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In 2017, Philips' goal was to use innovation to improve the lives of three billion people a year by 2025. To achieve that, the company was shifting from selling medical products in a transactional manner to providing integrated healthcare solutions based on digital health technology. Based on our interviews with 23 executives at Philips, the case examines the two directions of the transformation required by this shift: externally, Philips worked on transforming how healthcare was conducted. Healthcare professionals would have to change the way they worked and reimbursement schemes needed to change to incentivize payers, providers, and patients in vastly different ways. Internally, Philips needed to redesign how its employees worked. The company componentized its business, introduced digital platforms, and co-created integrated solutions with the various stakeholders of the healthcare industry. In other words: Philips was transforming itself in order the reinvent healthcare in the digital age.
By 2019, Germany-based Kärcher, “the world’s leading provider of cleaning technology,” had turned its professional cleaning devices into IoT products. The data generated by these IoT-connected cleaning devices formed a key ingredient in the company’s ongoing strategic shift in its B2B business: Kärcher was transforming from a seller of cleaning devices to a provider of consulting services in order to help professional cleaning companies improve their cleaning processes. Based on interviews with seven IT- and non-IT executives, the case illustrates how the company learned to generate value from IoT products. And it demonstrates how a family-owned company transformed its organization in order to be able to more effectively develop and provide IoT products, while adding roles, developing technology platforms, and changing organizational structures and ways of working.