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    Case Study

    ResMed, Inc.: The shift to connected medical devices

    By Goutam Challagalla, Bernard J. Jaworski and David Gray
    20 pages
    February 2019
    Order this case study
    Reference: IMD-7-1858

    The case examines the decisions and actions taken by ResMed’s company leadership over a five-year period to transform the maker of medical devices for sleep apnea from a product-focused business into a “health informatics” company. While the company had a long and successful history of growth and innovation, company leaders anticipated radical change in the market, including competitive threats from lower-cost rivals as well as a shifting landscape for healthcare reimbursement in the United States, ResMed’s largest market. Beginning with the acquisition of a specialized healthcare data analytics company in 2012, ResMed invested heavily in new device platforms and software that enabled it to gather and analyze a vast quantity of patient data. The information gathered through the company’s CPAP devices could be used to improve patient care and enhance profitability for ResMed’s Home Medical Equipment (HME) customers. The strategy, however, required a wholesale transformation of all aspects of the company’s operations and marketing processes to deliver and communicate the value of its new offerings. ResMed’s leaders also faced the challenge of explaining and justifying to investors how the new “connected care” strategy produced value for the company. The case explores a number of key decisions related to technology choices, pricing strategy, and the integration of software capabilities into a company that had traditionally focused on product engineering. The case also looks at ResMed’s decision to “double down” on its digital transformation with the acquisition in 2016 of Brightree, a provider of cloud-based clinical, billing and business management solutions for healthcare customers.

    Learning Objective
    • Examine the technical, managerial, and cultural challenges involved in a digital transformation of a successful engineering company.
    • Understand leadership decision-making processes related to technology choice and pricing strategy.
    • Examine a corporate process for performing a market assessment, exploring strategic options, and making the ‘case for change’ to internal and external stakeholders.
    Keywords
    Strategy, Connected Device, Internet of Things, Medical Device, Customer Journey, Value Proposition, Market Expansion, Innovation, Healthcare, Informatics, Sleep Apnea, Home Medical Equipment, Continuous Positive Airway Pressure, Healthcare Costs, Cloud Computing, Analytics
    Settings
    Northern America, United States of America
    ResMed, Healthcare
    2016-2018
    Type
    Field Research
    Copyright
    © 2019
    Available Languages
    English
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    Copyright ©2024
    Copyright owner IMD Copyright
    Organization Daikin Industries
    Industry Consumer Goods, Home Appliances
    Available Languages English
    Contact

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    By Kazuo Ichijo and Yunfei Feng
    Case reference: IMD-7-2618, © 2024
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    By Joep de Caluwé
    in I by IMD
    Summary
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    Read more
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    By Jean-Claude Gallet
    in I by IMD
    Summary
    How quick thinking, strategic choices, and trust in the team kept one of the world’s most iconic landmarks from destruction – lessons every leader can apply in times of crisis.
    Read more
    Contact

    Research Information & Knowledge Hub for additional information on IMD publications

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