How Smart, Connected Products Are Transforming Competition

Michael E. Porter; James E. Heppelmann

Article | Harvard Business Review

How Smart, Connected Products Are Transforming Competition

by Michael E. Porter and James E. Heppelmann

Abstract

Information technology is revolutionizing products. Once composed solely of mechanical and electrical parts, products have become complex systems that combine hardware, sensors, data storage, microprocessors, software, and connectivity in myriad ways. These "smart, connected products"—made possible by vast improvements in processing power and device miniaturization and by the network benefits of ubiquitous wireless connectivity—have unleashed a new era of competition.

Keywords: strategy; information technology; Competition; Information Technology; Transformation; Information Technology Industry;

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Citation:

Porter, Michael E., and James E. Heppelmann. "How Smart, Connected Products Are Transforming Competition." Harvard Business Review 92, no. 11 (November 2014): 64–88.

Since its establishment in 2005, Hamburg's Martini Klinik had single-mindedly focused on prostate cancer care with a commitment to measure long-term health outcomes for every patient. A wholly owned subsidiary of the Hamburg University Hospital, Martini was a "hospital in a hospital" in close proximity to other hospital departments and services. By 2013, Martini Klinik had become the largest prostate cancer treatment program in the world with 5,000 outpatient cases and more than 2,200 surgical cases annually, with patients coming from all over Germany and from other countries. However, German private insurers were cutting reimbursement for prostate cancer by 15 percent, and denying extra payment for some new procedures, while reimbursement by public health plans was not covering costs. Dr. Hartwig Huland, Martini's founder and Medical Director, was considering how to respond.

Case | HBS Case Collection | February 2009 (Revised June 2019)

Cleveland Clinic: Transformation and Growth 2015

Michael E. Porter and Elizabeth O. Teisberg

The Cleveland Clinic's health care services are internationally renowned for quality. In 2008, The Clinic began to restructure the organization into teams defined around patient needs, rather than traditional medical specialties. "Patients First!" takes shape as the teams measure and report outcomes, coordinate care, and develop to support improving value for patients. In addition to restructuring care delivery in the hospitals and throughout northeastern Ohio, The Clinic has investments, facilities, and staff in several other states in the U.S. as well as in Canada and Abu Dhabi. Now in 2015, as the Clinic's domestic and international footprint continues to expand, its leadership is also focused in maintaining the Cleveland Clinic brand and providing optimal clinical care. Students can explore strategy transformation, geographic expansion, the process of introducing new measurement approaches, alignment of activities with strategic goals, and issues in leading change both within a company and across an economic sector.

Keywords: health; health care operations; health care quality; health care; strategy and leadership; strategy development; Health Care and Treatment; Leading Change; Goals and Objectives; Growth and Development Strategy; Measurement and Metrics; Service Delivery; Organizational Change and Adaptation; Outcome or Result; Health Industry; Cleveland;

Citation:

Porter, Michael E., and Elizabeth O. Teisberg. "Cleveland Clinic: Transformation and Growth 2015." Harvard Business School Case 709-473, February 2009. (Revised June 2019.) View Details

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How Smart, Connected Products Are Transforming Competition

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