Innovation and Entrepreneurship in GE Healthcare: Analysis and New Business Model

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This report analyses the existing business model of GE Healthcare and proposes a new innovatory product to improve medical health benefits. The report also includes a new business model for GE Healthcare based on the VARIM framework.

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Running head: INNOVATION AND ENTREPRENEURSHIP
Innovation and Entrepreneurship
Name of the Student
Name of the University
Author note

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2INNOVATION AND ENTREPRENEURSHIP
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
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3INNOVATION AND ENTREPRENEURSHIP
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.
Industry Market share
Compact ultra sound industry 43%
Healthcare solutions 40%
Information Systems Market 13%
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4INNOVATION AND ENTREPRENEURSHIP
Ultrasound market 27%
Table: Market share of GE in different industries
43%
20%
16%
21%
GE
Philips healthcare
Siemens healthcare
Toshiba medical
Figure: General market share of GE and other competitors
Top five companies for brain
monitoring/diagnosis devices
Market share
Nihon Kohden 30%
Agilent Technologies 18%
Illumina 20%
Thermo Fisher 15%
Quintiles 17%
30%
18%
20%
15%
17%
Nihon Kohden
Agilent Technologies
Illumina
Thermo Fisher
Quintiles

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Figure: Brain device competitors of GE
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.
DeepandbroadhealthcareportfolioDiagnosticequipmentDiagnosticimagingCATScanPortableClinicalproductsPocket-sizeClinicalusage/tobeusedbymedicalprofessionalsVscanfamily(ultrasound)PortableelectroenchephlographInformationtechnologyLifescienceMedicaldiagnosticCBC
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6INNOVATION AND ENTREPRENEURSHIP
Figure : new product portfolio with the introduction of the new innovation product
Image 1 Source: HE Reports
(Keller, 2015)
Table 1: Pocket-size EEG, products feature and benefit.
The product can be carried around easily
without effort
It helps in measuring the neural activities of
the brain
The product can help in analysing the
thoughts inside the head of a person
The price of the products are pocket friendly
It can help in strengthening the mind It is a wireless device and thus can be used
any time
In the modern day, the brain waves can be
monitored with the help of mobile phones
It helps in relaxing the mind from any type
of stress
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M:
1. Return on sales
2. Correct pricing
3. Importance of complimentary assets
4. Desperate customers
Value: 1.Loyalty of the customers
2. Compensation
3 Quality of resources
4. Reputation
I: 1. Competitors holding ability to imitate
2. Resources of the centre cannot be imitated
3. Activities of the centre cannot be imitated
4. Rare quality services
: 1: Number of companies with substitutes
2. Benefits provided to the customers
3. Pocket friendly price
4. Cost structure
7INNOVATION AND ENTREPRENEURSHIP
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.
Marketsegment..1.Targetpeoplethathavedisfunctionsinthebrain2.Entreingintothemarketthatdeliverssmallsieandlowcostoftheproducts3.TheusersoftheproductsneedtoremiancomfortablewiththeproductstheywearCapabilities1.Pocket-sizetechnology2.BrandingandsupportfromtheITdepartment3.Theresearchanddevelopmentofdigitalsolutionandthemanagementofinformationbasedoncloudmonitoring4.Theresourcesandtalentmanagementabilityofthecompanycanbedeterminedwiththesuccessoftheproduct.

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A: 1. New products in the market
2. Revenue generated from the products
3. Flexibility of the products
4. Valuable capabilities
8INNOVATION AND ENTREPRENEURSHIP
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.
Buy
process
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.
Customer’s
psychology
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
Market
positioning
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.
Price GE can provide pocket friendly price of the products so that there exists an
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9INNOVATION AND ENTREPRENEURSHIP
opportunity for every people to avail the products. This is one area in which
GE can exceed its competitors
Features The product is light in weight and is wireless, which means it can be used
anywhere and at anytime (Dawson and Andriopoulos 2014)
2014 2015 2016 2017 2018 2019 2020
0
200000
400000
600000
800000
1000000
1200000
Sales Forecast
Sales Forecast
Figure: Sales forecast of EEG device
Customer analysis
Lifestyle of
the customers
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)
Product
development
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
Behaviour of
the customers
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.
Geographic
location
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
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10INNOVATION AND ENTREPRENEURSHIP
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.
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.
Figure: Market pull

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Figure: Radical market
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).
Figure: Product life cycle
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
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12INNOVATION AND ENTREPRENEURSHIP
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).
Figure: Corporate Entrepreneurship framework
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
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13INNOVATION AND ENTREPRENEURSHIP
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
Political & legal 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
Economic 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).
Social &
demographic
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.
Technological 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)
Legal 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
Environmental 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
(Refer to appendix).
Market Viability

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14INNOVATION AND ENTREPRENEURSHIP
Criteria Inadequat
e
Similar to
competitors
Better than
competitors
Excellent Uncertain
Potential of a
viable and
credible
market
opportunity
YES YES YES
Strategies for
managing:
•Customers
•Suppliers
•Competitors
•Other
external
factors
YES YES
Ability to
create a new
business
without
damaging
parent
organization
YES YES YES
Resource Viability
Criteria Inadequate Similar to
competitors
Better than
competitors
Excellent Uncertain
Evaluate the
corporation’s
budget in the
NO YES NO NO NO
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15INNOVATION AND ENTREPRENEURSHIP
context of a
new venture
Evaluate the
possibility of
raising
additional
funds for the
new venture
YES NO YES NO NO
Evaluate the
adequacy of
facilities
available to the
new venture
NO YES YES YES NO
Commercialization Viability
Criteria Inadequate Similar to
competitors
Better than
competitors
Excellent Uncertain
Evaluate the
schedule in terms
of:
R&D, IPR, human
resources,
marketing, service
delivery
YES NO YES NO NO
The new venture’s
ability to
successfully
compete in the
YES YES YES NO NO
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16INNOVATION AND ENTREPRENEURSHIP
market
The new venture’s
channels of
distribution
YES NO YES NO YES
Customer service
philosophy
YES NO NO YES NO
Capabilities:
•Financial control
•Management
•Strategic planning
NO YES NO YES NO
c. 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.

