SÖDERTÖRNS HÖGSKOLA
Management in Medical Engineering
Business Administration & Medical Engineering
Masters Thesis, 20 points
Spring semester 2002
2002-05-27
...Of The Three Giants In The Swedish Market Of Radiology Diagnostics
Supervisor:
Dick Ramström, Lars-Gösta Hellström
Authors:
Anjali Kaur
anjali_kaur@hotmail.com
Lilian Rivera
lilianrivera@hotmail.com
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
Abstract
The CT-market is alike many other areas of medical solutions very special in its’ nature. The
biggest operators in this market today (Swedish and global) if not the only suppliers of CT
are, GE medical systems, Siemens Medical solutions and Philips Medical systems. The
market of medical solutions is subjected to an immense competition, as the companies
provide their customers with identical products. Since a greater part of the products is of
similar nature, the suppliers have to provide their customers with something in addition to
their product, in order to win the customers and withstand the competition. But what is that
incentive?
The answer lies in services provided by the suppliers and customer-supplier relations. This is
the platform where the suppliers actually compete. In Sweden, the hospitals included in The
Swedish County Councils, have to follow the regulation of The Public Procurement Act,
which means that procurements have to be made objectively without any involvement of
satisfying customer-supplier relationships.
This thesis investigates how the customers perceive the current CT-suppliers and how these
perceive themselves and their competitors. This way, the supplier(s) having a realistic image
of themselves and the market can be discovered. To fulfil this aim, the authors have used the
KISSP-interview method, that is a blend of a qualitative and quantitative interview method.
To make this study more representative, an electronic survey investigation has been
performed using a computerised version of The KISSP-method, which is the eTRM.
The results of this study reveal whether or not the customers are satisfied with their suppliers
and also how the suppliers think the customers perceive them. Some other interesting results
have been revealed, such as how the procurements are performed in reality, where examples
are given of advantages and disadvantages of this system. Recommendations for possible
solutions of the occurring problems are discussed.
This study is of interest not only for the suppliers and the customers but also for The Swedish
County Council and new operators that want to enter the CT-market.
2
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
Acknowledgements
We would like to credit many people for their contributions to this study. To begin with, we
would like to thank our supervisors, Professor Dick Ramström and Lars-Gösta Hellstörm for
their valuable comments, discussions, and constant feedback on the earlier drafts of this
thesis. At each stage we received exceptionally fine guidance from our supervisors. Their
faith in our study, motivated us to work harder.
We would especially like to express their gratitude to Professor Sten Söderman who
graciously recommended using the KISSP-method and for his valuable comments and
discussions as the study progressed.
We wish to express our sincere thanks for the extraordinary effort Quicksearch made. They
graciously helped us with the performance and compilation of the survey investigation
(eTRM). This study would not have been accomplished without their contribution.
The respondents of this study deserve a special mention, as completion of the thesis would
have been impossible without their contributions. We would like to thank all the doctors,
medical engineers, purchasers and the representatives from the case companies for taking out
time for personal interviews and also for taking part in the survey investigation, despite a tight
schedule. The data collected from these personal interviews and the survey has been the
essence of this study.
Last but not the least, many thanks are due to the persons who took their time to scan through
the earlier drafts to provide opinions on betterment of this thesis.
Writing this thesis has been painstaking, challenging and enjoyable process. It has been a
pleasant journey and a great learning experience for both of us. Also, our families deserve an
enormous amount of credit. With our work overload, and little sleep, we greatly appreciate
their patience and support, without which we may not have had the energy to complete this
thesis.
Stockholm May 31st, 2002
Anjali Kaur
Lilian Rivera
3
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
Table of contents
1
INTRODUCTION ................................................................................................ 8
1.1
1.1.1
1.1.2
1.1.3
1.1.4
1.1.5
1.2
1.2.1
1.3
1.4
1.5
1.6
1.6.1
BACKGROUND ........................................................................................................ 8
THE CONCEPT OF CUSTOMER SATISFACTION IN MEDICAL COMPANIES ..................... 9
THE MARKET OF MEDICAL SOLUTIONS ................................................................... 10
CASE COMPANIES .................................................................................................. 10
THE AUTHORS’ INTEREST IN THE STUDY ................................................................ 11
PRE-UNDERSTANDING ........................................................................................... 11
THE PROBLEM AREA ............................................................................................ 13
STATEMENT OF THE PROBLEM............................................................................... 14
PURPOSE OF THE THESIS ...................................................................................... 14
DELIMITATION ..................................................................................................... 15
OUTLINE OF THE THESIS ...................................................................................... 16
DEFINITIONS ........................................................................................................ 17
SATISFACTION AND ASSOCIATED CONCEPTS AND DEFINITIONS OF THIS STUDY...... 17
2
SCIENTIFIC VIEW .......................................................................................... 19
2.1
2.1.1
2.1.2
2.1.3
PARADIGM ............................................................................................................ 19
POSITIVISTIC VIEW ................................................................................................ 20
HERMENEUTIC VIEW.............................................................................................. 20
THE AUTHORS’ SCIENTIFIC VIEW ........................................................................... 21
3
RESEARCH METHOD .................................................................................... 23
3.1
3.1.1
3.2
3.2.1
3.3
3.3.1
3.4
3.4.1
3.4.2
3.4.3
3.4.4
3.5
3.5.1
3.5.2
3.5.3
3.5.4
3.6
3.6.1
3.6.2
CASE STUDIES ...................................................................................................... 23
THE CHOICE OF CASE COMPANIES .......................................................................... 23
INDUCTION VERSUS DEDUCTION .......................................................................... 23
THE AUTHORS’ CHOICE OF ANALYSIS APPROACH................................................... 24
QUALITATIVE VERSUS QUANTITATIVE METHOD................................................. 24
THE AUTHORS’ CHOICE OF RESEARCH METHOD ..................................................... 24
DATA COLLECTION .............................................................................................. 25
PERSONAL INTERVIEWS ......................................................................................... 26
THE KISSP INTERVIEW METHOD ........................................................................... 27
THE SURVEY .......................................................................................................... 29
SELECTION OF RESPONDENTS ................................................................................ 29
VALIDATION OF THE THESIS ................................................................................ 30
RELIABILITY .......................................................................................................... 30
VALIDITY .............................................................................................................. 31
TRIANGULATION ................................................................................................... 31
ENABLING HIGH VALIDITY AND HIGH RELIABILITY IN THE PRESENT STUDY ........... 32
SUMMARISATION OF THE PROCEDURE ................................................................ 33
PROCEDURE I ........................................................................................................ 33
PROCEDURE II ....................................................................................................... 34
4
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
4
PROCEDURES AND NORMS FOR DECISION MAKING ........................ 35
4.1
4.1.1
4.1.2
4.1.3
THE PUBLIC PROCUREMENT ACT ....................................................................... 35
THE PUBLIC PROCUREMENT ACT (PPA) – A BRIEF OVERVIEW .............................. 35
THE FORMAL STEPS IN A PROCEDURE .................................................................... 36
PROCUREMENT WITHIN MEDICAL HEALTH CARE.................................................... 37
5
THE THEORETICAL FRAME OF REFERENCE ....................................... 40
5.1
5.1.1
5.2
5.2.1
5.2.2
5.2.3
5.2.4
5.3
5.4
CHOICE OF THEORIES/MODELS ........................................................................... 40
CRITIC TOWARDS THE CHOSEN THEORIES AND MODELS......................................... 41
CUSTOMER SATISFACTION .................................................................................. 41
FROM VALUE TO SATISFACTION............................................................................. 41
FROM SATISFACTION TO RELATIONSHIP STRENGTH ............................................... 41
FROM RELATIONSHIP STRENGTH TO RELATIONSHIP LENGTH .................................. 42
FROM RELATIONSHIP LENGTH TO RELATIONSHIP PROFITABILITY ........................... 42
THE GAP ANALYSIS MODEL ................................................................................. 42
SUMMARISATION OF THE THEORIES/MODELS..................................................... 45
6
EMPIRICAL FINDINGS .................................................................................. 46
6.1
6.2
6.3
6.3.1
6.3.2
6.3.3
6.3.4
6.3.5
6.4
6.5
COMPUTED TOMOGRAPHY .................................................................................. 46
THE CASE COMPANIES ......................................................................................... 47
THE PERSONAL INTERVIEWS ............................................................................... 49
RESPONDENTS CATEGORY 1 – THE X-RAY DOCTORS ............................................. 50
RESPONDENTS CATEGORY 2– THE MEDICAL ENGINEERS ....................................... 54
RESPONDENTS CATEGORY 3 – THE PURCHASERS ................................................... 56
RESPONDENTS CATEGORY 4 – THE SALESPEOPLE .................................................. 60
A BRIEF SUMMARY OF THE PERSONAL INTERVIEWS ............................................... 64
THE SURVEY RESULTS.......................................................................................... 65
SUMMARISATION – PERSONAL INTERVIEWS + THE SURVEY INVESTIGATION .... 66
7
ANALYSIS .......................................................................................................... 68
7.1
7.1.1
7.1.2
7.1.3
7.1.4
7.1.5
7.2
THE GAP ANALYSIS APPROACH............................................................................ 68
WORD OF MOUTH .................................................................................................. 68
PAST EXPERIENCE.................................................................................................. 69
GAP 1 .................................................................................................................... 73
GAP 2 .................................................................................................................... 75
GAP 3 .................................................................................................................... 79
CUSTOMER SATISFACTION THEORY V/S THE PUBLIC PROCUREMENT ACT ...... 82
8
CONCLUSIONS AND DISCUSSION ............................................................. 85
8.1
8.2
8.3
CONCLUSIONS I .................................................................................................... 85
CONCLUSIONS II .................................................................................................. 88
CONCLUSIONS III................................................................................................. 89
5
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
8.4
REFLECTIONS AND CONCLUDING COMMENTS... ................................................. 91
9
CRITICAL REVIEW ........................................................................................ 92
9.1
9.2
9.3
9.4
CRITIC TOWARDS THE CHOSEN METHOD ............................................................ 92
CRITIC TOWARD THE CHOSEN THEORIES/MODELS ............................................. 93
CRITIC TOWARDS THE ANALYSIS AND THE CONCLUSIONS ................................. 93
RECOMMENDATIONS FOR FURTHER RESEARCH ................................................. 94
TABLE OF REFERENCES .................................................................................................. 95
APPENDIX 1 – THE QUESTIONNAIRE FOR THE SURVEY ......................................................... 100
APPENDIX 2 – THE LETTER SENT TO THE SURVEY RESPONDENTS ........................................ 102
APPENDIX 3 - THE DRIVING FACTORS BEHIND THE PURCHASE ............................................ 103
APPENDIX 4 – STANDARDISATION OF THE TEN MOST FREQUENT FACTORS ......................... 104
APPENDIX 5 – THE NOT SO FREQUENTLY MENTIONED FACTORS ......................................... 106
APPENDIX 6 – QUESTIONS ADDED TO THE KISSP-INTERVIEW METHOD FOR PERSONAL
INTERVIEWS ........................................................................................................................... 108
APPENDIX 7 - THE SURVEY RESULTS .................................................................................... 109
APPENDIX 8 – RADIOLOGY DIAGNOSTICS ............................................................................ 127
APPENDIX 9 – THE ORIGINAL GAP ANALYSIS APPROACH ..................................................... 132
APPENDIX 10 – THE STATISTICAL RESULTS OF PERSONAL INTERVIEWS ............................. 136
APPENDIX 11 – A LIST OF THE SURVEY RESPONDENTS ......................................................... 137
Table of figures
Figure 3-1: The Matrix (Source: Estay et. al, 2001)............................................................................................ 28
Figure 3-2: The procedure I (Proudly copied from Radisson thesis) .................................................................. 33
Figure 3-3: The procedure II (Source: Own)........................................................................................................ 34
Figure 5-1: The gap analysis approach ................................................................................................................ 43
Figure 6-1: The relative importance of price versus quality valued by the respondents. ..................................... 66
Figure 7-1: Personal needs of the customers – relative factor differences in the three customer categories....... 71
Figure 7-2: The personal needs of the customers’ v/s suppliers’ perception of these. ......................................... 73
Figure 7-3: Example 1 – the respondents’ valuation of the suppliers – GE being a winner. ............................... 76
Figure 7-4: Example 2 – the respondents’ valuation of the suppliers – Philips being a winner. ......................... 76
Figure 7-5: Example 3 – the respondents’ valuation of the suppliers – Siemens being a winner......................... 76
Figure: 7-6 – The customers’ valuation of the suppliers v/s the suppliers’ perceptions of themselves. ............... 77
Figure 7-7: Customer satisfaction theory versus The Public Procurement Act .................................................... 82
Figure 7-10: The purchase procedure and the links. ............................................................................................ 84
Tables
Table 1: Summarisation of the theories/models .................................................................................................... 45
Table 2: The driving factors mentioned by the customers and the suppliers. ....................................................... 49
Table 3: The driving factors in order of frequency. .............................................................................................. 50
Table 4: A brief summary of the personal interviews ........................................................................................... 65
Table 5: The driving factors in order of importance............................................................................................. 66
Table 6: Summarisation of the statistical results; personal interviews + survey investigation. ........................... 67
Table 7: The performance rating and best experience of each supplier ............................................................... 79
Table 8: Expected service v/s received service ..................................................................................................... 80
6
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
1 INTRODUCTION
The purpose of this section is to convey the background and the problem of the thesis in
its theoretical and practical context. This includes a description of how the problem
area evolved and a discussion of why it is of interest to carry out the present study. The
concluding part of the introduction defines the purpose of the thesis, the delimitation
and an outline of the thesis.
1.1 Background
“You may have the best dog food in the world, but if the dogs don’t eat it...”
- A Motorola saying
The statement above could principally be implied in any sector. It is not a question of
what you have, it is a question of what the customers want. Customer satisfaction is a
much-discussed (hot) topic today. A Company has to keep in mind the common
objective of satisfying the customer. The importance of quality and customer
satisfaction has dramatically accelerated over the past twenty years (Johnson, 1997:3,
Huber et al., 2000:92-99, Vol. 27). Businesses today are well aware that they must
satisfy customers and offer quality services in order to be competitively viable
(Dabholkar, 1995:101-108, Vol.22). However, many vindicate that it is no longer
sufficient to offer quality as a decisive factor in your products as so many other factors
play a vital role (Johansson, 2001-02-24). Today, almost all companies have the
possibility to develop similar products and services, which give the suppliers new
market conditions and competitive situations. The increase in the number of suppliers
makes it imperative for the companies to distinguish themselves in ways, other than just
producing products or services. The focus is no longer solely on the product, the quality,
or the service, but on the urge of creating value for the customers, and meeting their
needs in order to satisfy them.
Several different concepts such as, perceived performance, expected performance,
value, loyalty, customer retention, profitability etc. are often related to customer
satisfaction. (2000) points out in the service profit chain, the connections among
customer value, satisfaction, loyalty and profitability. Customer satisfaction is said to be
a primary driver of customer loyalty and subsequent retention, especially in a
competitive industry (Johnson et al., 1998:15-20, Vol.25). Various theories can be
found about the relationship between customer satisfaction and customer loyalty.
Hirschman (1970) states that customer loyalty is a result of customer satisfaction and
that these two are highly correlated. While some other researches state that customer
satisfaction does not always result in customer loyalty. The authors tend to agree with
the latter statement, as we believe that customer satisfaction is about the past and
customer loyalty is about the future. Customer loyalty also depends very much upon the
relationship between the customer and the supplier. The concept of customer loyalty
does not imply on the purchase of medical equipment. These purchases are made under
the regulations of “The Public Procurement Act” (PPA - see chapter 4.1), which does
not allow favouring one supplier due to conformity to law. It is an interesting task to
investigate what the reality looks like when the scientific theories are based on
something that the regulations prohibit.
7
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
If a customer has other suppliers than the current one, providing him with for instance
equal value for less money, it is but natural if the customer switches off to a competitor.
A satisfied customer is not always loyal (Fitzsimmons, 1998). Customer is, in the long
run, satisfied not with individual attribute performance, but with the value relationship
they establish with a supplier (Ibid).
1.1.1 The concept of customer satisfaction in medical companies
The medical products and equipment are necessary conditions for medical health care
and consist of various types of technical solutions such as diagnostics, treatment, and
surveillance. In that sense, the medical solutions’ companies and the hospitals are
interdependent as they both share a customer-supplier relationship. The medical
products and equipment, nowadays called “Medical solutions”, are available as a
support and essential tools in the medical health care chain. The concept of medical
solutions contains a broad range of medical products, technological equipment, service
etc provided to the customer. The market of medical solutions is subjected to an
immense competition, as the companies provide their customers with identical products.
Since a greater part of the products is of similar nature, the suppliers have to provide
their customers with something in addition to their product, in order to win the
customers and withstand the competition. One needs to create a bond strong enough to
withstand the efforts of competitors who will try to woo the customer away.
Tomorrow’s customers will be smarter and more demanding. The best companies must
be ahead of the marketplace in their own market leadership. It is therefore of great
importance to create greater value to customers than the competitors, on a competitive
platform such as medical health care, where no product is greatly different from the
other.
The effect of customer satisfaction is somewhat complex in the market of medical
solutions. A number of factors are impelling the medical companies to embrace a value
orientation. Perhaps the most compelling factor is the significant change in customer
behaviour that is shaping corporate responses. A relentlessly changing technological
environment offering high quality and lower cost option, which can be translated into
lower customer prices, further catalyses this value orientation. But perhaps the most
formidable force is a hyper competitive environment. (Johansson, 2001-01-24)
The market of medical solutions is similar to any other market of high-involvement
products where interaction between the customer and the supplier is highly important to
ensure that the customers get what they want. Suppliers, seek to be trusted while
customers, seek to be heard and validated. There is no substitute for high quality and
good value, the higher the value provided to the customer, the higher are the chances of
customers being satisfied (McQuitty, et.al., 2000). Mostly, companies, that share good
relations with their customers, believe that the customers are apparently satisfied. But
are their customers completely satisfied? Sometimes, diminished satisfaction with one
product can be a good reason to try an alternative, and it might be difficult to discern
whether variety seeking or a desire to increase satisfaction is the goal (Ibid).
8
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
The fact that the customers (hospitals) run by “The Swedish Federation of County
Councils”1 (Landstinget) have to follow The PPA, makes the market of medical
solutions even more competitive. It means that the hospitals may not favour a supplier
merely because they share good customer-relations with the company. The hospitals
have to be objective as per law. Whether or not it is practised is a different story
altogether.
The purchase of medical equipment is a lengthy process and people such as medical
engineers; technicians, doctors, purchasers and nurses are involved in the decisionmaking. It is therefore of great importance for the medical companies to focus on the
satisfaction for a group of members and not only for a person.
1.1.2 The market of medical solutions
The medical health care industry is large and complex. It includes organizations from
hospitals to instrument manufacturers. There are many well-established names as well
as new companies in this industry. They all play key roles in a number of different areas
with various medical devices and solutions. The market of medical solutions is one of
the most critical and demanding ones. Whether it is blood or tissues requiring
preservation or a MRI (Magnetic Resonance Imaging) machine diagnosing a patient, the
stakes are just too high to tolerate anything less than total reliability.
Sweden is regarded as one of the most advanced medical equipment markets in the
world. The factors reshaping the future health care system in Sweden are the increase in
an aging population, efforts to contain cost and the influence of new technologies. One
of the many advanced Swedish markets is the market of Radiology diagnostics. A
number of names arise in mind as the market leaders of Radiology diagnostics.
However, three obvious names that should be mentioned as the leaders in the Swedish
market of Radiology diagnostics are, Siemens Medical Solutions, Philips Medical
Systems, and General Electric (GE) Medical Systems. Radiology diagnostics is only
one of the several vital areas in which these companies operate. Siemens Medical
Solutions represents 40 percent of the Swedish market of Radiology diagnostics while
Philips Medical Systems has 35 percent and GE Medical Systems stands the
competition with 25 percent of the market shares. (Johansson, 2001-01-24)
1.1.3 Case companies
As aforesaid, the three biggest operators in the Swedish market of Radiology
diagnostics are Siemens Medical Solutions, Philips Medical Systems and GE Medical
Systems. Our case study focuses on these three companies and their customers in
1
The Swedish Federation of County Councils represents the governmental, professional and employerrelated interests of its members – the 18 county councils, the regions of Västra Götaland and Skåne and
the Municipality of Gotland. The county councils are responsible for matters of common interest which
are too extensive and too costly for individual municipalities to manage. This mainly concerns health
care, which is the county councils’ major task, but also dental care, public transport, culture, higher and
upper-secondary education, tourism, the environment, support for business and industry and regional
growth and development. (www.lf.se)
9
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
Sweden. These companies are of interest as they are called the three “giants” in the
market of Radiology diagnostics. It is both an interesting and challenging task to
analyse the customer experiences with each of these companies.
These companies operate in diverse markets – providence of medical solutions is only
one of their numerous operations. These companies have been customer-oriented for
years and own high market shares in the European market of medical health care and on
the global platform (Johansson, 2002-01-24). To the best of the companies’ knowledge,
it is a result of a good product line combined with well-built and long-lasting relations
with their customers (Ibid).
1.1.4 The authors’ interest in the study
The authors’ prime interest in this study aroused in connection with the educational
program, “Management in Medical Engineering”. It is a program that combines studies
from three different academic fields - Business Administration, Engineering and
Medicine. During a period of four years of studies, contacts have been made with
various medical companies. As a concluding part of this education, the authors’ wish to
bring in practice all the experiences gained during the past four years. As to the best of
the authors’ knowledge, numerous studies have been performed in the area of customer
satisfaction, but very few have been implied, in the medical field. Customer satisfaction
surveys and other studies have been performed within the companies as consultancy
work. There are also studies that examine customer satisfaction in one medical
company, but none that compares the customer satisfaction on an expensive platform, in
a group of medical companies – this strengthened the authors’ interest in performing
this study. One of the most interesting aspects of this study is that the authors’ are doing
this work independently and not in the favour of the companies or in the favour of the
customers, which gives the authors an opportunity to be objective and critical about
both the perspectives.
1.1.5 Pre-understanding
Pre-understanding is a concept that is formed through experience, and stands for what
we have learnt. Each individual has a different set of pre-understanding. While
performing a study, the researcher’s pre-understanding has an influence on the final
outcome. In most situations, education and experiences form a starting-point for the
study (Holme & Solvang, 1991). According to Gilje & Grimen (1992), preunderstanding consists of three basic components: language and conceptions, beliefs,
and personal experiences. The authors’ pre-understanding primarily consists of
experience of meeting experts in the field of medical engineering during the educational
period. When it comes to language and perceptions, the authors have knowledge about
the constantly used terms in this study. To avoid any sort of misperceptions of the terms
and their definitions, the respondents were asked about them. In the authors’ opinion,
the beliefs about the surroundings depend a great deal upon the area of academic
studies. It is believed that academic studies influence individual beliefs and perceptions
as the authors always try to connect observations to the theories.
10
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
To get a concrete pre-understanding a pre-study was performed within the area of the
research. The authors have been in contact with various numbers of medical companies
and hospitals through the educational programme. This has been an advantage while
performing this pre-study since the authors could make use of those contacts made
during four years of studies.
The main purpose of this pre-study was to identify the factors behind a purchase
decision of the CT-apparatus. Also, to obtain a deeper understanding about the purchase
procedure of the medical equipment, its’ vital steps, and finally to get a comprehensive
view of the market for Radiology diagnostics. Personal interviews were performed with
the experts in the area of Radiology diagnostics, with the salespeople from the case
companies, and also with the customers who could provide this study with the required
information. A basic comprehension was obtained about the interaction between
companies and its customers. Through these personal interviews, telephone interviews,
and literature studies, a view of how and who normally makes the purchase decisions
within hospitals, was obtained. It was in the authors’ interest to learn whether or not the
purchase decisions differ between private and public hospitals, since these are a part of
the “The Swedish Federation of County Councils”. There was a multitude of
theories/models that discussed customer satisfaction. As the market of radiology
diagnostics is complex in its’ nature, general customer satisfaction theories would not
do justice to the study. After consideration of alternatives the most appropriate in the
authors’ opinion were chosen.
The authors also learnt more about the suppliers competing in the market of Radiology
diagnostics. There are no other major CT-suppliers on the global platform and these
three companies have managed to take control over Swedish market as well as the CTmarket worldwide. The market of medical health care is marginal for suppliers who
want to make big money (Johansson, 2001-01-24). The authors believe that could be the
reason behind the few suppliers in the CT-market and can be addressed as an
oligopolistic2 market.
The data collected through this pre-study is presented in chapter 5 along with other
empirical facts.
2
In an oligopolistic market, the product may or may not be differentiated. What matters is that only a few
companies account for most or all of the total production. In some oligopolistic markets, some or all of
the companies earn substantial profits over the long run because barriers of entry make it difficult or
impossible for new firma to enter the market. (Pindyck, 1992)
11
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
1.2 The problem area
The CT-market is alike many other areas of medical solutions very special in its’ nature.
The biggest operators in this market (Swedish and global) if not the only suppliers of
CT are, GE medical systems, Siemens Medical solutions and Philips Medical systems.
The market of medical solutions is subjected to an immense competition, as the
companies provide their customers with identical products. Since a greater part of the
products is of similar nature, the suppliers have to provide their customers with
something in addition to their product, in order to win the customers and withstand the
competition.
It is likely that the more competitive the market, the more important is the level of
customer satisfaction. But what is customer satisfaction all about in the market of
medical solutions with regard to the CT-market? If the products/equipment are similar
in their nature, what differs these suppliers from each other? What makes the customers
prefer one supplier to the others? If a company’s proposition and its total value exceed
the competitors’ options, there is no reason for the customers to change their supplier.
But it is a well-known fact that whenever customers have choices and feel free to make
a choice, they act merely like customers in markets with intense competition and switch
off to a competitor when an offer that seems better is provided (Jones and Sasser, 1995;
Fitzsimmons, 1998). They will only remain loyal if they are completely satisfied.
Satisfaction is greatly related to the kind of relation you share with your supplier and to
what extent you can trust them, especially when the product/equipment being purchased
is worth millions and patient safety is at risk. Something that differs the procurements
within medical health care from other procurements is the regulation of The Public
Procurement Act. The customers have to be objective in their decision-making and not
have personal preferences regarding a particular supplier. The question is: Do the
customers fulfil procurements as per regulations or do they give more importance to
customer-supplier relations? What does that the reality look like?
The case companies are excellent in several regards and it is difficult to determine who
is better than the other in all respects (Johansson, 2002-01-24). But with regard to the
Radiology diagnostics – with whom are the customers most satisfied? Who is the most
outstanding one and provides best of service in the customer’s opinion? Who provides
the user-friendliest products? Who provides good value for money? Do these companies
know what their customers ‘really’ want? Are they able to provide their customers with
the desired product/service in order to satisfy them? Are they able to ‘walk their talk’?
Is the provided product/service enough to result in customer satisfaction? These may
sound like obvious questions but results may vary and yet be equally interesting.
12
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
1.2.1 Statement of the Problem
The discussion of the problem area above emerged into a number of research problems.
The following main problem is the core of this thesis:
Main Research Problem
To what extent do the companies have a realistic view whether they truly satisfy their
customers?
In order to solve the main problem, the authors have identified two fundamental
research problems, which will provide information regarding important areas of the
main research problem. The first research problem is divided into two parts. It deals
with the issue of different factors behind a purchase decision, that ultimately lead to
customer satisfaction – out of customers’ and suppliers’ viewpoint. The reason why the
authors chose to investigate both the perspectives is to get a comprehensive view where
both parts can make their statements about the decisive factors of customer satisfaction.
Research Problem 1a
To the best of the customers’ knowledge – which are the factors behind a purchase
leading to customer satisfaction?
Research Problem 1b
To the best of the suppliers’ knowledge – which are the factors behind the purchase
decision of the customers leading to customer satisfaction?
Through the second research problem the authors aim to learn how the customers, in
comparison to their competitors, perceive the companies and their products. In this
study, the companies in question are regarded as competitors to one another.
Research Problem 2
How do the customers perceive the supplier (company) and its products, in comparison
to the competitors?
By analysing these two research problems, the authors aim to solve the main problem.
1.3 Purpose of the thesis
The scope of this thesis is to:
 Identify and analyse the factors behind the customers’ purchase decision of the CTapparatus. Identify and analyse similar factors followed by the three companies to
achieve customer satisfaction.
13
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics

