HomeResearch & Knowledgeback to HomeStrategyback to Research & KnowledgeResMed, Inc.: The shift to connected medical devicesback to Strategy

Case Study

ResMed, Inc.: The shift to connected medical devices

By Goutam Challagalla, Bernard J. Jaworski and David Gray

20 pages

February 2019

Order this case study

Reference: IMD-7-1858

The case examines the decisions and actions taken by ResMed’s company leadership over a five-year period to transform the maker of medical devices for sleep apnea from a product-focused business into a “health informatics” company. While the company had a long and successful history of growth and innovation, company leaders anticipated radical change in the market, including competitive threats from lower-cost rivals as well as a shifting landscape for healthcare reimbursement in the United States, ResMed’s largest market. Beginning with the acquisition of a specialized healthcare data analytics company in 2012, ResMed invested heavily in new device platforms and software that enabled it to gather and analyze a vast quantity of patient data. The information gathered through the company’s CPAP devices could be used to improve patient care and enhance profitability for ResMed’s Home Medical Equipment (HME) customers. The strategy, however, required a wholesale transformation of all aspects of the company’s operations and marketing processes to deliver and communicate the value of its new offerings. ResMed’s leaders also faced the challenge of explaining and justifying to investors how the new “connected care” strategy produced value for the company. The case explores a number of key decisions related to technology choices, pricing strategy, and the integration of software capabilities into a company that had traditionally focused on product engineering. The case also looks at ResMed’s decision to “double down” on its digital transformation with the acquisition in 2016 of Brightree, a provider of cloud-based clinical, billing and business management solutions for healthcare customers.

Learning Objective

Examine the technical, managerial, and cultural challenges involved in a digital transformation of a successful engineering company.
Understand leadership decision-making processes related to technology choice and pricing strategy.
Examine a corporate process for performing a market assessment, exploring strategic options, and making the ‘case for change’ to internal and external stakeholders.

Keywords

Strategy, Connected Device, Internet of Things, Medical Device, Customer Journey, Value Proposition, Market Expansion, Innovation, Healthcare, Informatics, Sleep Apnea, Home Medical Equipment, Continuous Positive Airway Pressure, Healthcare Costs, Cloud Computing, Analytics

Settings

Northern America, United States of America
ResMed, Healthcare
2016-2018

Type

Field Research

Available Languages

English

IMD case studies are distributed through case clearing houses. In order to browse the collection and purchase copies please visit the links below.

The Case Centre

Cranfield University

Wharley End Beds MK43 0JR, UK
Tel +44 (0)1234 750903
Email [email protected]

Harvard Business School Publishing

60 Harvard Way, Boston MA 02163, USA
Tel (800) 545-7685 Tel (617)-783-7600
Fax (617) 783-7666
Email [email protected]

Asia Pacific Case Center

NUCB Business School

1-3-1 Nishiki Naka
Nagoya Aichi, Japan 460-0003
Tel +81 52 20 38 111
Email [email protected]

IMD retains all proprietary interests in its case studies and notes. Without prior written permission, IMD cases and notes may not be reproduced, used, translated, included in books or other publications, distributed in any form or by any means, stored in a database or in other retrieval systems. For additional copyright information related to case studies, please contact Case Services.

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Keep reading

Article

Only connect: How to keep disparate workforce elements happy and motivated - IbyIMD

Today’s workforce often includes a mix of permanent employees, freelancers, and outside contractors – but even organizations with mostly external workforces or highly autonomous workforces need proximity to succeed over the long term. Here are fou...

Strategy Team

By Sebastian Reiche

in I by IMD

Case Study

Has Nike lost its stride?

Marketing Digital Strategy

By Ivy Buche and Goutam Challagalla

Video

The end of corporate passivity

Corporate leaders must stop being passive spectators and actively shape geopolitical outcomes to drive global competitiveness and collaboration.

Competitiveness Corporate Governance Decision Making Leadership Politics Strategy

By Arturo Bris

in I by IMD

Case Study

UrbanLuxe: Supply chain and M&A

Supply Chain Mergers and Acquisitions Operations Strategy

By Ralf W. Seifert and Richard Markoff

Article

Breaking up to move forward: Why CFOs are at the heart of the de-conglomeration trend - IbyIMD

In an age that prizes agility, breaking up is a strategy rather than a surrender, argues IMD’s Salvatore Cantale, as CFOs step forward as architects of value in the de-conglomeration era.

Agility Corporate Governance Finance Leadership Strategy Sustainability

By Salvatore Cantale

in I by IMD

Article

Transitioning from CFO to CEO: top tips from the inside track - IbyIMD

What does it take to move from CFO to CEO? Four top executives share candid lessons on leadership, risk, growth, and redefining the finance role.

