Executive Summary
The key issue facing GEHS today is that despite high potential growth in both the developed and developing markets traditional B2B marketing lines are slow; the buyers control the power and the end consumer (patients) sees GEHS and its competitors as “faceless” corporations and their countries health care services as lacking. End users want cheaper, better quality, and more accessible healthcare and GEHS wants to grow market share and improve reputation. While GEHS is the current market leader there is tumultuous change happening in the market with the aging population, the increasing health education of the populace via the internet, and the increasing standard of healthcare in all countries.
This is coupled with GEHS’s new adherence to the healthymagination strategy to create shared value in all its product offerings. As such the decision to pursue production on the following product offering must be made with the goal of organic growth, value creation of 15%, market share growth, profit growth and balanced against the risk factors.
- HepEcho
- TEEmax
- UltraLipo
- Omega
Based on market and internal competency analysis the decision to pursue TEEmax, UntraLipo, and Omega was made. The campaign will focus on the end user in order to facilitate a pull strategy and lessen the sales life cycle while giving consumers what they want- choice.
Problem Statement
With significant public scrutiny and US health reforms at top-of-mind due to the Affordable Care Act General Electric (GE) is poised to turnaround their near decade worth of poor financial results. GE Healthcare Systems (GEHS) is a key growth area for the company and there is high potential growth in both the developed and developing markets in a variety of health categories. However, traditional B2B marketing lines are slow; the buyers control the power and the end consumer (patients) sees GEHS and its competitors as “faceless” corporations and their countries health care services as lacking. They want cheaper, better quality, and more accessible healthcare and GEHS wants to grow market share and improve company image. 3. Situational Analysis
GEHS is currently the market leader but there is significant competition from Siemens, Phillips, and Toshiba. GEHS is in a critical position, the market is ready for a disruption but the approach must be made carefully or they will lose their power position. As seen in the SWOT and PEST analysis in appendix 1-2 there are significant opportunities in the market that are complemented by GEHS existing strengths. The growth potential of the emerging markets, especially India and China pose a particularly attractive position. Moreover, the population worldwide is aging which brings about an increase of demand on the health care system. By 2050, there will be more than 2 billion people over the age of sixty. . Additionally, the US market has recently acquired 32 million newly insured members as a result of the Affordable Care Act.
Interestingly, there is a commonality among citizens across the globe, they all feel that their country’s health care is lacking and have a negative opinion of the industry. Looking at the psychographics of these end users it is evident that they feel this way because they are not given any choices. If they need to receive healthcare they go see a health care provider and are told what is wrong with them, what to do, which test/procedures must be done. While this may have been acceptable in the 1990s and prior with the proliferation of the internet and the ease of access to healthcare specific data these end users now are better educated and want to be part of their treatment choices. The current issue GEHS is facing though is that even if they have a product the end consumer desires the bargaining power of the purchasers, namely the hospitals and group purchasing organizations (GPOs), have the power.
They are able to delay the market acceptance of a new product by a decade, dictate product specifications, and anything else they request. Looking at Porter’s five forces in appendix 3 it is clear that without the barriers set by the purchasers GEHS would be able to be more responsive to the end user as indicated in appendix 4. As such, they are now using the healthymagination strategy to layer shared value into the new product introduction (NPI) process. This starts during product conceptualization where a target market and value created are defined before proceeding into product development. By doing this GEHS sets a requirement for all new offering to reduce costs to customers by 15%, improve quality for customers by 15%, and increase access to care for individuals by 15%.
GEHS has a number of potential offerings that are in product conceptualization detailed below but they are unsure which, if any, to proceed with. All pose their own unique set of uncertainties in terms of financial success or ability to meet the 15% requirement. Refer to appendix 7 for full details and financial implications of each offering.
Alternatives
Each product significantly differs from the other and each poses unique potential benefits and risks to GEHS. The budget would allow all products to be developed but given the small success rate of NPI only the products seen to have significant potential for creating value for GE and the end user will be proposed.
Status Quo: Do not introduce any
- HepEcho
- TEEmax
- UltraLipo
- Omega
- Evaluation of Alternatives
Small growth, expected 1000 units in year one. Reputation growth is significant plus the promotional opportunities. Quality, actual and perceived. Patients see 4D heart imaging as a value creation for them regardless if it is actually. Each unit will have to be sold at $20K minimum to break-even, if higher then net profit gain. This is a potential billion dollar segment so long-term growth is expected. Phillips is already in market
Recommendation
Based on the alternative analysis it is recommended GEHS introduce TEEmax, UltraLipo, and Omega to the market. The status quo alternative was not chosen because as an innovation company GE cannot shy away from risks, and with their diligent NPI process it will minimize the likelihood of a ‘bad’ product entering the market. HepEcho will not be pursued at this time due to the uncertainty of access to market and the cost/improved quality ratio as compared to the add-on tools expected by competitors. While the HepEcho would provide an improvement in quality for people with liver cancer it is not substantial enough to pursue at this time as resources can be used more efficiently elsewhere.
The recommendation to pursue TEEmax is two-fold; firstly it will provide value to customers who perceive 4D imaging as what they are looking for in a health offering plus it provides an additional safety to surgeons. Second, it is a highly lucrative market and Phillip’s is enjoying benefits solely, in order to defend GEHS’s position as the market leader they must actively compete in high growth markets. While there is risk and uncertainty in terms of the technology the resulting tech for this kind of imaging has multiple applications not on in the health sector so the cross-over value is deemed significant enough to pursue. The decision to pursue UltraLipo is simple, it provides value to customers who would otherwise undergo dangerous elective surgery plus it provides a huge market and income growth potential.
Critics to the decision to pursue this offering can be mitigated by showing the negative results from these elective surgeries that body sculpting will eliminate. Similarly the decision to proceed with the Omega offering is very simple, the value creation for the midwives and mothers is much greater than 15%. While there is risk involved in profitability this model will lend itself to scale in other 3rd world countries like China and India where demand for healthcare is growing and the Omega is a great social good introductory product to gain consumer loyalty.
Action Plan
Firstly, all offering should be promoted to the end consumer, not just through the traditional B2B channels. By doing this GEHS will force a pull strategy as consumers request for these products. This will minimize the risk of ten year product sales lead times that are currently rampant in the industry. It is also recommended that GEHS uses its website and a twitter account to highlight their value creating innovations. All products should eventually be marketed globally if needs are identified. Specific action plans for each product offering is as follows: TEEmax
It is critical for all communication to be tactful and show that GEHS is promoting the TEEmax because is it the best product for a person facing this situation. Using social media to interact with user and support base of on: Medical websites like WebMD and those specific to heart and mitral valve surgery Blogs and community support group for heart disease
Create whitepapers and informational about heart disease and publish on website. Ensure all communication links back to GEHS website
UltraLipo. Traditional mass media marketing as well as social media marketing will be used to promote and educate consumers about UltraLipo. It is recommended GEHS market to Canada and Europe while waiting for stricter USA testing. TV spots on female age 35-45 specific television, i.e. Downtown Abbey Partnership with fitness facility like Goodlife Fitness
Radio advertisements on local channels Facebook, Youtube, Instagram will all be used to show before and after photos and videos of process to show ease of consumption Advertisements on plastic surgery blogs, community chat rooms Omega
Omega will have to be introduced with the Indonesian government. They will facilitate introduction and product will be promoted in more traditional methods to respect local culture and to encourage learning. Each Omega will come with a quick reference card with usage tips. 8. Conclusion
In order for GEHS to achieve organic growth in the future in must continue to innovate, create shared value-whether actual or perceived, and meet the need of the end user not the purchaser of the offering.
