The Role of Integrating Customer-Orientation View in product Development to Sustain Competitive Advantage. A case study in the digital healthcare industry

Abstract

The healthcare sector in Sweden is undergoing a transition driven by digitalization, increased demand, and COVID-19. Receiving healthcare has traditionally been through physical contact between doctor and patient, but digital healthcare apps have changed the contact form. These apps allow patients to easily schedule visits and interact with doctors without geographical and time limitations. Today, the customers have access to more information and control over their decision and can easily switch to other alternatives which increases the competition in the digital healthcare market. However, little is known about this market in general and how the transitioning from physical to digital healthcare is shifting the power from doctor to patients. This study aims to investigate what are key sources of competitive advantage in this market and how digital healthcare companies in Sweden implement customer orientation into their product development to sustain competitive advantage in the market. To find this out, semi-structured interviews were conducted with five major Swedish digital healthcare companies. A theoretical framework was developed based on a literature review about competitive advantage and customer orientation to be then analyzed and discussed together with the empirical findings. Findings show that the competition in the digital healthcare market is high and innovative services can easily be imitated. Additionally, setting a low price can not either be used as a differentiation strategy to attract customers due to the high regulation from the government. Therefore, innovation and price differentiation are not the sources of competitive advantage in this market. Instead, customer satisfaction is a crucial source to sustain competitive advantage. This thesis identified five factors that companies focus on to increase customer satisfaction: accessibility and visibility, targeting a specific customer group, minimizing the queue time, service quality, service design, and trust. Digital healthcare companies try to gain an understanding of customers through collecting data with different measurement systems. The data is then used to enhance product development based on customer needs which increase customer satisfaction. We outline how two different measurement methods, traditional, interviews and technical which include in-app interactions, analytics, and algorithmic, are used as distinct methods by companies to collect data that help the companies learn about the customers, thus improving and developing more customized services for the customers. This thesis contributes to understanding how the digital transition in the healthcare industry is changing the competition on the market and the importance of customers in this shift to develop competitive products.