2018, von Kutzschenbach, Michael, Schmid, Alexander, Schoenenberger, Lukas, Dornberger, Rolf

The rapid innovation of digital technologies poses a significant challenge to the healthcare sector. Digital technologies are transforming stakeholder relationships among established industry actors, including those of manufacturers, hospitals, and patients. To be ahead of competitors and to maintain profitability, medical device technology manufacturers (medtech companies) are urged to shift their business focus from product to customer excellence and thus invest in service offerings, focusing on the costs of alternative value delivery and patient outcomes. Such investments require a systemic and holistic understanding of how these changes in strategy affect the external and internal competitive environment. In this chapter, we propose the use of feedback systems thinking to explore the intended and unintended consequences of shifts in strategy, from sequential value chains to platform-oriented thinking. Taking the perspective of a medtech company in the value chain, we highlight challenges arising from hidden limits to growth that prevent the realization of intended achievements. Based on this, we develop hypotheses for the intended and unintended consequences of investing in digital service offerings. We conclude with a discussion of how systems thinking and modeling can support digital strategy development.