Compare and conclude the extent to which each of the companies has succeeded in
this endeavour.
1.4 Delimitation
This study has been limited geographically to Sweden. This study is to focus on the
aforesaid three companies and their customers in Sweden. The delimitation is further
made by choice of a common product line at the three companies in question – The CTapparatus. Further, the authors also limit this study to the hospitals that are an integral
part of The Swedish Federation of County Councils.
14
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
1.5 Outline of the thesis
Chapter 1: The first chapter includes an introduction of our thesis and its aim. It
conveys the background and the problem of the thesis in its theoretical and
practical context. It also includes a description of how the problematic
area evolved and a discussion of why it is of interest to carry out the
present study. The concluding part of the introduction defines the purpose
of the thesis, the delimitation, a pre-understanding and an outline of the
thesis.
Chapter 2: As the scientific view to a high degree affects the outcome of any analysis,
the second chapter presents different philosophical approaches, followed
by the authors’ scientific view.
Chapter 3: This chapter provides a discussion of the research method used for this
thesis. Inductive versus deductive analysis is followed by qualitative and
quantitative methods. The last section of this chapter deals with the
reliability and the validity of the research method.
Chapter 4: This chapter provides the reader with the regulations and directives of the
medical health care procurement and gives the reader an overview of the
CT-procurement.
Chapter 5: This Chapter covers the theoretical framework that the thesis uses to
discuss the aspects of customer satisfaction. The reader is provided with
theories of customer satisfaction, theories used to define the relationship
between the supplier and the customer.
Chapter 6: This chapter presents the empirical facts about the companies and findings
from the personal interviews and the survey.
Chapter 7: In chapter 7, the authors cover the analysis and presents sub-conclusions
based on the theoretical frameworks and empirical findings of this study.
Chapter 8: Chapter 8 provides the reader with the conclusions and discussion of this
study.
Chapter 9: Chapter 9 presents the critical review of the study, allowing the reader to
assess the quality of the thesis, which is followed by recommendations for
future studies.
15
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
1.6 Definitions
1.6.1 Satisfaction and associated concepts and definitions of this study
Despite many attempts to measure and explain consumer satisfaction, there still does
not appear to be a consensus regarding its definition (Giese and Cote, 2000). The term
“Customer satisfaction” can be defined in many ways, one of which is “a person’s
feelings of pleasure or disappointment from comparing a product’s perceived
performance (or outcome) in relation to his/her expectations” (Kotler, 2000:36).
Satisfaction is generally considered to be an emotional reaction by the customer in
response to an experience with a product or service. This definition covers the
satisfaction following the most recent contact with the product or service, the general
satisfaction experienced by regular users of the product or service, or – in case of
durable goods, the satisfaction experienced since the time of purchase. When
approached by direct questioning, satisfaction is usually measured on a scale ranging
from “Very satisfied” to “Not at all satisfied” (e.g., Oliver & Desarbo, 1988;
MacQuitty, Finn and Wiley, 2000).
Perceived performance is the subjective evaluation of real performance. It corresponds
with user’s opinion concerning the product’s degree of excellence or superiority in
respect to the competitors. It is usually measured by direct questioning on a scale from
“Good” or “Among the best” to “Bad” or “Among the worst”. (Finn and Wiley, 2000)
Expected performance refers to the expectations concerning performance, but
expectations in the sense of predictions from the product or service in question. It is
measured with the same type of questions and scales as the perceived performance (“To
what degree did you expect...?”) (Ibid.)
Value: This definition has several important implications. First, and perhaps most
importantly, value is customer defined. Put another way, value, like beauty, is in the
eyes of the customer. The strength of value as a competitive tool is directly related to the
clarity of understanding that the company has of what benefits the customers think are
important. (Source: Own)
Medical device: According to the European Medical Device Directive (93/42/EEC), a
medical device is; “…any instrument, apparatus, appliance, material or other article,
whether used alone or in combination, including the software necessary for it is proper
application intended by the manufacturer to be used for human beings for the purpose
of; - diagnosis, prevention, monitoring, treatment or alleviation of disease, - diagnosis,
monitoring, treatment, alleviation of or compensation for an injury or handicap, investigation, replacement or modification of the anatomy or of a physiological process,
- control of conception, and which does not achieve it's principle intended action in or
on the human body by pharmacological, immunological or metabolic means, but which
may be assisted in it's function by such means..." (http://www.sos.se/SOSE/NT, 200201-19)
Medical devices are classified in different categories. Classification is the process
whereby a medical device is placed into one of four categories, depending upon the
16
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
device's potential to cause harm to the patient, user or some other person. This is an
imperative step in any compliance strategy since the classification determines the
Conformance Route. The lowest risk devices fall into Class I, whilst devices, which
exchange energy with the patient in a therapeutic manner or are, used to diagnose or
monitor medical conditions, are in Class IIa. If this is done in manner, which could be
hazardous for the patient, then the device falls into Class IIb. Class IIb is also reserved
for implantable devices or where absorption takes place. If a device connects directly
with the Central Circulatory System (CCS) or the Central Nervous System (CNS) or
contains a medical product, then the device falls into Class III. The CT-apparatus is a
Class IIb product.
Medical solutions: This is a common statement for ‘medical products and equipment’.
The concept of medical solutions contains a broad range of medical products,
technological equipment, service etc provided to the customer. (Own definition;
confirmed by Hellström, 2002-01-30)
Procurement: It is a purchase, lease, or rent purchase of products and services.
(www.riksdagen.se, (SFS 1997:1068), 2002-04-09).
17
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
2 SCIENTIFIC VIEW
In this chapter the authors describe and discuss the scientific perspective. Under
scientific view, they give an account of their view of the science.
Every individual gains its frame of reference through social background, upbringing,
education, practical experience etc., and all these factors affect an individual’s preunderstanding. The choice of subject, the procedure of this thesis and the conclusions
that will eventually be made, will naturally be affected by this individual frame of
reference. The ways, in which these frames of references influence the result of the
thesis, is something the authors cannot analyse objectively. Therefore, the reader is
requested to keep in mind the influence the authors’ frame of references may have had
on this thesis. It is of great importance to clear and give an account of the researchers’
perspective of reality, human perspective, and the knowledge perspective, to provide the
reader with an understanding of the questions that are the base of this thesis.
2.1 Paradigm
We all have different ways to look at the reality. When we examine, explain, and seek
to understand the reality, our perception of reality has a determining significance, since
our assumptions about what reality is, guide us. In authors’ opinion, the reality is
subjectively constructed and consists of social systems, in which people interact. When
we state that the world is subjectively constructed, we aim to convey that actions,
norms, values etc, all have human extraction (Eriksson & Wiedersheim-Paul, 1999).
The perspective of reality has a firm connection with the researcher’s human
perspective. As researchers, it is important to give an account of the human perspective,
as in this inquiry; the researchers are ‘subjects’ interacting with other ‘subjects’. When a
subject meets a subject, more or less, they subconsciously tend to affect each other,
which results in a non-objective research (Starrin & Svensson, 1994). The authors’
perception is that no human is like the other. Therefore, in qualitative studies, it is of
great importance to consider people not as identical, but unique individuals.
The knowledge perspective is strongly related to a researcher’s perspective of reality
and the human perspective. As the researchers assume that, the world is socially
constructed, it is also assumed that knowledge is subjective. Every individual decides
what knowledge means to him/her. Of the above statement, that humans create
knowledge, i.e. every human being is actively involved in its’ creation of meaning
(Patton, 1990; Löfberg & Ohlsson, 1995).
This study is in accordance with, what Quinn & Patton (1990) call a systems
perspective. A systems study asks: “How and why does this system as a whole function
as it does?” Hermeneutic thinking is central to a systems perspective. A system is a
whole that is both greater than and different from its parts. Indeed, a system cannot
validly be divided into independent parts as discrete entities of inquiry, because the
effects of the behaviour of the parts on the whole, depend on what is happening to the
other parts (Patton, 1990:79).
18
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
This study examines people in a social system that can be described as “a system in
which people work together” (Lundahl & Skärvad, 1992) and the system in this inquiry
consists of the interaction between the investigated companies and their customers and
also the interaction between the customers. Philosophers of science and methodologists
have been engaged in a long-standing epistemological debate about how to best conduct
a research. This debate has been centred on the relative value of two fundamentally
different and competing inquiry paradigms: (1) logical-positivism, which uses
quantitative and experimental methods to test hypothetical-deductive generalizations,
versus (2) an inquiry using qualitative and inductive approach to understand human
experience in context-specific settings (Patton, 1990:37). A paradigm is a worldview, a
general perspective, and a way of breaking down the complexity of the real world.
2.1.1 Positivistic view
The traditional positivistic view is promoted by the likes of Popper and Kuhn.
Positivism was coined after Comte’s optimistic thinking when it comes to creating
theories within the social sciences based the same premises as those within the natural
sciences (Andersson, 1979:7-15). Positivism is based on what can be observed and
verified. One of its’ goals is to eradicate non-science or metaphysics. The logical
positivism makes a clear distinction between valuable- and non-value-added assertions.
According to the logical positivists, assertions within the first category are those, which
derive from logic, mathematics or through verifiable experiences, while the non-valueadded assertions are those made in theology, metaphysics or those that are of a
normative nature. The possibility to test the theories and the hypothesis became
therefore the strongest criterion used in the distinction between science and
metaphysics. However, the positivistic researcher is dependant on what can be observed
from a finite number of phenomenon, thus making laws and predictions less than
universal, however adequate for the time being. (Gilje & Grimen, 1992:57-59)
Positivism is a methodological approach to understanding – it is a phenomenon based
on scientific method, empiricism and objectivity. Its approaches are characterized by
essentialism as it seeks understanding of cause and effect. Positivist approaches tend to
ignore the subjective experience of the deviant and the meaning the behaviour has for
the actor. The question of objectivity is not addressed, but assumed. Positivism ignores
subjective experience, or the meaning to the participants. By only studying the objective
features of an act; meaning is ignored. Positivists believe that true objectivity is
impossible. Every observer is to a degree contaminated by personal, political and
ideological sympathies. Therefore, we cannot avoid taking sides. So, pursuing and
reporting the facts is always enmeshed in ideological and political choices.
(www.umsl.edu)
2.1.2 Hermeneutic view
Hermeneutic philosophy, developed by Wilhelm Dilthey and other German
philosophers, is the study of interpretive understanding, or meaning, with special
attention to context and its original purpose. The term hermeneutics refers to a Greek
technique for interpreting legends, stories, and other texts. To make sense of and
interpret a text, it is important to know what the author wanted to communicate, to
19
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
understand intended meanings, and to place the documents in a historical and cultural
context. (Patton, 1990:84)
Hermeneutic researchers use qualitative methods to establish context and meaning for
what people do. Hermeneutics are much clearer about the fact that they are constructing
the “reality” on the basis of their interpretations of data with the help of the participants
who provided the data in the study. If other researchers had different backgrounds, used
different methods, or had different purposes, they would likely develop different types
of reactions, focus on different aspects of the setting, and develop somewhat different
scenarios. (Eichelberger, 1989:9) Thus one must know about the researcher as well as
the researched to place any qualitative study in proper, hermeneutic context.
Hermeneutic theory argues that one can only interpret the meaning of something from
some perspective, a certain standpoint, or a situational context, whether one is reporting
the perspectives of people being studied (and thus reporting their standpoint or
perspective).
Difference of opinions has been common within the hermeneutics. Durkheim suggested
that researchers should look beyond the knowledge, understanding and perception of the
everyday person, in search for knowledge within the social sciences. Another scientist,
Weber, on the other hand would suggest that research should not ignore the actors’
perception of phenomenon or its surroundings, as that is what gives adds meaning to the
individual. Each of these approaches carries a risk with it, the risk of not having the
ability to see the underlying social structures and solely depend on the actors’
interpretations. On the other hand, an excessive exclusion of the perception of the actors
may miss out on the social context as individual motives are at risk of being neglected.
According to the hermeneutics, pre-understanding or prejudice is prerequisites. New
understanding is always based upon pre-understanding, without which we would lack
the focus in our research. In Popper’s view, pre-understanding gives us direction, to
which Kuhn uses the term paradigm. The relationship between pre-understanding and
new understanding is called the hermeneutic spiral. It states that, for one to describe the
phenomenon one must understand the context, and to describe the context one must
know the phenomenon. (Gilje & Grimen, 1992:175-193)
2.1.3 The authors’ scientific view
Throughout the methodology and the scientific theory course at Master’s level, the
authors have noticed that today, one seldom speaks of a die-hard believer of either the
positivistic or the hermeneutic view. Instead, researchers tend to find themselves
somewhere in between, either a bit more towards the hermeneutic or the positivistic
side. The authors find it difficult to limit this study as strictly hermeneutic or strictly
positivistic. As a blend of qualitative and quantitative method is used for this study, the
authors will both draw logical conclusions from the statistic data and create a deeper
understanding for the qualitative data. Therefore, the authors position themselves in
both the views. While positing ourselves in the hermeneutic view, it is believed that
individuals do form their own interpretation of phenomenon and act accordingly. The
authors also believe that, to understand why things are, as they appear to be, one must
understand the individual and the way he/she thinks. The positivistic view has its place
in science, but within social science it is of greater value to create an understanding of
the motives behind actions and thoughts of individuals, rather the predictions of such.
20
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
The positivistic positioning will be involved when logical conclusions will be made
from the statistical data. In the authors’ view, a combination of both these approaches is
the most appropriate for this thesis, since it enables an accumulation whilst allowing a
deeper and broad understanding of the phenomenon in question as the study makes its’
progress.
21
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
3 RESEARCH METHOD
In this chapter, the authors describe the method used in the thesis and also their motives
behind the chosen methods. In the context of this thesis, methods are the strategies,
procedures, and techniques for handling the problem of the thesis. This chapter
includes our deliberations in planning this study and choosing a research method. The
part regarding data collection covers the implementation of this study.
3.1 Case studies
The depth and detail of qualitative methods typically derive from a small number of
case studies, too small for confident generalizations. Cases are selected for study
because they are of particular interest given the study’s purpose. (Patton, 1990:53)
Case studies become particularly useful where one needs to understand some particular
problem or situation in depth, and where one can identify cases rich in information –
rich in the sense that a great deal can be learned from a few exemplars of the
phenomenon in question. Case studies are particularly valuable when the research aims
to capture individual differences or unique variations from one programme experience
to another. A case can be a person, an event, a programme, a time period, a critical
incident, or a community. Regardless of the unit of analysis, a qualitative case study
seeks to describe that unit in depth, in detail, and in context. (Patton, 1991:19)
3.1.1 The choice of case companies
As earlier mentioned, the case companies chosen for this study, are Siemens Medical
Solutions, Philips Medical Systems and GE Medical Systems. These companies are of
interest as they are called the three “giants” in the market of Radiology diagnostics. It is
both an interesting and challenging task to make a comparison of how their customers
perceive them in comparison to the competitors.
3.2 Induction versus deduction
Inductive analysis means that the patterns, themes, and categories of analysis come from
the data; they emerge out of the data rather than being imposed on them prior to data
collection and analysis. Inductive analysis begins with specific observations and builds
toward general patterns. Categories or dimensions of analysis emerge from open-ended
observations as the researcher comes to understand patterns that exist in the empirical
world under study. Induction contrasts with deduction, which is also called the
hypothetical-deductive approach of experimental designs that requires the specification
of main variables and the statement of specific research hypotheses before data
collection begins. (Patton, 1990:44)
22
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
3.2.1 The authors’ choice of analysis approach
The thesis has a deductive approach as we apply existing theories and models on the
collected data. An inductive approach would not be suitable for this study as the
theories are chosen prior to the data collection.
3.3 Qualitative versus quantitative method
The choice between conducting either a qualitative or a quantitative research must be
embedded in the desire of the outcome, and therefore the selection of the two must be
based on the purpose of the research. However, one method does not exclude the other.
Qualitative methods permit the researcher to study selected issues, cases, or events in
depth and detail; the fact that the data collection is not constrained by predetermined
categories of analysis. In qualitative research one is often, more interested in the
outcome of the interview objects’ own opinions and reflections, and therefore allows a
high degree of interaction and closeness. The essence of the qualitative method lies in
creating a deeper understanding of the problem in question, and though statistic
generalization or that the findings should represent all population is not the main
purpose of the qualitative research, the selection of the population is still of importance.
(Patton, 1990)
Quantitative methods, on the other hand, require the use of standardized measures so
that the varying perspectives and experiences of people can be fit into a limited number
of predetermined response categories to which numbers are assigned. Quantitative
research is of more controlled kind. The questions are well defined or highly structured
and a distance is maintained between the researcher and its object. As quantitative
research has a tendency of drawing general conclusions, high emphasis is put in the
selection of the source of information. The selection must be made in a way that the
conclusions are representative to the population. In quantitative research, the focus is
laid on the different ways, in which, one works, interprets, and presents the facts –
statistical methods are often used for quantitative studies, while the qualitative research
focuses on the relation between the researcher and the object. (Patton, 1990)
The advantage of a quantitative approach is that it is possible to measure the reactions of
a great many people to a limited set of questions, thus facilitating comparison and
statistical aggregation of the data. This gives a broad, generalizing set of findings
presented succinctly and parsimoniously. By contrast, qualitative methods typically
produce a wealth of detailed information about a much smaller number of people and
cases. This increases understanding of the cases and a situation studied but reduces
generalization.
3.3.1 The authors’ choice of research method
The choice of method is made in relation to the problem of the study (Holme and
Solvang, 1991:93). It is difficult to draw a strict line between a qualitative approach and
a quantitative approach. In this study, a part of the aim is to discover the decisive factors
behind the purchase of a CT-apparatus – factors such provide the value to customers
and lead to customer satisfaction – and also determine if the companies have actually
met the needs of their customers.
23
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
In the opinions of Holme and Solvang (1991), it would not be right to justify either a
strict qualitative or a strict quantitative method to be accurate for a study. Persistently, it
is an advantage to combine these methods in order to get the desired results. The
authors believe that a blend of a qualitative and a quantitative method is an appropriate
approach for this study. A qualitative study can sometimes be considered as a pre-study
for a quantitative inquiry (Ibid). But in many cases, both the approaches are of equal
importance and complement the strengths and weaknesses of each approach (Holme and
Solvang, 1991:94). The case is very much similar with this study. Initially, the emphasis
was put on deeper understanding of the factors behind the purchase decision, that lead
to customer satisfaction in the customers’ view – a qualitative approach as used, to
allow a higher degree of the interview objects’ own thoughts to arise. Since these
factors were not pre-determined, personal interviews were carried out using the KISSPmethod3 to find out the views of the respondents. Since all the respondents were put into
a similar situation and were asked similar kind of questions, a great deal of the study
was managed and controlled by the researcher.
Personal interviews were performed with the purpose of discovering the decisive factors
behind a purchase, what customers expect in terms of product and service, and what the
companies provide them with. These interviews were performed with 20 respondents to
get a relevant amount of data and so that the investigated customers could identify a
repeated pattern of factors. The factors identified may have a different meaning for each
respondent. Therefore, each identified factor was standardized to avoid any problem
caused by the lack of a consensus definition. These interviews were expected to provide
a good empirical ground on which the authors would base rest of the research – the
quantitative part of the thesis. To obtain the view of a great number of customers, a
survey with questions including the factors obtained from the personal interviews, was
prepared and then placed on a website. Since surveys are used in a quantitative
approach, it gives this study its’ quantitative features. The website was later on linked to
the respondents all over Sweden where they were able to enter their replies and views.
3.4 Data collection
Business research consists of two kinds of data collection: one can either collect new
data (Primary data) or use already existing data (Secondary data) (Källström, 1993:74).
Secondary data collection consists of data from earlier performed studies with high
relevance to the present study (Ibid). This data should be documented in a way that so
that high reliability and validity can be achieved in the research. Primary data collection
can be obtained in three ways: direct observation, interviews, and experiment
(Strömqvist, 1998:15). Primary data can further be divided in internal and external
information – the internal information is the information that is only available within the
organization or the company, the latter form of information is collected through public
sources.
3
It is an interview method that is explained in detail in chapter 3.4.3.
24
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
The pros and cons of the primary data collection (Aaker, 1999):
PROS
The information is adapted to
the problem of the study.
Current information is
available.
The possibility of structuring
the information.
CONS
Competence required by the
researcher.
Time-consuming.
The pros and cons of the secondary data collection (Ibid.):
To obtain a basic understanding of the used method, the authors have studied literature,
publications etc. The pros and cons of the secondary data collection are: (Ibid)
PROS
Cost-effective.
Time-effective.
A rich choice of sources
CONS
Useful data missing.
Wrong units, classification.
As a qualitative method is practiced to perform the personal interviews, that are a vital
part of the thesis, the authors have focused on the form of data collection that cover
such inquiries. Qualitative methods consist of three kinds of data collection: (1)
personal interviews, (2) direct observation; and (3) written documents. The data from
interviews consist of direct quotations from people about their experiences, opinions,
feelings, and knowledge. The data from observations consist of detailed descriptions of
people’s activities, behaviours, actions, and the full range of interpersonal interactions
and organizational processes that are part of observable human experience. Document
analysis in qualitative inquiry yields, excerpts, quotations, or entire passages from
organizational, clinical or programme records; memoranda and correspondence; official
publications and reports; and open-ended written responses to questionnaires and
surveys. (Patton, 1991:7)
3.4.1 Personal interviews
The key sources of primary data collection for this study have been personal interviews
and the survey (see chapter 3.4.3). To obtain a comprehensive view, both the suppliers
and the customers were interviewed. The authors aimed to perform personal interviews
of a standardized open-ended kind4. The purpose of interviewing is to find out what is
4
The standardized open-ended interview consists of a set of questions carefully worded and arranged
with the intention of taking each respondent through the same sequence and asking each respondent the
same questions with essentially the same words. Flexibility in probing is more or less limited, depending
on the nature of the interview and the skills of interviewers. The standardized open-ended interview is
used when it is important to minimize variation in the questions posed to interviewers. This reduces the
possibility of bias that comes from having different interviews for different people, including the problem
of obtaining more comprehensive data from certain persons while getting less systematic information
from others. The basic purpose of the standardized open-end interview is to minimize interviewer effects
by asking the same question of each respondent. It also makes the data analysis easier because it is
possible to locate each respondent’s answer to the same question rather quickly and to organize questions
and answers that are similar. (Patton, 1991:284)
25
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
in and on someone else’s mind. The purpose of open-ended interviewing is not to put
things in someone’s mind but to access the perspective of the person being interviewed
(Patton, 1990:278). Patton makes an interesting statement in his work:
“A skill and technique is a way of enhancing the quality of interview data, but no less
important than the skill and technique is a genuine interest in and caring about the
perspectives of other people. If what people have to say about their world is
generally boring to you, then you will never be a great interviewer.” (Patton,
1990:279)
Every research approach has its strong points and drawbacks. The authors tend to agree
with Taylor (1997) that participant observation provides a yardstick against which to
measure data collected through any other method. That is, no other method can provide
the depth of understanding that comes from directly observing people and listening to
what they have to say at the scene. Yet participant observation is not practical or even
possible in all cases. As a researcher, it is also important to point out the limitations of
interviewing. First, people say and do different things in different situations. Since the
interview is a particular kind of situation, you cannot assume that what a person says
during an interview is what that person believes or will say or do in other situations.
Despite these kinds of limitations personal interviewing was preferred as a key approach
for our study. The authors believe that it is in the hand of the researcher, getting to know
people well enough to understand what they mean, and creating an atmosphere in which
the respondents are likely to talk freely.
3.4.2 The KISSP interview method
The KISSP method is a qualitative method, used to measure customer satisfaction of a
company’s products. A computerized version of this method is called the eTRM method
