Aaltodoc publication archive (Aalto University institutional repository)
School of Business | Department of Management Studies | MSc program in Management and International Business | 2015
Thesis number: 14153
Value networks in the life science industry. Case: Wound care product segment
|Title:||Value networks in the life science industry. Case: Wound care product segment|
|Year:||2015 Language: eng|
|Department:||Department of Management Studies|
|Academic subject:||MSc program in Management and International Business|
|Index terms:||johtaminen; management; kansainväliset yhtiöt; international companies; arvoketju; value chain; terveys; health; tuotteet; products; terveystalous; health economics|
|Key terms:||value; value creation; value network; life science industry; wound care|
Chronic wounds have been steadily increasing in the developed countries, caused by the combination of aging population and obesity. In the EU-27 area there are around 4 million patients yearly requiring hospital care for wounds. The total costs of treatment for a wound are around €6650-€10000 per patient. The medical supplies and equipment market, where wound care products belong to, is estimated to grow 5.8% between 2013 and 2018. These growth and value creation opportunities have been noticed by the companies in the Life Science industry.
The main focus of this study is analyzing the value creation opportunities in the Life Science industry's wound care product segment. The Life Science industry consists of several complex and connected industries from biotechnology to pharmaceuticals and health care. Academic scholars have noticed that the value network model is more suitable in the contemporary world to analyze complex industries than the traditional value chain model. In addition, wound care, healing of wounds and the way value can be created in wound care is very complicated in its nature. These were the reasons, why the research decided to analyze the value creation opportunities using the value network model. The model is intended for analyzing complex value networks consisting of different participants exchanging tangible and intangible flows to create social and economic good for their end customer. The study conducts a theoretical framework based on earlier literature focused on value, value creation and capturing, and value networks. This theoretical framework is used to identify the wound care product segment's value network and to understand how value can be created for the different participants in the network.
The study is qualitative in nature, and it is conducted using a data triangulation method combining collected online resources and gathered interview data. The online resources included consultancy reports, market reports and wound care journals. The interview data consisted of 13 interviewees from the wound care product segment's value network using the snowball sampling method. The interview data was analyzed using thematic analysis, and it was combined, compared and supported with the online resources. The analysis process was guided by the study's theoretical framework.
The main participants in the identified value network are the producers, wholesalers and the hospital. In the hospital, the hospital's management, group purchasing organization, health practitioners and patients value different things. The group purchasing organization and health practitioner have most decision making power on the hospital's wound care product portfolio and the products that are used in practice. The value network, and how value can be created, are influenced especially by the company's sales representatives and the key opinion leaders.
The study's key findings show that value can be created with the identified key success factors (Effectiveness, Cost and User Friendliness) and supportive factors (Training and Guides, Earlier User Experiences and Habit, Personal Relationships, Logistical Efficiency, Company's Product Portfolio and Home Country Orientation). For a product to create value in the value network, it has to be at least effective, but also have one of the two other key success factors. Additional value can then be created with the supportive factors. The value proposition has to be supported with user based and scientific research. In addition, the study provides a map of the tangible and intangible flows present in the wound care product segment's value network.
Master's theses are stored at Learning Centre in Otaniemi.