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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.
Brown, A. (1998) Organisational Culture, London, Financial Times (2nd edition).
Burns, T. and Stalker, G.M. (1994) The Management of Innovation, Oxford University Press.
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.
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18INNOVATION AND ENTREPRENEURSHIP
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.
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19INNOVATION AND ENTREPRENEURSHIP
Appendices
Appendix 1: external environment analysis using PLESTEL model.
Political ï‚· Intellectual property challenges
ï‚· NHS: $22.5B-$30B efficiency savings required
ï‚· GPs to control 80% ($120B) of health budget
(GE Healthcare , 2010)
ï‚· Primary care accountability for patient pathways
ï‚· Plans for quality standards
Economic ï‚· BREXIT impact on the health care industry may
increase the cost of the product in the UK
market.
ï‚· Increase in the tariff may also increase the
product’s price in the healthcare sector.
ï‚· Relevancy of the product development &
innovation must have economic relevance.
ï‚· The existing neuro-diagnostic procedures high in
cost.
Social ï‚· Unmet market need. Diagnosis rates in high-
income countries are below half, falling to 10-
20% in lower-middle income countries, where
awareness is even lower.
ï‚· Death due to mental disease is the number one
reason among the top five reasons of death in the
UK and the list also include heart diseases as the
second highest reason (National Statistics
2017). This may be due to uneven quality
of care
ï‚· death rate is highest in the UK
ï‚· Mental disease are detected at the late stage.
ï‚· 850,000 individuals are living with dementia in
the UK and this is estimated to increase to one
million by 2025.

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20INNOVATION AND ENTREPRENEURSHIP
ï‚· 5 million Americans and 47 million
people worldwide were afflicted
with it, and that number is
projected to increase to 75 million
globally by 2030.
ï‚·
Technological ï‚· Opportunity to develop new technology product
which is portable, pocket size and can be used
for early diagnosis.
 New product’s potential (pocket-size EEG/ or
wireless mobile- EEG headsets) to generate new
business
 Demand of the new product’s (pocket-size)
technology, adaptation of by the customers.
ï‚· Technology of the new product should be easy to
use by customers.
 New product’s quality and reliability for
diagnosis, and monitoring should be comparable
with the existing products used for similar
function.
ï‚· IT support, communication with patient, data
management.
Legal  New product’s approval with numerous
regulatory (such as NHS for UK and FDA for
USA market) and legislative restrictions in the
healthcare field.
Environmental  Carbon impact in product’s manufacturing
ï‚· Shareholders and partners looks for improved
corporate social responsibility.
Appendix 2: GE healthcare UK product’s categories source
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21INNOVATION AND ENTREPRENEURSHIP
Appendix 3: GE healthcare limited business model portrait
DeepandbroadhealthcareportfolioDiagnosticequipmentMagneticresonance(MRI)FunctionalMRICardiacMRICTUltrasoundPortableultrasoundPocket-size(VSCAN)InformationtechnologyLifescienceMedicaldiagnostic
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22INNOVATION AND ENTREPRENEURSHIP
Valueproposition1.Largecustomers(bothmedicalprofessionalsandnon-professionals)networks2.GEhealthcarebrand3.Customerneedbasedproducts4.GEisaleaderinneurologicalmonitoringdevlcies(CARESCAPEMONITORetc.),andVSCAN(ultrasoundtechnology)5.ProductswithITsuport,andtrainingsofmedicalprofessional6.GEhealthcareisMarketsegment..1.Entryinthepocket-sizedevicesthroughVSCANintheUKmarketandareeasytouse,andsmallsize,lowcost,andportable2.Topfivevendorsforneurologicaldiseasemonitoring.3.TrainingofmedicalprofessionalsforGEhealthcareproducts4.Enteringintonewmarketof'outsideclinics'throughpocket-sizeprodGrowthmodel1.Seeksanddefendsintellectualpropertyrights2.Ultrasoundpocket-size(VSCAN)developmentbasedonstrongmarketfundamentalsandeconomics.3.CustomerbackedR&D,optimizedsuccessinmarket,premiumtoValueinallcaresettings.4.FastInnovation,andproductcostout>(10)%/year5.Generalusageofpocket-sizeproducts,mentalhealth,clinicusers,non-medicalprRevenuemodel.1.Lowcostmodeldevelopmentthroughreducedsourcingcost,valueengineering&design,quality&realibility2.Revenuefromproduct'ssupportingservice3.RevenuefromITtechnologyfortheseproductsCapabilities1.Resources:Brand,patents,licencing,Pocket-sizedevices,neurologicalmonitoringdevlcies,ITsoftwares,2.Activites:InternalR&D,productsupport,ITsupport,existingproduct'scomponentssupply,imporvementofnewproducts,cloudmanagement,digitalsolutions,fastinnovation,frequ
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