(Electronic Total Relationship Management). The KISSP method estimates how the
customers experience quality in relation to the price of a company’s product. Through
the collected material, we can evaluate the customers’ perception of the product’s total
quality in relation to the price they pay for it. Later, the perception is compared to the
ideal relation between price and quality in a table. To examine, how the competitors are
positioned in relation to one another, calculations are made of relative product quality
for each one of the competitors. This way, it can be concluded how the company’s
products are positioned relative to the competitors and also if the companies’ perception
of their position is in accordance with the customers’ perception. (Mårding, 2001)
The method is divided into two parts. The first part contains personal interviews with
each customer. The interview technique is as follows:
The customer is questioned about the criterions (factors) behind his/her purchase
decision. In an uncontrolled way, the customer explores the most important/decisive
factors behind the purchase. Further, the customer is asked to distribute 100 points on
the criterions with regard to the relative importance of each criterion. The price is not
included in this distribution but is added as a separate part since the aim of the method
is to find out how much importance is given to the price in relation to the “relative
product quality”(that is all the other criterions put together).
26
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
The customer is then asked how much of the purchase decision is based upon the price
and how much is based upon the relative product quality – the respondent is asked to
distribute 100% on each attribute, i.e. distribute 100% on relative quality versus price.
The relative quality, here, is meant to represent all the purchase criterions (excluding the
price).
Further, the respondent is questioned about his/her knowledge of and experience of the
suppliers he/she has purchased from. When the suppliers are identified, each of them is
graded within a range of 1-10 on each purchase criterion. Number 5 is considered to be
an average ranking.
The second part of this method is working the collected data, with help of the
mathematical calculations that are later presented in a matrix. The matrix is illustrated in
figure 3-1 below:
High
Relative Price
5. Bad for the
customer
1. Luxuary
Quality
v/s Price
curve
mer
2. Average
3. Economical
Low
4. Good for the
customer
Poor
Superior
Relative Quality
Figure 3-1: The Matrix (Source: Estay et. al, 2001)
To obtain a comprehensive view, a survey including these identified factors was
prepared and sent to other customers in Sweden – which represents the eTRM study
(survey investigation). The 10 most frequent and by the customers perceived highly
important criterions were used in the survey investigation. The respondents had the
possibility of including additional factors and competitors they considered to be
important, but these factors were not included in the final results as these additional
factors and competitors were not mentioned by a large number of respondents. Using
eTRM, the respondents’ ability to freely express the purchase criterions diminished, as
the answers were based on pre-determined factors. However, the possibility of including
additional factors or competitors can be considered as a way of validating and ensuring
that the pre-determined factors included in the method are representative. The criterions
for perceived relative product quality, included in the survey investigation were selected
from the personal interviews performed with the customers and the suppliers. The
choice of criterions used for the study was based upon the experiences gained from the
personal interviews and the information about the Swedish medical market of radiology.
27
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
In this thesis, the eTRM were conducted in co-operation with Quicksearch, a company
specialised in performing effective market surveys electronically (over the Internet).
The questions were specified and the most frequently mentioned factors in the personal
interviews were used in the survey investigation. Everything was later on compiled on a
website which was linked to the customer/respondents in Sweden.
3.4.3 The survey
There are different kinds of survey investigations such as group survey, mail survey,
visit survey, and Internet survey. The authors have used the latter form of survey in this
study. It was a natural choice as a great number of the respondents (customers) were
located in hospitals all over Sweden and the authors did not have the resources to
perform personal interviews with all. There are both advantages and disadvantages of
performing electronic surveys. Some of the prime advantages with this method are; the
quickness, a larger population can be investigated, it is inexpensive, the interviewing
person cannot influence the replies of the respondents, as there is no direct questioning.
and finally the answers of the survey are registered in a database. However, there are
disadvantages with every method used – the major disadvantage with survey
investigations is the drop out of the respondents since the respondents do not feel
obligated or stressed to reply, or due to technical problems and hassle of incorrect email addresses. It is also difficult to get direct open-ended questions as the respondents
of a survey are used to Yes/No answers and not feel motivated to go any deeper. The
authors were of these disadvantages and have therefore performed a sufficient number
of personal interviews to cover the aim, in case of a large drop of respondents. After
much consideration, the authors decided that the advantages of this method weighed
higher than the disadvantages. The prime reason of choosing this method has been the
possibility to reach a larger population in a short period of time. (Dahmström, 2000)
3.4.4 Selection of respondents
The first step towards collecting data through interviews is to decide whom we want to
interview and who can provide us with the information we require for the study. The
research design of this study has been flexible to a great extent. Initially, neither the
number nor the types of respondents were specified, since data was desired from
respondents with different backgrounds. The selection started out with a general idea of
which people to interview and how to find them. There are a number of ways to find
respondents. One of the many ways to build a pool of respondents is snowballing –
getting to know some respondents and having them introduce you to others (Hartman,
1998). A potential drawback for the snowball technique is that it can limit the diversity
of your respondents. Therefore you need to be prepared to use a range of different
approaches to identify people. The authors began with telephone interviews to find out
from whom the desired information could be obtained. However, the authors agreed to
the fact that, to get the desired information and to obtain a comprehensive view,
interviews must be performed with people of different backgrounds. Through the
telephone interviews and personal visits at the hospitals, the authors learnt that the x-ray
doctors, medical engineers and the buyers/purchasers are the people directly related to
the buying process of the CT-apparatus and would provide us with the required
information. There were other people such as nurses involved in the procurement
28
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
procedure too but to limit the study, interviews were planned with the three abovementioned categories of respondents. To get a comprehensive view, salespeople in
different status positions were interviewed in the respective case companies.
The respondents for the survey investigation were selected through a list of entire
hospitals in Sweden. The aim here too was to get replies from people of three categories
in all hospitals. The authors performed telephone interviews with the doctors, the buyers
and the medical engineers in order to inform them about the study and get some
background information about them. Everyone did not have the possibility to participate
due to different reasons, such as some hospitals did not have a CT-apparatus while
others had not performed procurement for a long time. Hence, they did not have the
knowledge of current procurement procedure or the current market situation. About 53
respondents from total 80 hospitals in Sweden participated in the survey. These 80
hospitals include those hospitals where the personal interviews were performed.
Drop-out of respondents
Nearly 70 percent of the survey respondents replied and the rest could not participate
due to a multitude of reasons. Some did not have enough of skills to make judgements
about the equipment in question or the supplier, while others had not performed
procurement for a long time.
3.5 Validation of the thesis
Measurement instruments need to be constructed so they can yield results of high
validity and high reliability. The issue of validity and reliability is therefore of
importance for the authors in planning, designing and implementing this study. In this
section, the deliberations that the authors make and the measures that will be made in
order to achieve high validity and high reliability in the present study are presented.
As Silverman (1997) point out, the issues of reliability and validity are important,
because in them the objectivity of (social scientific) research is at stake. The validity
and reliability of qualitative data depend to a great extent on the methodological skill,
sensitivity, and integrity of the researcher. Systematic and rigorous observation involves
far more than just being present and looking around. Skilful interviewing involves much
more than just asking questions. Content analysis requires considerably more than just
reading to see what is there. Generating useful and credible qualitative findings through
observation, interviewing, and content analysis requires discipline, knowledge, training,
creativity and hard work. (Patton, 1990:11)
3.5.1 Reliability
Kirk and Miller define reliability as ‘the degree to which the finding is independent on
accidental circumstances of the research’ (1986:20). Reliability refers to the random
component of a measurement instrument. High reliability is considered to exist when
several measurements yield identical or almost identical results for the same respondent
on different occasions.
29
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
As the key part of the empirical data for this thesis has been obtained through personal
interviews, these were recorded in order to follow the statements of the respondents, and
not be focused on writing them down and maybe miss out on some important
information. Working with tapes and transcripts eliminates at one stroke many of the
problems that researchers have with the unspecified accuracy of field notes and with the
limited public access to them. Although tape-recorded data have intrinsic strength in
terms of accuracy and public access, special attention needs to be paid to the
inclusiveness of such data. (Silverman, 1997:205)
3.5.2 Validity
The validity of research concerns the interpretation of observations: whether or not ‘the
researcher’ is calling what is measured by the right name’ (Silverman, 1997:207). In the
discussions about validity, especially in qualitative research, there is an underlying
background assumption about a separation between the ‘raw’ observations and the
issues that these observations stand for or represent.
Validity in quantitative research depends on careful instrument construction to be sure
that the instrument measures what it is supposed to measure. The instrument must then
be administrated in an appropriate, standardized manner according to prescribed
procedures. The focus is on the measuring instrument – the test items, survey questions
or other measurement tools. In qualitative inquiry the researcher is the instrument.
Validity in qualitative, therefore, hinges to a great extent on the skill, and rigor of the
person performing the research. (Patton, 1990:14)
3.5.3 Triangulation
There are four basic types of triangulation: (1) data triangulation – the use of a variety
of data sources in a study, for instance, interviewing people in different status positions
or with different points of view; (2) investigator triangulation – the use of several
different evaluators or social scientists; (3) theory triangulation – the use of multiple
perspectives to interpret a single set of data and (4) methodological triangulation – the
use of multiple methods to study a single problem or a program, such as interviews,
observations, queues to interpret a single set of data; The terms triangulation and
multimethod are synonyms, although some researchers view triangulation as an aspect
of multimethod approach. In triangulation, researchers combine different data collection
methods when studying a phenomenon. In this study, this means that a qualitative data
collection method is supplemented with a quantitative data collection method or the
other way around.
The use of multiple data collection methods in a study can balance the methodological
shortcomings related to any single data collection method. (Patton, 1990; Gill &
Johnson, 1997) Triangulation is therefore believed to bring about greater validity and
reliability to this study.
30
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
3.5.4 Enabling high validity and high reliability in the present study
Validity is not achieved by replicating the methodology of previous research on the
same topic, because previous research methods may as well have shortcomings. By
replicating with as few changes as possible, the researchers would also replicate the
flaws and reduce the possibility to improve the previous research. In the authors’
opinion, good research attempts to improve the validity of the research methods used in
the previous research.
An investigation consists of several components, such as the problem, the case study,
and the context of the investigation, the respondents, and so on. In this study, the
authors have used data- and methodological triangulation to overcome the
shortcomings related to single data collection method. A variety of data sources has
been used for this study. People with different backgrounds in different status positions,
having different opinions, have been interviewed. As earlier mentioned, the authors
intended to interview people of three different categories in the hospitals: the doctors,
the buyers, and the medical engineers. Multiple methods of data collection were also
used. The sources varied from telephone interviews; personal visits at the hospitals,
personal interviews with the customers and suppliers, surveys and secondary data. This
is expected to bring about greater validity and reliability to this study. The personal
interviews that were performed were taped which reduced the possibility of
misinterpreting or missing out on information at the time of the interview. The data
collected through these interviews was documented and structured directly after each
interview.
31
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
3.6 Summarisation of the procedure
3.6.1 Procedure I
What do we want to know?
To what extent do the companies have a realistic view
whether the provided value, truly satisfy their
customers?
How will we find out
What we want to know?
A case study of three well-established companies in the
market of Radiology diagnostics with focus on the CTapparatus.
How do we perform the case study
Personal interviews + Survey
(KISSP-method)
in order to answer the main problem?
What kinds of information will we
obtain through these interviews?
The suppliers’ view of
and the decisive factors
of customer satisfaction.
The customers’ view of
and the decisive factors
of customer satisfaction.
Why do we wish to know it?
To identify and analyse the factors behind the customers’
purchase decision of the CT-apparatus. Identify and
analyse similar factors followed by the three companies
to achieve customer satisfaction.
What conclusions can we
make from this?
Compare and conclude the extent to which each of the
Companies have succeeded in this endeavour.
Figure 3-2: The procedure I
32
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
3.6.2 Procedure II
The Medical Solutions Market
The three biggest operators of the CT-apparatus:
Siemens
Medical
Solutions
Philips
Medical
Systems
GE
Medical
Systems
The Product: The CT-apparatus
Respondents of the personal interviews
Huddinge University Hospital
Södertälje Hospital
Karolinska Hospital
Uppsala Academic Hospital
Visby Lasarett
Norrtälje hospital
Siemens Medical Solutions
GE Medical Systems
Philips Medical Systems
Customers involved in the survey
investigation
(A list of these can be found in appendix
11)
Figure 3-3: The procedure II (Source: Own)
33
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
4 PROCEDURES AND NORMS FOR DECISION MAKING
In this chapter the regulations and directives for procurement in medical health care are
presented.
4.1 The Public Procurement Act
4.1.1 The Public Procurement Act (PPA) – a brief overview
The Public Procurement Act invests approximately 7000 billion SEK a year within the
European Union, while in Sweden it is 400 billion SEK a year. This is a Swedish act
that was initiated in 1994 and is based upon the European Union directives – it regulates
the procurement procedure within medical health care. It aims to make the public
purchasers perform a businesslike purchase and take advantage of the competition in the
market. It is a striving to act in The European Union, for a competitive European
economic life and to effectively use the public resources. (www.chamber.se, 2002-0403)
The PPA consists of seven chapters, where each chapter deals with different kinds of
regulations. Chapter one deals with the general regulations valid for all types of public
purchases. The PPA’s principal rule in 4§, chapter 1 describes the public procurement:
“The procurement shall be performed with a utilization of the existing competitive
possibilities and also be accomplished businesslike. The bidder, the candidates, and
the tender itself shall be dealt without irrelevant consideration.” ((SFS 1992:1528),
www.riksdagen.se, 2002-04-11)
Different types of procurements
The process and the legal requirements are applied on different forms of procurements,
representing a number of procedures that have to be followed. As a purchase of medical
equipment also includes service, it is of great importance that the procurement is
accomplished as per those rules set for that particular type of purchase.
The terms and concepts included and different types of PPA are as following:
(www.nou.se, 2002-04-04)
Public contract: a written agreement entered into by a contracting entity regarding
procurement in the meaning of this act.
Supplier: a person who provides supplies, undertakes work, or performs services even if
he is not the person who in any particular case provides or performs what has been
procured.
Framework agreement: an agreement entered into by a contracting entity and one or
several suppliers with a view to establishing all the conditions governing suborders
during a certain period of time.
Contract documents: the basic documentation for a tender provided by a contracting
entity to a supplier.
Tenderer: anyone who submits a tender.
34
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
Candidate: anyone who applies to be allowed to submit a tender in restricted or
negotiated procedures or selective procedures.
Invitation to tender: documentation in which the contracting entity invites suppliers to
apply to be allowed to submit a tender in connection with selective procurement.
The Public Procurement Act follows certain threshold values for different kinds of
procurements. The threshold value for procurement of medical equipment is 1.741.000
SEK (200 000 EURO). The first three of the following types of procedures may take
place for an amount exceeding the threshold value. The rest are only practised for a
purchase below the threshold value. (www.riksdagen.se, (SFS 1992:1528), 2002-04-11)
Open procedure: procurement when all suppliers are permitted to submit tenders.
Negotiated procedure: procurement when the contracting entity invites certain suppliers
to submit tenders and then negotiates with one or several of them.
Selective procedure: procurement when all suppliers are permitted to apply to submit
tenders and the contracting entity invites certain suppliers to submit tenders.
Direct procurement: procurement without tenders being required.
Restricted procedure: procurement when the contracting entity invites certain suppliers
to submit tenders.
Simplified procedure: procurement when all suppliers are entitled to submit tenders, the
participating suppliers are to submit tenders and the contracting entity may negotiate
with one or several of these tenderers.
4.1.2 The formal steps in a procedure
There are five formal steps in a procurement procedure (www.riksdagen.se, (SFS
1992:1528), 2002-04-11):
1. Advertising – PPA does not set any standards on the contents of an advertisement,
apart from the length of the letter that should not exceed 650 words.
2. Invitation to tender – these papers are the documents sent by the purchase unit to
the suppliers who have shown interest. These documents shall include:
A requirement specification is an essential part of the inquiry paper. It contains the
technical, functional and the clinical requirements compiled by the medical
engineers, doctors and the users. These requirements are of two kinds; “Shall” and
“Ought to” requirements. The “Shall” requirement must be fulfilled at the moment
of purchase, while the latter form is not of equal importance and can be issued for
instance a year after the purchase.
The commercial terms include payment and supplying terms, time of delivery, the
contract period etc.
The administrative regulations include the information such as the final date of
tender submission, time of tender validity etc. An important thing shall be cleared
in this part of the inquiry paper, that is, if the lowest possible price will be
preferred, or the most economically advantageous will be accepted. This fact has to
be informed of in the evaluation criteria as well.
35
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
Qualification requirements of the suppliers (while open- and simplified purchase).
3. Acceptance of tender: during open procurement, the final date for the acceptance
of tender should be valid 52 days from the announcement of the tender.
4. Evaluation of the tender and the tenderer may only be judged on the basis of the
criteria mentioned in the invitation of tender.
5. The procurement decision: on accomplishment of a purchase, the purchasing unit
must according to Chapter 1, 11§ in PPA (Ibid), for a purchase above the threshold
value, submit a justification letter containing why a the selected supplier was
preferred to the any other. These contracts may not be extended no matter how
satisfied the supplier or the customer is, as it is not permitted in the regulations of
PPA. On termination of a contract, a new agreement has to be signed. A possibility
for those who want to purchase from the same supplier without signing a new
agreement is a contract containing options. An option provides the customer with a
right to purchase additional equipment from the same supplier. This procedure is
only valid for heavy medical equipment.
4.1.3 Procurement within medical health care
A procurement process includes not only a person but, a group of people. Each year the
hospital management presents a budget for respective clinic at the hospital. It is the
responsibility of the clinic manager to make purchases within the given frames of the
budget, which provides him/her and the clinic with a limited economical scope. The
clinic manager may not make decisions regarding purchases exceeding 300 000 SEK
(Persson, 2002-03-21), a cost estimate has to be presented for further approval by the
director of the hospital. This cost-responsibility means that the clinic manager has to
express the motives behind every purchase. Accordingly, the director of hospital may
not grant procurements exceeding a certain amount; the matter is presented to the board
of directors for a further approval. The procurements exceeding the threshold value of
PPA are accomplished through advertising in EU (European Union).
(www.euroinfo.se, (SFS 2000:63), 2002-04-11)
An especially organised group makes the purchase decisions. This group includes
people having knowledge in different areas to cover all the aspects of the CT
procurement. The authors have not included all the participants in the procurement
process, since delimitations had to be made. The authors have not included the nurses in
this study but are aware of the fact that they have an important role in the process, as
they are the regular users of the equipment.
The clinic manager: apart from the responsibility of medical care, the clinic manager
has the responsibility of, approving every purchase, and also to report to the hospital
management. The responsibility of the purchase of the product is normally delegated to
a user/doctor who is familiar with the product requirements, for instance functionality
and ergonomics etc.
The purchaser: is either centrally placed in the hospital or in a separate division.
Normally, the buyer has an economical background and knowledge about public
purchase. The buyer’s primary task is of administrative nature; he/she has to make sure
that the formalities in the purchase procedure are met, which includes for instance
36
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
advertising and sending inquiry papers. It is important to emphasize that the responsible
buyer is a formal decision-maker and determines which tenders should be accepted.
The medical engineers: are the persons mainly responsible for maintenance and service
of the medical equipment. In large hospitals, there are separate divisions for medical
engineers and technicians. These divisions provide their technical competence at the
time of purchase of medical equipment to determine what quality and performance
characteristics is required. They also have the technical knowledge about different
standards the equipment should fulfil. In the purchase process, the main aim of the
participation of the medical engineers is to compile a technical requirements
specification but they can also take part in the evaluation of the submitted tenders. It is
of great importance to involve the medical engineers in the purchase process to avoid a
purchase of an equipment of inferior quality that may result in long-term economical
loss due to expensive maintenance-, education- and repair costs. It is of even higher
importance that the equipment is safe for the patients and the personnel and only
personnel with technical background can determine that.
The User/doctor: has today a significant role in the purchase process. His/her most
important task is to compile the requirements that are relevant for the field of
application. The user/doctor has undoubtedly the utmost influence during the “choice”
of the submitted tenders. (It should be noticed that it is not actually a “choice” in the
literal sense as only the products that best compile with the requirements are chosen.)
The purchase team: normally include, doctors, medical engineers, and the purchaser,
who with their common competence and a mutual decision accomplish the purchase
from beginning to the end. This way of working is often used when the products to be
purchased are utterly expensive or untried. An advantage of having a purchase team is
that the process can be easily controlled.
37
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
The procurement process
Under this section, the role of the persons taking part in the procurement procedure will
be explained. This is an example from Hospital X. However, the authors do not consider
this to be the best process description.
1. A need of a product/equipment arises and different measures are suggested.
2. The clinic manager (in few cases the division manager) is informed to take
action accordingly.
3. If the clinic manager has given the permission and the amount exceeds 300 000
SEK, a cost estimate has to be presented for further approval by the director of
the hospital.
4. The purchaser, the division manager, and the responsible doctor receive an
approval to proceed the written purchase.
5. The responsible doctor and the medical engineer together, write a requirement
specification to be included in the inquiry paper.
6. The purchaser compiles the requirement specification and makes it concrete.
7. The purchases exceeding the threshold value of PPA are accomplished through
advertising in EU (European Union). Advertisement is given in newspapers and
publications to inform the suppliers.
8. Inquiry paper is sent to the suppliers who showed interest.
9. The interested suppliers submit tenders that are compiled by the purchaser. A
primary sorting out of the tenders is performed to sift those who do not fulfil the
requirements.
10. After deliberation and if required testing the product/equipment, the purchase
team (including a user/doctor, medical engineer, and a purchaser) selects a
supplier.
38
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
5 THE THEORETICAL FRAME OF REFERENCE
In this section, the theories and models used to perform the empirical studies are
presented. Although, theories/models are presented in this section, the objective is not
to verify them. Instead, they are used as to provide the reader with a context, in which
the customer satisfaction is discussed.
5.1 Choice of theories/models
A variety of theories/models constructs relating to purchase and satisfaction evaluations
have been found in the literature. The selection has been a difficult task since the
authors came across many theories/models that were relevant for measuring customer
satisfaction and that were relevant for this study. For instance, the equity theory is based
on a sense of fairness between what is received and what is given (Woodruff, Cadotte &
Jenkins, 1983; Kotler, 1999) but it did not cover all the aspects the authors wanted to
investigate. The purchase of a CT-apparatus is a huge investment and the purchase
decision cannot solely be based on sense of fairness, since patient safety is at stake. The
attribution theory (Folks, 1984; Kotler, 1999;), Actual performance (Oliver & Desarbo,
1988), Comparison levels and comparison levels for alternatives (McCallum &
Harrison, 1985) although addressing reasons for performance outcomes, and actual and
compared outcomes respectively, give no consideration to the possibility of multiple
interactions and how they might be combined.
Gummesson (1979) and Halinen (1997) describe the buyer-seller interaction model,
which focuses on the stages of buyer-seller interaction in a professional service context.
It emphasises the decision process that leads to the selection of a professional firm. It
covers the complete process from pre-stage to post-stage, which is too massive and
interacts on an individual level while the authors seek to obtain a comprehensive
perspective. Wackmann et al. (1987) examine the factors that lead to satisfaction with
the relationship in its different phases. This theory did not do justice to this study as
only the aspect of customer-supplier relationship was considered as a ground for
satisfaction.
The dimensions of service quality (Fitzsimmons, 1998) present a number of factors
behind the concept of satisfaction such as expected quality and perceived quality. It is a
basic but relevant model though it does not cover all the perspectives of service and
product satisfaction neither the gaps between expectations and performance, which the
