6. References .............................................................................................................. 9
7.
Executive Summary
As one of the fastest-changing industries in the world, the healthcare industry recently recognized the necessity of business model innovation. In order to stay competitive, the medical device producer Medtronic was one of the first companies in the industry to introduce an innovative business model on top of its traditional one. Instead of only providing its customers with the medical device, Medtronic is now providing integrated medical solutions to hospitals, including the rental of its products. Taking into account the organization’s industry and its competitive and regulatory environment, the present paper evaluates the sustainability of both business models separately as well as when operating in tandem. Whilst Medtronic has to consider current challenges of its new solutions-business, this new business model lets the organization stay competitive, thus reasonably reinforcing its traditional business.
!
1!
SID: 314018573!
Table of Contents
1. Introduction .............................................................................................................. 3
2. The Organisation and its Industry............................................................................ 3
3. Analysis of the Business Models ............................................................................. 4
3.1 Medtronic’s Traditional Business Model ............................................................ 5
3.2 Medtronic’s New Business Model ...................................................................... 5
4. Challenges and Recommendations......................................................................... 6
5. Evaluation and Conclusion ...................................................................................... 7
6. References .............................................................................................................. 9
7.
References: Cairns, E. (September 16th 2013). Fresenius Deal Underlines Growing Importance of Hospital Sector Dolan, B. (June 28th 2011). Medtronic launches first app for implantable devices. Retrieved September 12th 2014 from http://mobihealthnews.com/11508/medtronic-launchesfirst-app-for-implantable-devices/ Ettenson, R., Conrado, E., & Knowles, J. (2013). Rethinking the 4 P 's. Harvard Business Review. Giard, R. M. (2010). Complaints about bureaucracy in health care? Time for a proactive medical profession Graham, J. R. (August 24th 2013). Medtronic is Changing Its Business. Will The System Let It? Forbes Website Framework For Business-Model Innovation. HealthAffairs , 27 (5), 1329-1335. Mddionline.com. (December 14th 2013). Top 40 Medical Device Companies. Retrieved September 12th 2014 from: http://www.mddionline.com/article/top-40-medical-devicecompanies/ Medtronic. (August 29th 2013). Medtronic To Set Up Global Center Of Excellence In Singapore For Business Model Innovation PwC. (October 2013). Medtech companies prepare for an innovation makeove . HRI on Innovation.