Growth Leadership Organizational Transformation Strategy Team

By Jean-François Manzoni

in I by IMD

Article

Steady profit: Learning the lessons of future-ready companies

In an increasingly uncertain world, how do companies plan for the long term? Take this short quiz to test your knowledge of future readiness, and read on for insights from future-ready companies.

Strategy Future Readiness

By Howard H. Yu

in I by IMD Brain Circuits

21 May 2025

Case Study

Candles Killer: Lighting up the world at the bottom of the pyramid

Shenzhen Power-Solution (SPS), founded in 2009 in China as an entrepreneurial venture, disrupted traditional lighting markets in African villages with its flagship product, Candles Killer. This solar lamp, priced under $5, replaces hazardous keros...

Sustainability Customer Centricity Innovation Strategy

By Winter Nie and Yunfei Feng

Only connect: How to keep disparate workforce elements happy and motivated - IbyIMD

By Sebastian Reiche
in I by IMD

Summary

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Strategy

Team

Browse all topics

Has Nike lost its stride?

By Ivy Buche and Goutam Challagalla
Case reference: IMD-7-2598 ©2025

Summary

Set in 2024, the case describes the trajectory of Nike's success and how it had recently lost its way. The company was experiencing its worst slump in more than 10 years. Since 2020, CEO Donahoe oversaw a significant shift away from wholesale, with a focus on direct channels and a suite of apps. However, direct-to-consumer (DTC) sales failed to make up for the losses from previous wholesale partners. At the same time, competition from a new breed of smaller players increased. Critics claimed that the sportswear giant's product innovations had lagged, allowing nimble competitors to chisel away at its market share. Sales were flat or down in all geographies. In response, Donahoe announced a three-year, $2 billion cost cutting plan that involved laying off 2% of workers, which in turn created a sense of crisis at Nike. Investors also suffered as the stock performed worse than the broader market in the last three years. To make matters worse, a class action suit was filed against Donahoe and CFO Matthew Friend for misleading the market about the company's underperformance. How could Nike's top management team execute a strategic turnaround by building upon the company's core strengths of brand equity, product innovation and sports marketing? They had to reevaluate past strategies, rethink their assumptions and chart a comeback to restore the company to its former growth trajectory and market dominance.

Reference IMD-7-2598

Organization Nike

Industry Consumer Goods, Footwear

Available Languages English

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Marketing

Digital

Strategy

Browse all topics

The end of corporate passivity

By Arturo Bris
in I by IMD

Summary

Corporate leaders must stop being passive spectators and actively shape geopolitical outcomes to drive global competitiveness and collaboration.

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Competitiveness

Corporate Governance

Decision Making

Leadership

Politics

Strategy

Browse all topics

UrbanLuxe: Supply chain and M&A

By Ralf W. Seifert and Richard Markoff
Case reference: IMD-2654 ©2024

Summary

This brief case exercise presents an increasingly common business scenario: An established player acquires a small, agile start-up to re-energize its value proposition. In this case, established global beauty giant UrbanLuxe acquires beauty start-up KYX. UrbanLuxe represents an old-school company selling a classic portfolio mainly via traditional distribution channels of luxury and travel retail, whereas KYX is exclusively an e-commerce brand. UrbanLuxe has a stable – perhaps stale – product line while KYX is in constant experimental churn, with an influencer-based media strategy that brings inherent demand volatility. The supply chain director is tasked with identifying the supply chain risks and opportunities associated with the acquisition. The two companies are different from both an operations perspective and a marketing perspective. UrbanLuxe has five factories servicing a global demand. KYX relies on one co-manufacturer focused on the US market. UrbanLuxe distributes to classic retailers from its own warehouses, KYX uses a third-party logistics provider for its exclusively e-commerce business. Further complicating matters, UrbanLuxe’s CEO has ambitious growth plans to make KYX a global brand. The supply chain director must not only consider integrating the acquisition but also supporting the growth strategy, for which they are asked to find cost savings to provide funding. The case provides a vehicle for students to consider the supply chain challenges a company might face in successfully integrating a starkly different acquisition. This case anchored in the real world will elicit universal challenges in companies today.

Reference IMD-2654

Available Languages English

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Supply Chain

Mergers and Acquisitions

Operations

Strategy

Browse all topics

Breaking up to move forward: Why CFOs are at the heart of the de-conglomeration trend - IbyIMD

By Salvatore Cantale
in I by IMD

Summary

In an age that prizes agility, breaking up is a strategy rather than a surrender, argues IMD’s Salvatore Cantale, as CFOs step forward as architects of value in the de-conglomeration era.

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Agility

Corporate Governance

Finance

Leadership

Strategy

Sustainability

Browse all topics

Transitioning from CFO to CEO: top tips from the inside track - IbyIMD

By Jean-François Manzoni
in I by IMD