authors were interested of. Only few steps in this model could be used for the study.
The authors decided to complement this model with Grönroos (2000) “The gap analysis
approach”.
Almost all of the previously discussed theories and models pertain more directly to
satisfaction evaluations of products and can not be easily generalised to the purchase
and services related to the medical equipment. Nor have any of the previously
mentioned satisfaction theories addressed all the important service related evaluative
criteria. Consequently, the authors decided to put together two of the most relevant
theories/models and find similarities and differences between them in order to obtain a
clearer picture. The final choice of theories and models resulted in the following: The
39
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
gap model analysis and dimensions of service quality in a modified version (main
source Grönroos, 2000; Fitzsimmons 1998), Customer satisfaction theory (Grönroos,
2000). The Public Procurement Act (earlier presented in chapter 4) was used as a model
in the analysis to place the theory against the regulations and see what the reality looks
like. It was a natural choice for this study as purchase of medical equipment takes place
under certain regulations, and thus this was the most relevant way of investigating it. In
the opinions of the authors, the chosen theories and models will be of great help to fulfil
the aim of the thesis and also enhance the results of this study.
5.1.1 Critic towards the chosen theories and models
The authors agree to the fact that no theory is ‘the best’, they all complement each other
in one-way or the other. The theories and models chosen for this study provide the
reader with only a part of the customer satisfaction concept. Other factors such as
customer value, customer loyalty and profitability play a vital role in the customer
satisfaction concept. The authors are also aware of the fact that the concept of customer
satisfaction can be interpreted and investigated in many different ways, and the choice
for this study may not be the only or the best approach. A drawback regarding the use of
The Public Procurement Act could possibly be that it is not equivalent to any scientific
theory as it is based upon regulations.
5.2 Customer satisfaction
5.2.1 From value to satisfaction
According to Grönroos (2000:147), the total service offering including core solutions
and additional services, how the quality of this offering is perceived compared to the
perceived sacrifice of customers, determines customers’ perceptions of this offering
and, in ongoing relationships, the value of the relationship. Customers are satisfied with
perceived quality provided that the sacrifice involved - price and relationship costs - is
not too high. Hence, perceived value determines customer satisfaction.
Satisfied customers may become committed to the supplier or the service provider
because of two reasons. One, they are pleased with the level of sacrifice involved in the
relationship. Second, they trust the other party. Customer satisfaction also contributes to
the formation of bonds between the two parties, bond that tie customers to the supplier,
because they make it easier, more comfortable or more economical for the customer to
continue to patronise the same firm. Past experience influences and controls repurchases
or future purchases to a great extent.
5.2.2 From satisfaction to relationship strength
Customer loyalty evokes from strong relationships with the customers, and customer
satisfaction has a direct impact on relationship strength. However, the effect also applies
to customer commitments and bonds between the two parties. The more committed a
customer is to a company and the more bonds that exist between them, the stronger the
relationship will be.
40
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
5.2.3 From relationship strength to relationship length
It is natural that the stronger the relationship is, the longer it will last. Customers do not
always see incentives to stop doing business with the same supplier. At the same time, a
strong relationship can make the customers perceive that fewer alternatives exist, and
this lack of alternatives has a positive effect on the length of a relationship with the
current supplier. Also, a lack of perceived critical episodes has a similar influence.
5.2.4 From relationship length to relationship profitability
As costs of customer acquisition can be minimized, and in many cases opportunities
exist for premium pricing, the length of a relationship itself has a positive effect on
profit. A higher patronage concentration has a positive effect on the revenue streams in
the relationship with any given customer. In addition, a more cost-efficient episode
configuration, where unnecessary elements in relationships, such as answering customer
questions and recovering service failures, can be avoided, and less expensive ways of
performing a service can be introduced and accepted by customers, has a positive effect
on relationship costs. Hence, a stronger relationship can be expected to directly
influence customer relationship profitability, and does this indirectly through improved
revenue streams, higher relationship revenue, and more cost-efficient service processes
and lower relationship cost.
5.3 The Gap analysis model
”It is important for a firm to manage service quality well, but it is essential for it to
manage service failures even better.” (Grönroos, 2000:97)
The original gap analysis model (illustrated in appendix 9) is intended to be used for
analysing sources of quality problems and to help managers understand how service
quality can be improved. The model illustrated in figure 5-1 is a modified version of the
actual gap model by Grönroos (2000) and ‘Dimensions of service quality’ by
Fitzsimmons (1998). The modified version is inspired from these two models. The
authors modified the models in order to make these relevant for the present study. If the
original version of the models were to be used for this study, the main essence of the
empirical findings would be lost and the authors would not have a clear connection
between empirical findings, the theories and the reality. Hence, the modification was
necessary to cover all the aspects the authors wanted to enhance in this study. The
model has been modified in a way that few steps have been removed while some have
been added in order to present and explain the empirical facts in a way relevant for this
study.
Figure 5-1 presents different aspects of the gap analysis approach. Primarily, this model
demonstrates how service quality emerges. The upper part of the model includes
customer-related phenomena, while the lower part shows phenomena related to the
service provider. Customer satisfaction with service quality can be defined by
comparing perceptions of the service received with expectations of the service desired.
When expectations are exceeded, service is perceived to be of exceptional quality – and
also to be a pleasant surprise. When expectations are not met, however, the service
41
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
quality is deemed unacceptable. When expectations are confirmed by perceived service,
quality is satisfactory. As figure 5-1 shows, these expectations are based on several
sources, including word of mouth, personal needs, and past experience.
CUSTOMER
The
medical
engineer
The
doctor
The
purchaser
Word of mouth
communications
Past experience
Personal needs of the
customers
Expected service (ES)
Gap 1
Gap 3
Gap 2
Perceived Service Quality
1. Expectations exceeded
ESRS (Quality surprise) 
2. Expectations met
ES=RS (Satisfactory quality):-I
3. Expectations not met
ES>RS (Unacceptable quality)
Received service (RS)
Service delivery
MARKETER
GE
Siemens
Philips
The salespeople
The suppliers’
perceptions of
customers’ expectations
Suppliers’ perceptions of
the personal needs of the
customers
Figure 5-1: The gap analysis approach
(a modified version inspired from Grönroos, 2000:101 and dimensions of service quality (Fitzsimmons,
1998))
In figure 5-1 three discrepancies between the various elements of the basic structure, socalled quality gaps are illustrated. These quality gaps are the result of inconsistencies in
the quality management process. The ultimate gap, that is, the gap between expected
service and received service (Gap 3), is, of course, a function of the other gaps that may
42
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
have occurred in the process. The three gaps, their consequences, and the reasons why
they occur are discussed below.
The management perception gap - perceptions of customers’ personal
needs (Gap 1)
This gap means that the management perceives the personal needs of the customers and
quality inaccurately. This gap can occur due to:
 inaccurate information from market research and demand analysis;
 inaccurately interpreted information about expectations;
 non-existent demand analysis;
 bad or non-existent upward information from the firm’s interface with its customers
to management; and
 too many organisational layers which stop or change the pieces of information that
may flow upward from those involved in customer contacts.
The customers’ expectations and suppliers’ perception of these (Gap 2)
This gap means that service quality specifications are not consistent with the suppliers’
perceptions of the quality expectations of the customers. This gap is a result of:
 planning mistakes or insufficient planning procedures;
 bad management of planning;
 lack of clear goal-setting in the organisation; and
 insufficient support for planning for service quality or top management.
The perceived service quality: the received service and service delivery
gap (Gap 3)
This gap means that the perceived or experienced service is not consistent with the
expected service and also that, quality specifications are not met by performance in the
service production and delivery process. This gap focuses on the difference between
expected and received service. This gap is due to:
 specifications which are too complicated and / or too rigid;
 employees not agreeing with the specifications and therefore not fulfilling them;
 specifications not being in the line with the existing corporate culture;
 bad management of service operations;
 lacking or insufficient internal marketing; and
 technology and systems not facilitating performance to specifications.
This gap results in:
 negatively confirmed quality (bad quality) and a quality problem;
 bad word of mouth;
 a negative impact on corporate or local image; and
 lost business.
All services have certain aspects that are essential to the equipment and the service and
others that are not essential but enhance the service experience. If the essential factors
are present, they are often not even noticed as they were expected to be there anyway
(ES=RS = ). If, however, these factors are absent, the customer is likely to be upset –
in other words not satisfied (ESRS = ). Such experiences are likely to cause
reactions, which will influence customers’ subsequent evaluations of the equipment, the
43
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
service and the supplier. On the other hand, when service enhances are absent, they may
not be noticed but if they are present, they will be – which means giving the customer
more than expected (ES>RS = ). The customers will feel very good about such
experiences and will base their evaluation on the good delivery. (Fitzsimmons, 1998)
5.4 Summarisation of the theories/models
Theory/Model /Author
Equity theory,
(Kotler, 1999)
Chosen for A short summarisation
this study
theory/model
Attribution theory,
No
(Folks, 1984);
Actual performance,
(Oliver & Desarbo, 1988);
Comparison levels and comparison
levels for alternatives,
(McCallum & Harrison, 1985)
The buyer-seller interaction model, No
(Halinen, 1997 & Gummesson,
1979)
Yes
The gap analysis model,
(Grönroos, 2000)
Yes
The customer satisfaction theory,
(Grönroos, 2000)
Yes
The Public Procurement Act,
(The board of public purchase)
Yes
the
Based on a sense of fairness between what is
received and what is given. For instance,
name awareness and strong brand
associations.
These theories address to reasons for
performance outcomes, and actual and
compared outcome respectively.
No
Dimensions of service quality,
(Fitzsimmons, 1998)
of
Focuses on the stages of buyer-seller
interaction in a professional service context.
It emphasises the decision process that leads
to the selection of a professional firm.
Present a number of factors behind the
concept of satisfaction such as expected
quality and perceived quality.
Analyses sources of quality problems and
explains the gaps between expectations and
performance. It also discusses the suppliers’
perceptions of customer expectations and
compares them with the actual customer
expectations that actually lead to
satisfaction.
Explains the different stages of customer
satisfaction to provide the readers with an
overview of the meaning of the concept and
terms related to it.
PPA is the regulation under which the
purchase of medical equipment is made. It is
based upon The European Union Directives.
Table 1: Summarisation of the theories/models
44
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
6 EMPIRICAL FINDINGS
In this chapter, the authors intend to provide the reader with an overview of the basics
of computed tomography and also facts about the case companies. For deeper
understanding about the technology and the terms and concepts, see appendix 8. This
chapter also presents the empirical findings obtained through the personal interviews
and the survey investigation. A summarisation of these is presented at the end of the
chapter.
6.1 Computed tomography
Computed tomography has had a revolutionary impact in the history of diagnostic
medicine. The word “Tomography” derives its origin from the Greek word “tomos”,
which means cross section. The CT technique is used for imaging cross sections of an
object using a series of X-ray measurements taken from different angles around the
object. And the object can then be viewed in a three-dimensional perspective on a
screen. The CT-apparatus is a common product and the majority of the hospitals in
Sweden have one or more of these.
Computer assisted tomography (CT-scanning) is a method developed in the 1970s.
Godfrey Hounsfield in England developed the first prototype of a CT apparatus in the
1960´s. In 1979, Hounsfield and Gormack were announced as the noble price winners in
medicine, for this very achievement. Ever since, new developments have led to faster
scanning, better dose usage, and improved image quality. The precise techniques have
changed considerably since then and so has the name given to it. (At present it is
generally known as ‘CT scanning’.) The CT scan is a digital image produced by the
computer from a large number of direct transmission measurements at different angles
through the patient. The computer reconstructs the image and displays it on a screen.
Images obtained from a CT-apparatus differ from conventional X-ray pictures in
different ways. The main difference between these is that the final CT-picture is worked
out with the data gathered from different projections of the object. The most recent
development in the world of computed tomography is the multislice technology.
Generations of CT vary from single-slice to multislice computed tomography.
Multislice spiral CT increases the diagnostic efficacy over single-slice spiral CT for all
clinical applications. Faster data acquisition allows faster administration of contrast
media, which dramatically improves contrast enhancement. Large volumes of data can
be acquired during a breath-hold, which reduces misregistration of artefacts, and
overlapping slice reconstruction can be performed without increasing patient dose, thus
improving the quality of the images. The images show the organs with correct inner
size, which facilitates that the amount of dose can be planned before the radiation
treatment so no unnecessary amount of dose is given to the patient. An advantage with
the digitalisation of the images is that, the doctors can diagnose the images behind the
working stations5 while the nurses can go ahead and examine the next patient.
5
For definition see appendix 6
45
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
Risks with CT
There are certain risks involved for the patient in every type of examination. Some may
not be too major, but still important enough to be considered. During an x-ray
examination, the risk evaluation is complicated than in any other examination. A major
risk for the patient could occur if the diagnosis is missed, either due to technical
complications or a failure of the image interpretation. (Jacobson, 1992) The most
renowned risk using x-ray equipment is the risk of radiation dose. In order to ensure the
best examination, information about exposure conditions for the patient throughout the
examination is needed. The prescriber and practitioner need to have a parameter for
dose, which can be compared between different modalities, is communicable to patients
and can be summed over different anatomical areas. This value should permit an
estimation of risk to be made, in order to justify the examination. (GE Medical systems,
2001)
6.2 The case companies
The information in this section is collected partly from the homepages of the respective
companies, and from the personal interviews with the customers and the suppliers. The
references will be given in form of respondent and the date when the statement was
made. No names will be disclosed due to privacy issues.
These companies are similar in many aspects, as they are well-established names not
only in the Swedish market of radiology diagnostics but also on the global platform.
These companies operate in diverse markets – providence of medical solutions is only
one of their numerous operations. They have been customer-oriented for years and own
high market shares in the European market as well as on the global platform
(Respondent, 2002-01-24). They are successful in several regards and it is difficult to
determine who is better than the other in all respects (Respondent, 2002-01-24).
Siemens is the market leader with 45 percent of the CT-market shares in Sweden while
GE has 35 percent and Philips 20 percent of the Swedish CT-market shares.
(Respondent, 2002-04-09) Last year 21 CT-apparatuses were purchased in Sweden, 17
of them from GE Medical Systems (Respondent, 2002-03-21).
Siemens is originally a German corporation and was founded 154 years ago. It has more
than 450,000 people in 190 countries over the globe. The company has expertise in
creating solutions in electrical engineering and electronics. Siemens medical solutions,
is one of Siemens’ many businesses. Siemens medical solutions, is also called Siemens
Med. Med is renowned for its products, services and complete solutions, ranging from
imaging systems for diagnosis and therapy equipment for treatment to Electro medicine
and hearing instruments to IT solutions. Current trends demand more efficient health
care systems. Majority of the Siemens’ products are less than three years old. The
company has undergone a transformation - from a product-oriented to a processoriented enterprise. They now do over 90% of their business outside Germany. Its’ two
main offices are located in Germany and Sweden. Siemens is the only manufacturer of
CT-apparatus in the Swedish market of Radiology diagnostics (Respondent,2002-0325). It manufactures CT scanners from the economical Spiral CT to multislice CT
scanner for volume scanning. Numerous clinical applications, e.g. Dental CT or
Perfusion CT, round out the product line. (www.siemens.se, 2002-02-20)
46
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
Royal Philips Electronics of the Netherlands is an electronics company that has
189,000 employees in more than 60 countries, active in the areas of lighting, consumer
electronics, domestic appliances, components, semiconductors, and medical systems.
Philips Medical Systems provides portfolios of medical systems for diagnosis and
treatment. When Philips Medical Systems began its program of acquisitions, it found
companies that fit together well in terms of technology and products, but also in terms
of the characters and people as well. In Radiology, Philips Medical Systems features
imaging from MR and CT to nuclear medicine and ultrasound. Philips manufactures and
supplies x-ray systems for radiography, fluoroscopy, and is specialized in fields as e.g.
surgery, urology, lithotripsy, and mammography. (www.philips.se, 2002-03-09)
About 10 years ago, Philips was positive about the fact that MR would replace CT – as
a result the CT-development was stopped in the company for a few years. But when
Elscint introduced the multislice technology in 1992, they realised their mistake. Elscint
was not a huge success initially until Picker developed the technology further in 1998.
(Respondent, 2002-03-20) On realisation of the importance of mutislice technology,
Philips decided to give it another try. Since Philips did not have CT-apparatuses of the
latest technology – an acquisition was planned. Through the acquisition of Marconi
Medical Systems, Philips is now expected to perform better in the CT-market. The
combined technological strength of both companies will now be integrated into this
platform. The result of the development is said to excel in clinical capabilities, both in
existing and new applications (Respondent, 2002-04-09). Philips Medical Systems has
today four different models of the CT-apparatus. They vary from single-slice to
multislice apparatuses.
General Electric (GE) Company is a diversified services, technology and
manufacturing company. It operates in more than 100 countries and employs 313,000
people worldwide. The Company is originally American and traces its beginnings to
Thomas A. Edison, who established Edison Electric Light Company in 1878. In 1892, a
merger of Edison General Electric Company and Thomson-Houston Electric Company
created General Electric Company. GE is the only company listed in the Dow Jones
Industrial Index today that was also included in the original index in 1896.
(www.gemedicalsystems.com, 2002-03-11) GE Medical Systems is one of the wellknown names in medical diagnostic imaging technology, services and health care
productivity. Products include computed tomography (CT) scanners, X-ray equipment,
magnetic resonance imaging (MR) systems, nuclear medicine cameras, ultrasound
systems, patient monitoring devices, and mammography systems. GE has over 15
models of CT-apparatus on the global platform, while 7 of those are sold in the Swedish
market. Last year (2001), GE was responsible for the 80 percent of the CT sales in
Sweden (Respondent, 2002-03-21).
Similarities and differences
The companies are similar in the regard of being well-established enterprises not only in
the Swedish market but on a global platform as well. Their common product line in the
market of radiology diagnostics and the medical health care being only a small part of
their diverse businesses, adds to the similarities. These companies are well versed with
the CT-market. One of the main differences among these three companies is that GE
Medical Systems and Philips Medical Systems are niche companies while Siemens acts
on a broader level in the market of medical health care products.
47
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
6.3 The personal interviews
The respondents chosen for this study are of four categories. The first three categories;
six X-ray doctors, five medical engineers and four purchasers are the customers
interviewed in this study. The fourth and the final category are of the five salespeople at
different status positions in the respective case companies. A motive behind the choice
of these particular groups is presented in (chapter 3.4.4). The customers and the
salespeople identified various factors as driving forces for the procurement of the CTapparatus.
The factors mentioned by the customers
The factors mentioned by the suppliers
Availability
Customer-supplier relations
Clinical applications
Diagnostic needs
Delivery time
Examination time
Ergonomics
Education
Functionality
High process accuracy
Image quality
Installation time and requirements
Radiation dose
Service
User-friendly
Attract personnel
Availability
Customer-supplier relations
Clinical applications
Diagnostic needs
Delivery time
Examination time
Ergonomics
Education
Functionality
High process accuracy
Image quality
Installation time
Radiation dose
Service
User-friendly
Modern technology
Cut-size
Communications standards
Environment
References
Research and development
Reconstruction
Resolution
Same as previous
Working environment
Working station and software
X-ray tube
Perfusion technology
Table 2: The driving factors mentioned by the customers and the suppliers.
Table 2 presents the driving factors mentioned by the customers and the suppliers,
during personal interviews. The grey marked factors are those that the customers and
the suppliers have in common. The not so frequent factors have their own place in this
study, but to limit the analysis of collected data, the authors chose to place their details
in appendix 6. However, they will be shortly mentioned in the presentation of the
personal interviews, as they are a part of it. The ten most frequent driving factors
48
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
obtained from the personal interviews are presented below; they are mentioned in order
of relative importance.
The driving factors in order of frequency
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Service
Education
User-friendly
Image quality
Ergonomics
Radiation dose
Availability
Functionality
Examination time
Modern technology
Table 3: The driving factors in order of frequency.
This table represents the most frequent factors mentioned by both customers and suppliers during the
personal interviews. These are not the same as the most important factors.
6.3.1 Respondents category 1 – The X-ray doctors
Educational background of the interviewed doctors is basic medical education with
specialisation into radiology. Some of them have dual education, interesting
combinations such as a doctor and an archaeologist, a doctor and a Masters in
engineering (civilingenjör), a doctor and a purchaser. The level of experience varies
depending upon the period of time they have been working in this particular profession.
It varies from 3-25 years.
The driving factors
The driving factors mentioned by the X-ray doctors are: modern technology, education,
service, environment, functionality, equipment compatibility, customer-supplier
relations, image quality, examination time, ergonomics, user-friendly, radiation dose,
and finally the supplier evaluation.
The majority of doctors agreed to service, image quality, and radiation dose being the
most important driving factors. Only two of the six doctors emphasised the importance
of user-friendliness. Some of the doctors feel that choosing a particular supplier or a
product from the same as previous supplier, eases the use of manuals and it leads to less
education time. Same supplier is preferred due to the familiarity of manuals and
working stations while one of the doctors state the following:
“ Equipment of same as previous supplier reduces education costs as new equipment
requires new education.”
“ One should not exaggerate the user-friendliness. People learn and get used to new
things in due course, even though they may be attached to using manuals of the
49
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
previous equipment. One should keep in mind that procurement is a detailed
evaluation of numerous factors.”
“ Of course we would buy from new suppliers. But most of the times, at the end of the process the
purchase is performed with the same as previous supplier.”
Two of the doctors state that it is essential for the regular users to feel comfortable while
using the equipment. Therefore, nurses too are involved in the procurement process.
However, there are doctors who feel user-friendliness is a concept that is difficult to
define. Whether or not the equipment is user-friendly is hard to evaluate, only the
individual judgement of every user can determine that, as they spend long working
hours using the equipment. That is where the working environment comes in the
picture. The hospitals are nowadays working towards digitalisation of the X-ray
systems. Some are already digitalised while others are still planning to take the step.
The digital working environment requires CT-apparatus of the latest technology, which
is certainly one of the driving factors for a CT-procurement. Only one of the doctors
emphasised the importance of the modern technology and stated that:
“ The rapid development of CT (both hardware and software) drives the customers to purchase. The
equipment you by today will be of outdated technology in another few months or a year. As a doctor it
is one’s responsibility to support modern and effective technology.”
At the same time he feels that it is an advantage to purchase from the same as previous
supplier to make it easier for the personnel. Another reason behind wanting the same
equipment is that two equipments of the same brand can replace one another – in case
one crashes, the other could take over. Another doctor expresses that the technology is
heading way too fast – he is not able to follow the latest. He also feels that having
equipment of the latest technology today is no big deal as it may be outdated next year
anyway – so modern technology is not an interesting factor. Image quality is noticed to
be another determining factor among the doctors.
“ It is important that we get the required diagnosis. Sometimes radiation dose has to be increased in
order to obtain a better image quality and accurate diagnosis. The higher the radiation dose, the
better we can see the minor details. Since a high dose could be risky for the patient, we try to keep a
balance.”
Image reproduction is related to the examination time. A CT-apparatus can easily
generate 700-1000 images per examination. If it takes one second for each image to be
displayed on the screen, the waiting time will be 700-1000 seconds; which is a very
long time during emergency situations. Radiation dose is another factor related to the
image quality. The higher the dose, the better image quality. The doctors feel that it
should considered for the safety of the patients and in particular for the personnel who
work with it every day. The radiation doses have increased with years and the
respondents feel that the suppliers should do something about it.
“ The CT represents 5 percent of the total X-ray examinations done in Sweden while merely the CT
stands for 50 percent of the total radiation dose in all the X-ray examinations. The suppliers should
work towards reducing it.”
In regard of ergonomics a doctor made an interesting statement:
“ One is forced to keep it in regard or it is totally uninteresting for us. We would like to keep it in
regard but it is hard to keep the money, at least in the medical health are sector. Before, lines were
50
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
drawn in what was medically possible. Nowadays, lines are drawn keeping the budget in regard –
how much money there is to invest.”
Price/Quality
The doctors agree to the fact that the suppliers are fairly equal in price. Something that
weighs higher than the price is the cost of services and the life cycle cost that could be
equal to the price of the equipment. An average value of the price-quality comparison
among the doctors is 13 percent and 87 percent respectively.
” It depends on your position. As an X-ray doctor you would certainly value the
factors higher than the price. Since I have am both a doctor and have earlier
experience as a purchaser, I would say 50-50. Price is equally important as the
relative quality factors. I would skip a few functions if I had to do so in order to get a
cheaper deal.”
” Price is not determining but in case of huge differences in price, it can be
considered as a driving factor. ”
” Of course we are concerned about the prices. We have dealt with all suppliers on
the market and know pros and cons of buying from these. I feel the best CTequipment should be in the university hospitals.”
The Public Procurement Act
The views among doctors differ about whether The PPA eases or obstructs the purchase
procedure. Different views of the doctors are presented below:
“ It can sometime obstruct the procedure - collaborated agreements should be allowed
under the regulations of PPA.”
“ PPA controls the procedure in a good way. It helps to keep the prices stable and the
competition fair. Its’ absence could result in bargaining and briberies.”
“ It can sometimes be disturbing when you want to purchase from the same as previous
supplier due to past experience of a particular supplier.”
“ I did not follow The PPA during the previous procurement, but upgraded the
procurement though the equipment was new.”
“ I don’t like The PPA since in theory it excludes the possibility of negotiation. In
theory a well-advised requirement specification has to be prepared. If all the tenderers
fulfil the requirements then the price become a determining factor…It is not allowed to
prepare a requirement specification only one supplier is able to fulfil, but if you know
the rules of the game you can surely do it without being noticed by the rest. Instead of
using the resources for a procurement performed under The PPA, it is much better to
negotiate with the suppliers as they are very few.”
However, a common viewpoint among the doctors is that one learns with time and
experience. It takes time to learn what a requirement specification should include.
Sometimes they wish they did not make all the SHALL-demands they actually made.
51
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
They express that the hard part of following the regulations is that when all the cards are
put on the table nothing can be changed even if they would like to do so. They know
what is available in the market so they want the best possible for whatever price they
pay.
A new form of procurement that seems to be popular among all the categories of
respondents is, ‘functions procurement’ which means purchasing functions instead of
equipment. The doctors think that the hospitals perform functions procurement while
the suppliers have a different opinion about it. The doctors state that the suppliers are
not matured enough to perform functions procurement while the suppliers think the
same about the customers. One of the doctors feels that the best CT-equipment should
be in university hospitals.
The customer-supplier relation
One of the doctors mentioned something really interesting about the significance of a
customer-supplier relationship. He stated that during the latest procurement he made, he
was very happy with Philips because what their offer seemed really interesting and
exciting. But everything was still on paper and no such existed by that time. The
purchase group then decided not to purchase from Philips. They were offered the same
from Siemens, CT-equipment existing only on paper but they agreed to purchase it even
before it was made – only because they had good relations with Siemens and also faith
in them.
“ I have real good experience of GE and think they have the finest equipment and a very
good service organization. It is really important to have good relations with your
supplier, it helps you to make decisions where both parts are happy.”
“Good relations between a customer and a supplier are essential for the purchase to
end in satisfaction for both the parts. Since this relationship is long-sighted its
important you feel comfortable with the supplier you purchase from.”
All the doctors agree to the fact that interpersonal chemistry is an important trait for the
salespeople. The way they try to sell and market the product holds lots of importance
for procurement. The respondents mentioned incidents when they avoided considering a
supplier any further because of inappropriate performance and insufficient competence
of the salespeople. The doctors would like to stay independent from the suppliers.
Word of mouth is considered as a very important way of communication during
procurements. Customers sometimes seek information about the market and the latest
equipment from other customers. The suppliers or the customers themselves arrange
reference visits to other hospitals in order to view the latest equipment in use.
Sometimes seminars are arranged and conferences are held – where the companies bear
the costs. But in the opinions of the doctors it is important not to be obliged to any
supplier and therefore bear their own costs in order to make decisions without the
suppliers influencing them.
52
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
Other comments
It has been noticed that in a purchase, the clinic manager (often a doctor) has the final
say. They want the best equipment. The doctors also express that; since the suppliers of
CT-equipment are relatively few on the market, it is likely to keep up the competition
and hold the prices stable. The choice has to be made between GE, Siemens, Philips,
and Toshiba. Toshiba is a Japanese company and an old supplier of CT, they
disappeared from the Swedish market few years. Toshiba was too expensive and wanted
to make quick money while the Swedish market was very marginal in that regard. They
are now back in the market and can be considered as a competitor to the rest of
suppliers.
6.3.2 Respondents category 2– The medical engineers
Educational background of the majority of the medical engineers’ interviewed for this
study is basic high school engineering (gymnasieingenjör) with complementing
technical courses while others are university engineers. One of these has clinical
background (nurse education). The level of experience varies depending upon the period
of time they have been working in this particular profession. It varies from 5-30 years.
Earlier work experiences of the medical engineers include consulting etc.
The driving factors
In the opinions of the medical engineers, modern technology, service, and ergonomics
are noticed to be the determining factors.
“ Modern technology is a must to be in the spot light. Advantages are many – the
latest multislice technology is quick and effective, reconstructs advanced images and
provides professional diagnosis.”
“ Philips is the world’s best when it comes to the latest technology – but only on
paper. They haven’t been able to provide the market with the required.”
Ergonomics is one of the other driving factors according to the medical engineers. They
put a great deal of emphasis on the comfort of use. They want the personnel to be a part
of the procurement procedure. The community feeling holds a lot of importance for
them.
Radiation dose is not a determining factor but noticed as a major problem today. The
medical engineers state that almost 50 percent of the radiation dose comes from the CT
examinations. They feel that it is necessary to take actions since it is risky for the
personnel in the long run. It is important to determine what kind of examination is
required to obtain particular diagnosis.
Price/Quality
An average value of the price-quality comparison among the medical engineers is 17
percent and 83 percent respectively. All the respondents had similar views about the
price-quality relation. The majority of the respondents give priority to the quality factors
53
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
rather than the price of the equipment. Most of the respondents have liking for particular
suppliers especially GE and Siemens.
“ I hope that the price is the least concern of the customers. For me, it is completely
uninteresting since I prioritise the quality of the equipment. It is fact that we have a
budget to follow – but sometimes the price of the good quality equipment exceeds the
budget and I never buy the cheapest deal but the optimal deal.”
The Public Procurement Act
“ I don’t think The PPA particularly effects the procurement. We are responsible to
follow the regulations so we have no choice. It is merely a formality for everyone to
make similar purchase decisions and not to obstruct the competition. The PPA on
other hand reduces the possibility of collaborative agreements that would be so
much better in few cases.”
“ The PPA is good but sometimes too much to handle. On one side we want the
freedom to make choices while on the other side we have to follow certain
regulations and also know what is there in the market before we set any demands
The PPA makes it hard to be a customer – one should certainly try to follow The
PPA but it sometimes set unreasonable requirements that are time-consuming.”
“ The PPA is both positive and negative in the sense that the regulations are pretty
fine but I think we should focus on the functions procurements rather than the
traditional ones in the PPA.”
The customer-supplier relation
“ In regard to CT, I find all suppliers equally good. I have personally made
reference visits to view the latest equipment to determine what is good and what is
less good. All procurements need references that help us to make correct judgements
about the driving forces such as image quality, short examination time etc.”
“ Good customer-supplier relations are important for both the parts even though
they are not allowed under the regulations of The PPA. Relations help you to make
purchases ending in satisfaction of both the parts.”
“ Indirect bribery has a certain effect on the procurement. For instance when the
companies pay the conference visits and dinners of the customers.”
“ I would rather buy from a supplier I am not familiar with rather than the same as
previous.”
“ Personal contacts hold no importance to me. I would rather purchase from a
supplier I am not familiar with. The visits of the salespeople are certainly important
but one has to act like a professional in such situations.”
54
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
Other comments
Many respondents as well as those from other categories have mentioned that due to
few competitors in the CT-market, the prices are kept on fair level. They also feel that
the university hospitals purchase merely according to their needs while the small
hospital purchase expensive and latest equipment in order to attract radiologists and as a
result they exceed their budgets.
The price of the equipment has relatively less importance compared to the quality
factors. The initial price is said to be unimportant while the equipment can prove to be
expensive in the long run with the service and reparation costs. The service contract
only provides service at determined point and times of a year. Other equipment crashes
is service provided on payment.
The respondents also believe that the suppliers may have price collaborations. As they
are few on the market, it is easier for them to keep an eye on each other or even cooperate at some level. When it comes to environmental factors, the respondents feel that
all the suppliers are equally poor in this regard – they hardly fulfil the norms.
6.3.3 Respondents category 3 – The purchasers
Educational background of the purchasers differs from respondent to respondent. Some
have basic higher secondary education with complementing clinical courses while
others have Masters of engineering (civilingenjör) and clinical background. Experience
has proven to be a vital factor involved in the employment of a purchaser. The level of
experience varies depending upon the period of time they have been working in this
particular profession. It varies from 1-18 years.
” I don’t think we have performed perfect procurements. I believe there are even worse and better
than those we made – we have a potential to make things better.”
The role of a purchaser can vary depending upon in which stage of the procurement
he/she is involved. Those who are closer to the process and its’ details are often seen to
be working in the same division as the medical engineers. This gives them opportunities
to ongoing discussions the technical and the clinical details with the doctors and the
engineers and also to be a part of the process right from the beginning to end. Being
involved at an early stage has another advantage to the purchasers – that is sharing
equally good relations with the suppliers as the doctors and the engineers do. If these
are only called in during the final stages of procurement, it is noticed to be a result of
their lack of understanding of the technicalities and the clinical applications of the
equipment.
The driving factors
The driving factors mentioned by the purchasers are: modern technology, education,
service, environment, working environment, availability, functionality, equipment
compatibility, customer-supplier relations, delivery time, image quality, examination
time, ergonomics, user-friendly, radiation dose, and finally the pay terms. The picture of
the driving factors among the purchasers varies to a great extent. Some express that
55
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
factors such as service and education are not the determining ones as they are obvious to
be included in the package deal of a CT-apparatus. One of the purchasers expresses that:
“ We set the demands to determine the kind of service and education we want. So it is
not about what we get, it is about if we get what we asked for.”
The purchasers express their experiences of service with different suppliers:
“ The level of service in Siemens is poor due to lack of service engineers.”
“ Philips provides better service than Siemens and GE.”
Modern technology, functionality, and image quality seem to be the most important
factors for a purchase, but the level of importance varies. Below are different statements
on the importance of functionality and modern technology as driving factors.
“Functionality is the most important factor while purchasing a CT-apparatus.”
“Functionality of the CT-apparatus is an obvious factor since we only buy an
equipment if it fulfils its functions – hence it can not be regarded as a driving factor.”
“ The equipment purchased today will be outdated tomorrow. Everybody wants the
latest things in order to keep up with the development. It is important that equipment
like CT does not get outdated too early since it is really expensive and can only be
bought once in probably 10-15 years.”
Very few of the purchasers mention the examination time, radiation dose and the
modern technology as important factors. They believe that the suppliers are aware of
these things always try to become better than the other in these areas. In their opinion,
modern technology is an obvious but not determining factor for purchase of a CT.
“We live in an era of constant development and the suppliers are aware of the fact that
only modern technology can survive in this rapidly changing world, where
products/equipment are replaced by a newer model all the time.”
Ergonomics is said to be another one of the determining factors, as the apparatus has to
be comfortable and easy to use for the regular users such as nurses and doctors. If the
personnel of a hospital is used to certain manuals, and feel comfortable with it, the fact
is taken in regard during the next purchase.
“ Sometimes a purchase is solely based on the past experience of an apparatus.”
“ GE does not emphasise on the ergonomics.”
56
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
Price/Quality
An average value of the price-quality comparison among the purchasers is 27 percent
and 73 percent respectively. The purchasers were asked about the relevant importance
of the price versus all the quality factors put together. The replies varied from
respondent to respondent.
“ Price must be 30 percent out of 100. If there is not enough of finance to institute the
purchase, we could skip one/few functions to get a cheaper deal.”
“ Price must be 10 percent out of 100. It depends on what demands you set from the
beginning. The price cannot be considered as a cost but is an investment. The quality
factors have their own price, it has to be taken in regard that the image quality is for
instance 20 percent of the total price amount while service may correspond 40 percent
etc. The important thing is that it is easy to work with and fulfils its functions, as it is
equipment used constantly over a number of years. In whole, the price has not much
importance in the overall evaluation.”
“ Price has to be 50 percent out of 100. The price is always secondary but never an
ignoring factor in relation to all the other quality factors. In case of a great number of
SHALL-demands, the price has to be considered seriously. Since all the demands are
already set out, the choice of supplier can only be based on those who can fulfill those
demands, so the determining factor should be the price.”
“ It is important that we make a good deal and get the quality for the price we pay.
There is no use in buying crap. It is about buying the right product/equipment for the
right price.”
“ It is hard to determine what you get for the money. The suppliers often talk about
providing this and that in a few months or a year. We customers are interested in what
we get ‘Today’ in exchange of the money we pay.”
The Public Procurement Act
When the respondents were asked about whether or not they felt The Public
Procurement Act helped them during procurement, different opinions were expressed
regarding this issue:
“ It is meant to be a help for the suppliers, not for the customers.”
“Everybody should have the same grounds to base their decision on, that it is not
practised is a different story. I think it is important to follow the regulations as they
are particularly set up for procurements in medical health care.”
“ Comparing of brands cannot be avoided while choosing a CT-apparatus, though it
opposes the regulations.”
“ People being impartial are a major problem. It is difficult to make equal and fair
judgements when big supplier names and contacts are involved. During
procurement, a supplier is often compared to another supplier. It may be easier if
57
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
one would not disclose the names of the companies and let the judgements be made
on the basis of the information about the equipment. If you want to perform a strict
and correct procurement, the actual evaluation should be based upon the
requirements of the equipment versus the price – but this is seldom the case.”
“ It is hard not to compare the brands. It is all about building a routine and a respect
for The Public Procurement Act – it helps to keep the competition up and also the
procurement should be performed businesslike.”
“ One has to be utterly disciplined to want a Volvo when offered a Rolls Royce. It is
a well-known fact that if ‘The best’ is available, you obviously want it even though it
opposes the PPA.”
Other viewpoints of the purchasers are that most people are interested in doing good
business deals and function procurement is the best deal in today’s procurement. They
feel that The PPA should be renewed or modified to bring harmony between the era we
live in today and the possibilities that should be available. It would ease the more
complicated kind of procurements where following the regulations would not be equally
strict. They also feel that with function procurement both parts could have a ‘dialogue’
or even a partnership with the suppliers.
The customer-supplier relation
“ I don’t think the suppliers know what the customers want.”
“ Relations certainly have an effect on the procurement procedure. But relying your
decision on good customer-supplier relations may not always result in the best
purchase. The product/equipment may appear to be different than expected.”
“ Customer-supplier relationship effects a procurement to a great extent. If a
supplier is in your good books, it will surely be considered above all the other
candidates during the next procurement.”
The purchasers did not find the price differences to be huge between the suppliers. The
majority expressed that the differences are minor as the market is pretty regulated.
” I have a feeling of that they are competitors. It certainly affects the market since
they are few competitors and keep an eye on each other. They normally get in touch
with the doctors and the medical engineers and know when a procurement is current,
even before we purchasers are informed about it.”
“ Few suppliers, keep an eye on each other – no fair competition.”
Other comments
As earlier mentioned, the clinic manager often has the final say in a purchase while the
authors got the picture that the purchasers are “supposed” to have it – but this has not
been practiced in many of hospitals. The doctors want the best equipment while the
purchasers are concerned about the budget. A purchaser is only responsible for the
decision on paper. It has been noticed that in a purchase, the clinic manager (often a
58
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
doctor) has the final say. The doctors also express that; since the suppliers of CTequipment are relatively During the interviews with the purchasers, it was noticed that
they often lacked the confidence while determining which company was better than the
other in certain aspects and providence of factors. The authors also noticed that they
often brought economical factors to attention rather than the technical and clinical ones.
Some of the respondents expressed that the suppliers may have hidden collaboration
concerning the prices, but that the customers would rather prefer a tough but fair
competition where even new suppliers are given a chance.
“ It is always stimulating to have new suppliers in the market. It is our responsibility
to keep the competition alive.”
6.3.4 Respondents category 4 – The salespeople
Educational background of the salespeople working in different status positions varies
from high school engineering to Masters of economy (civilekonom) and Masters of
engineering (civilingengör). The level of experience varies depending upon the period
of time they have been working in this particular profession. It varies from 10-25 years.
Respondents of this category vary from salesperson to sales in charge and Vice
Director. The authors have chosen not to separate the respondents in further categories
as they are relatively few and their views will be placed against the customers’ views
(the previous three categories). The authors believe that the salespeople represent the
companies.
The driving factors
The driving factors mentioned by the salespeople are: diagnostic needs, clinical
applications, modern technology, education, service, environment, working
environment, availability, functionality, equipment compatibility, customer-supplier
relations, attract personnel, image quality, examination time, ergonomics, user-friendly,
radiation dose, and finally the delivery time.
One of the most interesting parts of this study was to see if driving factors of the
salespeople’ are the same as the customers’. There are some significant differences
between the opinions of the salespeople and the picture of the driving factors among
these and the customers vary. However, the salespeople agree to image quality,
availability, user-friendly, attract personnel, and customer-supplier relationship as the
driving factors for procurement. Here are some examples of factors that the respondents
found to be the most important in procurement.
“ The user-friendliness is an important factor in Sweden but not in the rest of Europe –
it is because that nurses have an influence in the procurement. They emphasise on the
user-friendliness, doctors on the image quality, while medical engineers focus on the
technicalities.”
“ There are three factors driving factors behind a purchase the customers make; 1) they
want a good CT-apparatus; 2) they want to purchase from a well-reputed company that
has a good service package deal; 3) and they want the cheapest deal possible. We
59
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
haven’t been able to provide the customers with the cheapest deal but our equipment
have good performance characteristics.”
“ Our products/equipment are user-friendly. This is one of the reasons we sold so many
CT-apparatus last year.”
“ Availability is an important factor to the customers since CT is an emergency
equipment and is used during long hours. The availability of CT-apparatus varies from
97 percent to 98 percent depending on the supplier.”
The respondents state that small hospitals purchase equipment such as CT-apparatus to
attract personnel since doctors would rather work in hospitals where the latest
technology in form of such equipment is available. Below are comments on the factors
that were regarded as less important by the respondents.
“ Radiation dose can sometimes be an issue of concern. But it is an issue that only the
customers can deal with, not the suppliers. It is in the hands of the customers to control
the dose. The radiation dose is sometimes increased in order to obtain a greater image
quality. One should always be on the safer side rather than being unsure. It is better to
increase the dose if required to obtain a better diagnosis.”
“ Education is not an important factor.”
“ When it comes to ergonomics, GE is good enough but Siemens and Philips lag
behind.”
“ The multislice technology used by GE is miserable but they seem to sell in anyway.”
As some of the customers earlier mentioned Siemens being a poor service provider –
the question was raised during the interviews with the salespeople at Siemens. They
agreed to that it could be the case and that there is a shortage of service engineers and
stated that “...everything can be better.”
Price/Quality
An average value of the price-quality comparison among the salespeople is 25 percent
and 75 percent respectively. The salespeople regarding the price/quality question made
some interesting statements. Some of them feel that price has great deal of importance
during procurement since the customer has a budget to fit. It does not matter how good
the equipment is, if it is too expensive they will not buy it.
“ It varies from customer to customer. Few say that they want particular
performance characteristics and are ready to cross their budget, while some tell how
much money they have got and ask what they get for it, and the price determines the
kind of equipment that is purchased.”
“ The customers choose to purchase what they need rather than going for the
cheapest deal. If customers would buy the cheapest deal, we would never sell
anything, because we are never inexpensive.”
60
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
“ Mostly, the quality factors weigh higher than the price but there are customers who
give more importance to the price since they have limited budget circles. This varies
from customer to customer.”
The Public Procurement Act
The viewpoints of the majority of the salespeople here are relatively similar. They state
that having good relations with your customer effects the regulations to a great deal. If
you have good relations and your customer trusts you then you definitely have an
advantage to all the other suppliers. They feel that The PPA does not keep the
competition up since more importance is given to relations to the customer, which
obstruct the competition.
“ The regulations keep the market prices stable and gives the suppliers an opportunity
to view the other tenders after a procurement is accomplished. This controls the price to
a great extent; since every supplier wants its price to be on the same level as the
competitors.”
“ I don’t think that The Public Procurement Act has an effect on the prices or the
procurement procedure as far as the suppliers are concerned. If the regulations were
not there, we would still be able to figure out the price competitors set for a CTapparatus.”
“ All the customers try to be objective during procurements because they are bound by
the regulations, but no can fulfil it. If they have more liking for the product/equipment of
a particular supplier, they will buy from him – which turns the procedure into a
subjective procurement.”
“ The Public Procurement Act has surely an effect on the purchase, but sometimes the
customers make unreasonable demands in under the pretext of the regulations.”
“ The Public Procurement Act is good and most of the customers follow it. The
competition is tough though we are only three or four competitors in the CT-market.
The purchasers are competent which doesn’t always give the suppliers an opportunity
to make profits.”
The companies believe in “Function procurement” more than any other type of
procurement. It makes it easier to obtain the latest function. Function procurement
means that functions are purchased instead of equipment. There is nothing such as
Function procurement in the regulations as yet, but with the increasing interest of the
suppliers and the customers it may be added to The PPA.
The customer-supplier relation
“ A procurement consists of three steps: 1) the product/equipment including the
service; 2) the price; 3) and the most important step for the companies is, the
contributions of the salesperson i.e. the customer-supplier relationship, as this is the
only platform where suppliers actually compete.”
61
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
“ I don’t think one has to be nice in order to sell a product/equipment. However, the
customer-supplier relationship has a great significance in procurements. It is about
building trust. When a customer buys a product/equipment worth millions – they
would like to feel confident about the supplier that makes the delivery.”
“ Relations are really important. If you keep your promises during a procurement,
you will surely be in the customer’s good books for the next procurement.”
“ Relations to the customers are important not determining while selling equipment
such as CT-apparatus.”
“ Good relations include knowing the need of customers which helps the suppliers
can put forward a better offer “
“ GE can lower the prices sometimes when they feel like being inexpensive – but also
be high and mighty and expensive.”
“ I think Siemens is in a better position than the of all the other suppliers today. It is
a well-established company and has been in the Swedish market for over 20 years
and has a large range of products/equipment to offer, while GE and Philips are more
of niche firms in regard to medical systems and have only been here for the past 10
years.”
62
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
6.3.5 A brief summary of the personal interviews
The statistics of the personal interviews (presented in appendix 10) reveal the following
results regarding the customers having better experience of a particular supplier (It can
also be interpreted as that they have better relations with the particular supplier):
46% of the customers have a better experience of Siemens;
18 % of the customers have a better experience of GE; and
36 % of the customers have a better experience of Philips.
The doctors
The medical engineers The purchasers
The salespeople
The driving
factors
Service
Image quality
Radiation dose
User-friendly
Service
Modern technology
Radiation dose
Ergonomics
Modern technology
Image quality
Functionality
Less important
factors
Environment
Ergonomics
Clinical applications
Diagnostics needs
References
Customer-supplier
relation
Image quality
Availability
User-friendly
Attract personnel
Customer-supplier
relations
Radiation dose
Education
Price v/s Quality
Price
Quality
13%
87%
17%
83%
27%
73%
25%
75%
10%
25%
33%
30%
90%
75%
67%
70%

Does not allow
base a decision
on instinct
reasoning.


Good in the way
that it keeps the
prices stable and
the competition
fair.
(average value)
The PPA
Good:
Obstructs
competition:
The customer-

Relations are


The majority is

critical to The PPA
but they agree that
it is both positive
and negative for a
purchase.

Some follow the
regulations as a
constraint; want the
freedom to make
choices devoid of

strict regulations.
Views vary about
63
Critical to The
PPA but also
concerned about
following the
regulations.

The PPA does
not keep the
competition up.

Relations hold
more
importance,
which obstructs
the competition.

Having good
Everybody should
have the same
grounds to base a
decision on.
Be utterly
disciplined in the
decision making.

Being impartial is
a major problem.

Customer-
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
essential for the
purchase to end
in satisfaction for
both the parts.
supplier relation

the degree of
importance of
customer-supplier
relations.
supplier relations
do influence
procurement to a
great extent.
relations with
customers is
important to the
suppliers.
To some medical

engineers, personal
contacts hold no
importance, while
to the rest they are
highly important.
If a supplier is in 
your good books,
it will surely be
considered above
all the others
during next
procurement.
Keeping your
promises helps
you get close to
he customers
and knowing
their needs
better.

Other comments

Function
procurement
should added to
The PPA.

University

hospitals purchase
according to their
needs while small
hospitals make big
purchases in order
to attract personnel.
The suppliers
don’t know what
their customers
want.
Hidden

collaboration may
take place
between the
suppliers, which
obstructs the
competition.
The doctors
want the best
equipment while
the purchasers
are concerned
about the
budget.
Table 4: A brief summary of the personal interviews
6.4 The survey results
Appendix 7 presents the results of the survey investigation. The authors chose to place it
in appendix to reduce the possibility of complicated calculations distracting the reader.
A summarisation of the survey results will be presented in chapter 6.5 along with the
statistical results from the personal interviews.
64
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
6.5 Summarisation – personal interviews + the survey investigation
In this section, the authors present a summarisation of the statistical results of the
personal interviews (for details see appendix 10) and the survey investigation (for
details see appendix 7) along with the ten driving factors in order of their importance
presented below. Please note that these factors are presented in order of importance (not
in order of frequency as in table represent the are not the same as presented in table 3).
It is interesting to see that the most frequently mentioned factors are not always the
most important ones. For instance education that was the second most frequently
mentioned factor is the least important factor according to the customers and suppliers.
The driving factors in order of importance
1. Image quality
2. Service
3. Functionality
4. User-friendly
5. Modern technology
6. Ergonomics
7. Radiation dose
8. Examination time
9. Availability
10. Education
Table 5: The driving factors in order of importance.
This table is not equivalent to table 3. The difference between these is that table 3 represents the most
frequent factors while table 5 represents the factors in order of their importance.
The figure 6-1 shows the relative importance of price versus quality valued by the
respondents. The quality is much more important than the price. There are particular
cases where the price was rated equal to the relative quality factors.
Figure 6-1: The relative importance of price versus quality valued by the respondents.
65
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
The driving factors
Image quality
Service
Functionality
User-friendly
Modern technology
Ergonomics
Radiation dose
Examination time
Availability
Education
Approximate average value
The customers’ valuation of the suppliers in providence of
each particular factor
GE
27%
33,50%
30,50%
35%
41%
22,50%
24%
33%
39,50%
35%
32%
Siemens
29,50%
32%
33,50%
35%
51%
36,50%
33,50%
32,50%
39,50%
26%
36%
Philips
31,50%
29%
38%
40%
39%
27,50%
18,50%
35%
28%
21,50%
31%
BA
7,5%
BA
4,5%
BA 3%
Price evaluation of a
A
49,5%
A
54%
A
55%
supplier
AA 43%
AA 41,5%
AA 42%
Below average (BA)
Average (A)
Above Average (AA),
Very expensive
21%
48%
17%
% of the customers that
use equipment from:
The rest of the 14% use CT-equipment from Toshiba (7%) and Picker (7%)
Table 6: Summarisation of the statistical results; personal interviews + survey investigation.
Table 6 represents the approximate average value of the statistics from the personal
interviews and the survey. After consideration, the authors chose to go ahead with an
average value of the statistical results, as the results did not differ much from each
other. The approximate average value in table 6 can be interpreted as that the customers
have valued all the three suppliers almost equally. However, differences are revealed on
the individual treatment of the factors and the suppliers. Customers consider Siemens to
be a leader in modern technology, ergonomics and providence of availability while
Philips leads in the sectors of functionality, user-friendliness, image quality, and
examination time. In the opinion the customers, GE and Siemens need to work towards
better user-friendly equipment. The level of service is interpreted to be fairly equal with
all suppliers but GE is slightly better than Siemens and Philips. According to the
customers, GE also provides better education packages and GE and Siemens have
greater availability concerns than Philips does. Philips is perceived to provide better
image quality in its’ equipment than the competitors, as a result Philips is poor in
keeping the radiation doses under control while Siemens and GE are better at it. The
customers also emphasise on GE being poor in the department of ergonomics.
For the majority of the customers GE, Siemens and Philips are perceived to be fairly
equal in price. It is important to clear that majority of the customers use Siemens
equipment.
66
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
7 ANALYSIS
This chapter places the theories against the empirical findings. The analysis covers the
results from both the personal interviews and the survey. The qualitative data collected
from personal interviews is emphasised in the analysis and supported by the statistics
(quantitative data) from the survey investigation. Therefore, the reader is requested to
keep in mind that the references are given back to the empirical findings, specifically to
the personal interviews.
The result of the personal interviews and the survey could be analysed in several ways
as a wide range of data was collected. The differences in results of the customer
categories could be analysed, or the results of suppliers could be compared. Another
alternative is to place the customers’ views against the views of the suppliers or analyse
the data by comparing the driving factors mentioned by the customers and the suppliers.
The authors chose to analyse the alternatives that in their opinion best answered the
main problem and fulfilled the aim of the thesis. The alternative ways of analysis
chosen for this study are as following:
- the differences between the personal needs of the customers;
- the gap between the personal needs of the customers and the suppliers’
perception of these;
- the customers’ expectations and suppliers’ perception of these;
- the expected service v/s received service; and
- the customer satisfaction theory v/s The Public Procurement Act.
7.1 The gap analysis approach
7.1.1 Word of mouth
In theory, word of mouth is an important part of marketing communications. This study
has revealed that the customers find it to be a very important aspect of the procurement
procedure. Rumours are said to be the most common form of word of mouth
communications in medical health care. The customers seek information about the
market and the equipment available from other customers (hospitals) and suppliers. This
way they learn about the positive and the negative aspects of the equipment and the
suppliers as well. It helps the people involved in the procurement to make their own
judgements about the equipment to be bought. Doctors, medical engineers and the
purchasers take advantage of the contacts in other hospitals and find out what is new
and current in the market. The companies arrange reference visits to other hospitals that
give the customers an opportunity to view the equipment in use. These personal visits
are golden opportunities for the suppliers to make the customers believe in their
product/equipment by personally talking and convincing them of the Excellency and
benefits of the product/equipment. Another way of influencing the customers is by
paying their travel and residency costs for the reference visits. Therefore, majority of
the customers choose to bear the costs themselves, as they want to stay independent
from the suppliers while making their choice, and also because no suspicion of
favouritism or supplier influence should arise.
67
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
Word of mouth is mentioned to be one of the reasons behind GE’s sale success of the
CT-apparatuses last year. GE is a well-established name in the Swedish market (also
worldwide) not only in medical health care but also in other sectors. Good image of a
company can sometimes lift up the sales of its products/equipment.
7.1.2 Past experience
According to Grönroos (2000) (see chapter 5.1) past experience influences and controls
the future purchases to a great extent. This has proved to be true within the purchase of
medical health care as well. The customers’ past experience can easily be figured out
from their statements where they talk more of a particular supplier and compare it to
another one who is less good or not at all good in their opinions. If every customer has
liking for a particular supplier, it will obstruct the competition since each supplier will
only have a limited number of customers. As a result, no new suppliers would be able to
enter the market or get a chance to prove themselves, as the customers are so attached to
the suppliers they already have.
Past experience of a particular supplier is noticed to control a purchase to a great extent.
If a customer shares good relations with a supplier, that supplier is ought to be in the
good books of the customer during next procurement. This is certainly not allowed
under the regulations of The Public Procurement Act but hospitals do this anyway to
ease the use for the personnel who is used to certain manuals and working stations.
According to them, new equipment requires education that is both time-consuming and
expensive. Therefore, purchase from same as previous supplier reduces the education
costs. This can also be an instinctive act as some customers stated in the personal
interviews that they do not mind trying new suppliers, but they automatically go back to
the same as previous supplier. This is where trust comes in the picture. Trust is an
important factor – suppliers seek to be trusted while customers seek to be heard and
validated. Past experience is based upon trust. Two things are important for the
customers in order to enter a trust-relationship; the customer-supplier interaction and the
market environment. The market environment is important since CT is a purchase worth
millions and the equipment will be used for years. It is utterly important to investigate
whether or not a supplier is likely to be in the market in the near future.
The customers emphasise the importance of good customer-supplier relations as it helps
to build a long-term relationship while and ends in satisfaction of both the parts. One of
the doctors mentioned something really interesting about the significance of the
customer-supplier relationship. In one of the procurement cases a customer seemed to
be happy with Philips but the CT-equipment in question was only offered on paper and
the customer did not have sufficient faith in that Philips would succeed with its’ ideas.
When the same was offered from Siemens, a CT-equipment existing only on paper, the
customer agreed to purchase it even before it was made – only because they had good
relations with Siemens and also faith in them. This certainly shows the significance of
the trust in relations, though medical health care is supposed to be a sector where
purchases should be made independently without any involvement of favouritism.
Below are some examples selected from the empirical findings that verify the
importance of customer-supplier relations.
68
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
“ I have real good experience of GE and think they have the finest equipment and a very
good service organisation. It is really important to have good relations with your
supplier, it helps you to make decisions where both parts are happy.”
“Good relations between a customer and a supplier are essential for the purchase to
end in satisfaction for both the parts. Since this relationship is long-sighted it is
important that you feel comfortable with the supplier you purchase from.”
As a summary, the authors could say that there are no major differences within the three
categories of customers, i.e. in the views of the doctors, the medical engineers and the
purchasers when it comes to past experience but differences occur from hospital to
hospital. The past experience of a supplier influences their perceptions about that
particular supplier. However, some of the customers as following have expressed
interesting supplier experiences:
“ The multislice technology used by GE is miserable but they seem to sell in anyway.”
“ Philps is the world’s best when it comes to the latest technology – but only on paper.
They haven’t been able to provide the market with the required.”
“ The level of service in Siemens is poor due to lack of service engineers.”
As this latter statement was made before the personal interviews with the salespeople
were performed, the authors took the opportunity to ask Siemens whether or not they
agreed to this statement. The authors got a reply where the salespeople did not simply
deny the fact that there had been complaints about service but also agreed to the fact
that it is due to lack of service engineers also considered it to be an economical
question. In the salespeople’ own words “ ...everything can be better”. Other customers
confirmed this too, and some of them agreed to Philips and GE being better than
Siemens in service providence. The authors noticed that these replies varied from
customer to customer. If a customer had been purchasing Siemens equipment for years,
they were happy with that company and had no major complaints about the supplier or
its’ equipment. Here is when user-friendliness comes in the picture. The doctors feel
that it is essential that the regular users feel comfortable using the equipment. They also
feel that it is an advantage to purchase from the same as previous supplier to make it
easier for the personnel. Below is an example verifying that past experience does play a
vital role in future procurements:
“ Sometimes a purchase is solely based on the past experience of an apparatus.”
Sometimes the companies may not have great relations with the supplier they purchase
from, but that they do it merely because of past experience and equipment familiarity. It
has been noticed that some customers are not satisfied with the supplier they purchase
from but still they consider it for next purchase because of easiness of use in the
equipment.
69
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
The differences between the personal needs of the customers
Figure 7-1: Personal needs of the customers – relative factor differences in the three customer
categories.
Figure 7-1 above represents the personal needs of the customers. As the figure shows,
no factor is strikes as to be 100 percent important. There are significant individual factor
differences in the three customer categories. Ergonomics, user-friendly, functionality
and examination time seem to be the factors whose importance differ in the views of the
doctors, the medical engineers and the purchasers. The differences between these
factors are the most remarkable. Medical engineers emphasise ergonomics more than
the other respondents to a great extent, while the purchasers give more importance to
functionality and user-friendliness than the doctors and the medical engineers.
According to the purchasers, the first aim should be the image quality and function of
the equipment. As far as having the latest technology is concerned, the respondents
themselves, especially the purchasers are critical to modern technology being a driving
factor. They express that a modern technology will be outdated in another few months
or a year to come. The functions of the equipment are more important. The development
in the world of CT has surely made immense progress in the past couple of years, which
has led to that some customers are not able to follow the rapid development. The
uncertainty of what is better than other is due to poor market knowledge that results in
that the customers cannot always initiate procurement until a market survey
investigation is performed.
As it was mentioned earlier, the purchasers are not as updated as the rest of the purchase
group. In the procurement procedure (see chapter 4), it should be the responsibility of a
purchaser to keep an eye on what is new on the market and inform the rest of the group,
70
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
but the empirical findings show that situation is somewhat opposite in majority of the
hospitals. The purchasers certainly have other important things as a budget to fit for all
purchases that is a difficult task in itself. However, all this does not convey that the
purchasers are doing a poor job – sometimes they surely have an unthankful role to play
in a purchase process. A supplier seldom directly approaches a purchaser. So, in case a
supplier would say that we have our latest model having X number of functions and Y
image quality, the purchaser would not have sufficient skills to judge the negative and
positive aspects of the equipment. Only the doctors, the medical engineers, and the
nurses can tell that. All this can be explained as the doctors and the medical engineers
having a stronger bond with the suppliers than the purchasers do.
Examination time hold more importance to the doctors than the others since hundreds of
images are acquired from one single examination, and the procedure should be quick in
order to manage a great number of patients per day. This is one of the reasons why
modern technology is greatly emphasised by the doctors and the medical engineers. All
the respondents refer to the multislice technology as modern technology. Latest
equipment in the market is meant to be ahead than the previous in all aspects, especially
in quickness and in acquiring larger number of images per patient and per second. A
factor that seems to have relatively low importance for all the categories is availability
of the equipment. This is peculiar as low availability would result in the machine
standing still for more than expected/calculated period of time, and when a machine is
out of function – factors such as the image quality and modern technology hold no
relevance. However, the authors’ perception of this situation is that availability is a
factor to be provided in any case, without any specific requirement from the customers.
Therefore, it is not emphasised as a driving force.
71
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
7.1.3 Gap 1
Personal needs of the customers v/s The Suppliers’ perceptions of these
Figure 7-2: The personal needs of the customers’ v/s suppliers’ perception of these.
In chapter 6.3, empirical findings presented the driving forces for CT procurement
mentioned by the customers and the suppliers. The factors mentioned by the customers
represent their personal needs. These empirical findings revealed no major differences
concerning the personal needs of the customers and the suppliers’ perceptions of these
(presented in figure 7-2). The differences lie in the level of importance of the driving
factors the customers and the suppliers have in common. The analysis will now
continue with its focus on the first gap of the personal needs of the customers6 and the
suppliers’ perceptions of these.
In the suppliers’ perception modern technology is relatively important and this is in
accordance with the customers’ opinions. Siemens and Philips agree with the customers
while GE does not perceive modern technology as a driving force for purchase of CTequipment. For Siemens and Philips examination time is a very low prime mover in
comparison to the customers. GE is the only supplier agreeing with the customers on the
6
The categories of doctors, medical engineers and purchasers put together from the personal interviews
and the survey investigation.
72
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
importance of examination time being a driving force. When it concerns functionality,
Philips’ perception of the level of importance is in accordance with the customers’
while Siemens has overestimated this factor in comparison to the customers and GE
does not consider functionality to be a driving force in the first place. Philips has
managed to hit the mark regarding the importance of availability. Siemens is not so far
from the customers’ valuation of availability, while GE has overestimated this factor.
To the customers it is a factor to be provided by the supplier irrespective of any
particular requirement – so customers are not as concerned with availability as GE
perceives it. None of the suppliers perceive the radiation dose to be as important as the
customers do. Philips does not emphasise its’ importance at all, Siemens does not think
it is important enough to be considered as a driving factor while GE overestimates it.
Radiation dose is noticed to be a major problem in the X-ray examinations today, where
50 percent of radiation dose comes from CT-examinations. The suppliers express that it
is in the hands of the user to determine the radiation dose, while the customers think that
the companies should work towards reducing it.
GE’s picture of user-friendly equipment being a driving factor is consistent with the
customers’. Philips has overestimated user-friendliness in comparison to the customers
while in the opinion of Siemens it is not a driving force for CT-procurement. However,
Siemens has managed to be consistent with the customers regarding ergonomics while
Philips and GE do not emphasise the ergonomics part as being a driving force. GE has
managed to hit the mark of all the suppliers regarding the importance of image quality –
they know to what extent customers emphasise this factor. Siemens has slightly
overestimated its’ importance while Philips has rated it twice as important as the
customers think. With regard to education and service, none of the suppliers’
perceptions are consistent with the customers’. GE and Siemens overestimate the
importance of these factors while Philips puts a slight emphasis on service and none on
education.
73
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
7.1.4 Gap 2
The customers’ expectations and the suppliers’ perception of these
The customers’ valuation does not follow the traditional concept, that is ”...the better the
quality the higher the price”. The majority of customers consider the suppliers to be
fairly equal in price – the difference lies in what they get for the money, i.e. the quality.
This seems to vary from year to year – if a supplier has kept low prices one year, it
raises them the year after. Although, the customers found it difficult to express any
specific supplier differences, they managed to strain themselves to find some. The major
differences can be seen in table 6 (chapter 6.5) and also illustrated in the figures 7-3 to
7-5 on the next page. These figures are three different examples from three different
where the suppliers are valued fairly equal in price but different in quality. The CTmarket can be considered as an oligopolistic market as no effective price spread has
been found. No supplier wants to be more expensive or cheaper than the other. They all
keep any eye on each other and therefore keep the prices on the same level, as they are
aware of that price can sometimes be a determining factor for CT-procurement.
An interesting aspect of the three different profiles on next page is that the particular
respondents who use Philips consider them to be their favourite supplier – as a result
Philips is graded higher than the competitors (see figure 7.3). The same goes for
Siemens and GE. The customers using CT-equipment from Siemens and GE have
graded these suppliers higher than Philips (see figures 7.4 and 7.5). The authors cannot
generalise this fact on all the customers, as there are exceptions too. It is hard to
determine whether a supplier is graded higher than the competitors merely because the
respondents are using its’ equipment or is it because the respondents really consider the
supplier to be good.
74
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
Three different examples of customers’ valuation of the suppliers:
Figure 7-3: Example 1 – the respondents’ valuation of the suppliers – GE being a winner.
Figure 7-4: Example 2 – the respondents’ valuation of the suppliers – Philips being a winner.
Figure 7-5: Example 3 – the respondents’ valuation of the suppliers – Siemens being a winner.
75
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
The customers certainly expect the suppliers to be very good in all aspects in order to
provide them with the best. But the personal interviews and the survey results reveal
that all suppliers are not excellent in all regards – one or the other is considered to be
better or less good in providing certain things. Differences have been revealed with
regard to the customers’ expectations and the suppliers’ perception of these. From their
past experience, the customers have learnt which supplier is better a provider of certain
things. As a result, they expect the same things from all suppliers but being conscious
about that each supplier will be better in certain areas than the others. It all can be
explained as a result of perceived service. As the empirical findings revealed, some
customers had better experience of GE providing better service than Siemens. It is but
natural that these customers will weigh GE higher if service is one of the driving forces
for procurement.
Figure: 7-6 – The customers’ valuation of the suppliers v/s the suppliers’ perceptions of themselves.
The x marks in the figure represent the suppliers’ perceptions of themselves while the other represent the
customers’ valuation of the suppliers’.
The figure 7-6 above shows a statement of the customers’ valuation of the quality
factors provided by the suppliers versus the price paid for it. Although this is a compiled
figure representing all the customers7 in this study, it is important to emphasise the
tremendous disparity of opinions concerning the favourite supplier. However, figure 7.6
provides a rough estimate of how the market (customers) perceives the suppliers. The
authors believe this figure to be representative and a valid source to make conclusions.
The ‘x‘ marks in figure 7-6 represent the suppliers’ valuation of themselves. As it can
be seen, no supplier has really managed to hit the mark – either they have overestimated
themselves (for example GE and Siemens) or they have underrated themselves (for
example Philips). This indicates that the suppliers find them to better than the
customers’ perceive. If the suppliers’ picture of themselves is what they want the
customers to perceive then they are not succeeding really well. A positive aspect of this
7
Customers from the personal interviews and the survey investigation.
76
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
could be the price level. The suppliers rate themselves more expensive or cheaper than
one another while the customers perceive them to be fairly equal in price. (The figure
7-6 is a reliable source of information as it represents the statistical results of this
study.)
Some customers and suppliers as well faced difficulties in assigning marks to each
supplier relating to each driving factor, although the valuation was meant to be
subjective. These valuation difficulties especially concern Philips because of its’ recent
acquisition with Marconi Medical Systems. It has been hard to value Philips before and
after the acquisition. Only one supplier has mentioned Toshiba that is a competitor reentering the Swedish market of Computed Tomography. It is still uncertain in what way
they will be different from the current suppliers. The question is; will Toshiba be given
a chance to enter the Swedish CT-market with customers already having their
“favourite” supplier(s). It would be rather good with more suppliers to increase the
competition. But it in the hands of the customers to let new suppliers in and give them
with a fair chance. It is the customers that have the power to determine whether or not a
company is successful. It is a difficult practice as the best companies must “walk their
talk” with a dedicated loyalty to customers and employees (the latter being the conduit
to reach customers) – but not all are able to do it.
Both the customers and the suppliers believe that Toshiba may only be able to compete
with better prices, although having a better technology than the existing ones. A
conclusion here could be that the current suppliers are well-established names in the
market; they have reputation, a certain image that people look up to and make
expectations. New suppliers take time to build the trust that the customers seek.
77
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
7.1.5 Gap 3
The expected service v/s received service
The theory emphasises services having certain aspects that are essential to the
equipment and others that are not essential but enhance the service experience (see
chapter 5.3). If the essential factors are present, they are often not even noticed as they
were expected to be there anyway ((2) in table 7). If, however, these factors are absent,
the customer is likely to be upset – in other words, not satisfied ((3) in table 7). Such
experiences are likely to cause reactions, which will influence customers’ subsequent
evaluations of the equipment, the service and the supplier. On the other hand, when
service enhancers are absent, they may not be noticed but if they are present, they will
be – which means giving the customer more than expected ((1) in table 7). The
customers will feel very good about such experiences and will base their evaluation on
the good delivery.
GE
Siemens
Philips
(1) ESRS = 
23%
26%
19%
(2) ES=RS = 
6,5%
7%
10%
(3) ES>RS = 
3%
1,5%
4%
Table 7: The performance rating and best experience of each supplier
ES= Expected service
RS= Received service
Table 7 is a compilation of the customers’ rating of each supplier with regard to the
equipment and services exceeding or falling short of their expectations. Different
customers have rated the suppliers differently. To be more specific, the ratings vary to a
great extent from respondent to respondent and moreover from hospital to hospital. The
results of table 7 represent the customers’ better supplier experiences. It has to be
cleared that some customers have not updated their CT-equipment since 5-7 years.
Therefore some of the customers have not had the opportunity to express their views
about the suppliers other than from which they are purchased their latest equipment.
As earlier mentioned, procurement is a detailed evaluation of numerous factors. But
what are the customer expectations? The empirical findings and the previous analysed
gaps have revealed that there are no major but still significant differences between what
the customers expect (their personal needs) and what the suppliers deliver (suppliers’
perceptions of the customers’ needs). To summarise the previous gaps, the customers’
principal concerns are:
- high image quality to a low radiation dose that gives the required diagnosis;
- short examination time to allow a great deal of examinations per day and quicker
image reproduction;
- the equipment should be user-friendly;
- compromises can be made on the image quality but not the functionality of the
equipment; and
78
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
-
service is an utterly important driving force.
Table 8 is an illustration of the factors that the customers’ expect each supplier to better
in as a result of their past experience. These are the areas the suppliers perceive
themselves to be best in, and also what is promised to the customers (expected service
by the customers) and the delivered service by the suppliers (received service by the
customers). It is but natural that the customer wants the suppliers to be at their best in
everything. But according to the customers, the provided service by each supplier
varies. However, there are differences in what the customers expect and what they
receive. Gap one discussed about these suppliers proving to be better in certain areas in
and less good in other. The results also showed that that the suppliers overrated
themselves in certain areas. As a result, the customers’ expectations are higher than the
level of delivered service. However, this is only valid for certain areas that are
illustrated in table 8. It also shows that higher expectations are set on a certain supplier
in certain areas, while another supplier is expected to perform better in some areas than
the competitors. The grey marked factors are the ones that the delivered as per the
customers’ expectations. The rest is there but not equally satisfying.
Expected service
GE
Siemens
Philips
Received service
(Based on past experience)
Examination time
Image quality
Service
Availability
Radiation dose
User-friendly
Modern technology
Image quality
Ergonomics
Functionality
Service
Modern technology
User-friendliness
Functionality
Modern technology
Education
Service
Availability
Availability
Radiation dose
Ergonomics
Image quality
User-friendliness
Functionality
Table 8: Expected service v/s received service
As the analysis of gap one verifies the statements in table 8, it can assumed that the
suppliers surely emphasise all factors but all are not able to practice them equally good
in the opinion of the customers. As the authors earlier mentioned, the factors that the
most frequently mentioned factors were not the most important ones – this implies of
both the customers and suppliers. Below are some statements that were made with
regard to suppliers falling short of the customers’ expectations.
“ Philps is the world’s best when it comes to the latest technology – but only on paper.
They haven’t been able to provide the market with the required.”
“ The majority of customers are dissatisfied with GE with regard to ergonomics. They
feel that GE does not emphasise on ergonomics.”
79
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
“ The multislice technology used by GE is miserable but they seem to sell in anyway.”
Mostly, companies that share good relations with their customers believe that the
customers are apparently satisfied. But the question of whether or not their customers
are completely satisfied was raised as early as in the background. Because, sometimes
diminished satisfaction with one product can be a good reason to try an alternative, and
it might be difficult to discern whether variety seeking or a desire to increase
satisfaction is the goal. The purchase of medical equipment is a lengthy process and
people such as engineers, technicians, doctors, and nurses are involved in the decisionmaking. It is therefore of great importance for the suppliers to focus on the satisfaction
for a group of members and not only for a person.
80
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
7.2 Customer satisfaction theory v/s The Public Procurement Act
According to Grönroos’ customer satisfaction theory, perceived value determines
customer satisfaction. Satisfied customers may become committed to the supplier or the
service provider because of two reasons. One, they are pleased with the level of
sacrifice involved in the relationship, that is, when price and relationship costs is not too
high. Second, they trust the other party. As purchase within medical health care is
bound by certain regulations, the customers have to act professional and be objective in
their choice of a supplier and its’ equipment. But the results of the gap analysis have
shown that past experience and customer-supplier relations play a vital role in the
purchases performed in the medical health care sector. According to the customer
satisfaction theory, the more committed a customer is to a company and the more bonds
that exist between them, the stronger the relationship will be. Also, in reality, relations
are believed to have an effect on the procurement procedure. Although the customers try
to be objective during procurements because they are bound to the regulations, no one is
able to practice it to the fullest. If the customers have more liking for the
product/equipment of a particular supplier, they will buy from him – which turns the
procedure into a subjective procurement.
In the opinions of the customers, interpersonal chemistry is a significant trait for the
salespeople to have. The way they try to sell and market the product hold great
importance for procurement. There have been incidents when the customers avoided
considering a supplier any further merely because of inappropriate performance and
insufficient competence of the salespeople. However, some of the customers agree to
the fact that relying a decision on good customer-supplier relations or how the offer is
presented may not always result in the best purchase.
In theory, the stronger the relationship is, the longer it will last. Customers do not
always see incentives to stop doing business with the same supplier. At the same time, a
strong relationship can make the customers perceive that fewer alternatives exist, and
this lack of alternatives has a positive effect on the length of a relationship with the
current supplier. This cannot really be implied considering the competition in the CTmarket, as only few suppliers share the competition. The customers are aware of the
existing alternatives but all do not treat them fairly as past experience hold vital
importance.
Customer satisfaction
theory
V/S
The Public Procurement
Act
The
Reality
Figure 7-7: Customer satisfaction theory versus The Public Procurement Act
Figure 7-7 aims to find out where the reality lies between the theory and the regulations.
According to The Public Procurement Act, the customers are bound to follow certain
81
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
regulations and may not favour a particular supplier during procurement, while the
customer satisfaction theory claims that customer-supplier relationships are important to
result in customer satisfaction. The authors would like to separate the customers in two
categories – one category where they strictly follow the regulations and do not believe
in favouritism or relations; the other where relations are given more importance than the
given regulations. The empirical findings show that majority of the customers fall in the
latter category. Below are two figures (figure 7-8 and 7-9) confirming the importance of
customer-supplier relations also how the respondents feel about The PPA. The figures
that only a minority perceive The PPA to be good – higher emphasis is laid on
customer-supplier relations. This is not a good sign out of a regulative perspective – but
this is the reality. As a saying goes – everything is not black or white. There is always a
grey area in which mutual decisions are taken. However, the respondents agree that
some control is essential to keep up the competition and The PPA is a good way of
doing do.
Figure 7-8: Opinions about The PPA
relations
Figure 7-9: The importance of customer-supplier
The customers, especially the purchasers, express that people being impartial is a major
problem during procurement which makes it difficult to make fair judgements since big
supplier names and personal contacts are involved. Mostly, a supplier is compared to
another supplier when the actual judgement should be based on the quality of the
equipment versus the price – which is seldom the case. The customers believe that most
people are interested in doing good business deals and function procurement is the best
deal in an age of rapidly growing technology. Therefore, The PPA should be renewed or
modified to bring harmony between the era we live in today and the possibilities that
should be available in the medical heath care. It would ease the decision-making in
more complex procurements where following the regulations would not be equally
strict. Function procurement gives both the parts to have a ‘dialogue’ or even a
partnership with the suppliers.
The Public Procurement Act can merely be seen as a formality performed by the
customers - mostly procurement procedures are performed in their own ways. Those
who are not well versed with the regulations make mistakes and learn from them. But
those who know the rules also find ways to get round and misuse these sometimes. Here
82
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
is when the customer-supplier relation comes in the picture. If a customer has made
his/her mind for a certain supplier, following the PPA is merely a formality.
The purchasers do not share the same relation to the suppliers as the doctors and the
medical engineers do. It has been noticed that if a purchaser works in the same division
as the doctors and the medical engineers, he/she is closer to the procurement process,
its’ clinical and technical details. He/she is also more influenced by relations to the
suppliers, while a purchaser who works independently has been noticed to have a more
objective view while making a procurement decision, as they do not have the same
closeness to the rest of the staff involved in the procurement. All the same, they cannot
determine what factors are important for the doctors or the medical engineers and hold
poor market knowledge. This also indicates on the lack of their confidence of
determining which company is better than the other in certain aspects. This may depend
on various factors, for instance lack of a deeper understanding or knowledge about the
technicalities of the equipment and its functions.
Anyhow, coming back to the purchasers having a more objective view than the rest may
not always be the most appropriate since customers put great emphasis on customersupplier relations. A purchase decision may not always be successful, when merely
made on the basis of the market information without any consideration to which
supplier or equipment the personnel feel comfortable with. The purchasers come into
the picture during different stages of procurement, differently in different hospitals.
Some are involved right from the beginning to end while others are only called in to
take care of the administrative and regulative formalities. Figure 7-10 is an illustration
of the suppliers’ perception how the purchases performed. The data collected through
personal interviews emphasise that the purchasers are meant to be the main link
between the suppliers and the doctors, medical engineers and nurses etc. But in majority
of the hospitals the purchaser is noticed to be the last person to be informed about the
purchase. When the need of equipment occurs, the doctors and the medical engineers
are the first people to contact the suppliers to find out what the market has to offer.
According to these hospitals, a purchaser is there to make sure all documentation is
accurate and the formalities are taken care of. The doctors and the medical engineers are
closely related to the suppliers.
GE
Doctors
Medical
engineers
Siemens
Doctors
Medical engineers
The
purchas
er
Philips
Doctors
Medical engineers
Figure 7-10: The purchase procedure and the links.
This should be the actual link between the suppliers and the rest of the purchase group.
But the relations are strengthened behind the walls, with the doctors and the medical engineers.
83
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
8 CONCLUSIONS AND DISCUSSION
This chapter presents the conclusions of this study followed by a discussion of these,
where the views of the authors’ are expressed. The conclusions followed by the
discussion are separated in three levels.
(I) The first level presents the most significant, and core conclusions of this thesis. This
level of conclusions covers the answers of the two fundamental research problems that
in order lead to the answer of the main problem of this thesis. (II) The second level
includes the general conclusions of this study. (III) The third and final level covers
some interesting and significant conclusions in the authors’ opinions – conclusions that
are not so strengthened by all the comments of the respondents.
8.1 Conclusions I
Research problem 1a: To the best of the customers’ knowledge – which are the factors behind a
purchase leading to customer satisfaction?

The driving factors have earlier been presented in chapter 5.3, table 2. No major differences are
found with regard to the driving factors mentioned by, the three categories of the customers.
Research problem 1b: To the best of the suppliers’ knowledge – which are the factors behind the
purchase decision of the customers leading to customer satisfaction?
 The driving factors mentioned by the customers are consistent with the suppliers’ to a great extent –
only the degree of importance varies between these (see chapter 5.3, table 2).
Research problem 2: How do the customers perceive the supplier (company) and its products, in
comparison to the competitors?

No major differences are discovered between how the customers value the suppliers, i.e. the
KISSP-grading. However, the “perception” of each supplier varies. Perceptions and experience
vary greatly from customer to customer and each of them has his/her favourite supplier.
Main research problem: To what extent do the companies have a realistic view whether they truly
satisfy their customers?
 The suppliers are perceived to be good in several regards – nobody has proven to reach the level of
Excellency.
 The analysed gaps between the customers and the suppliers are relatively small which indicates that
the suppliers have a fairly good picture of what their customers want even though they are
perceived differently from customer to customer.
 The CT-market is of oligopolistic nature.
84
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
Discussion – Conclusions I
As it has been concluded, no major differences were found with regard to the driving
factors mentioned by, the three categories of customers. The authors believe that the
driving factors mentioned are logical as they cover the basic and the specific
requirements of the CT-equipment. Customer involvement was highly correlated with
specific quality factors and satisfaction. That is, the individual perceptions of the
doctors, medical engineers, the purchasers, and the salespeople in regard to driving
forces, depended upon their degree of involvement in the process, from which some
different results could be revealed. The authors had expected major differences among
the three customer categories, than the outcome has proved to be. But this only conveys
their tremendous teamwork. The authors had also expected that the doctors would only
emphasise the clinical factors, the medical engineers only the technical forces, and the
purchasers mentioning the economical factors. Apart from a few cases, the respondents
proved to have a surprisingly good balance between the clinical, technical and the
economical factors. The authors believe that they have learnt to balance their opinions
and make mutually based decisions after having worked together for years.
The customer and the suppliers can reveal no manifest difference regarding the driving
factors mentioned. However, the views about the their degree of importance varies
among the customers and the suppliers. Positive relationships have consistently been
found between quality perception and customer satisfaction. The analysis revealed that
not all of the ten analysed factors were considered to be prime movers for CT-purchase.
Some factors such as image quality, functionality of the equipment and services were
far more important in comparison to other quality factors. Better providence of these
particular factors indicates a significant prediction of customer satisfaction.
It has been concluded that no major differences were discovered between how the
customers value the suppliers. But the “perception” of each supplier varied to a great
extent from customer to customer. The customers have valued the suppliers relatively
equal in price but not in quality – this is where the differences lie. Whether these
differences are actually there or merely perceived to be there is a question of
interpretation. The authors believe that these differences could be a result of their
preferences of the same as previous supplier or satisfying customer-supplier relations
with the existing supplier. In the analysis, three different figures (figures 7.3-7.5)
illustrated the differences of suppliers being treated equal in price but different in
quality. An interesting aspect of these three different profiles was that respondents using
a particular supplier graded that supplier higher than others. The authors cannot
generalise this fact on all the customers, as there have been exceptions. It is hard to
conclude whether a supplier is graded higher than the competitors merely because of the
user’s preferences of that particular supplier or because the respondents really consider
the supplier to be good.
This leads us further to the discussion of the main problem. That is: To what extent do
the companies have a realistic view whether they truly satisfy their customers?
The analysis revealed that all suppliers are perceived to be good in several regards but
none has proven to reach the level of Excellency in the customers’ opinion. The
analysed gaps reveal relatively small differences, which is an indicator of that the
suppliers have a fairly clear picture of what their customers want. It is hard to generalise
85
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
the perceptions and name the best supplier in opinion of the customers, since
perceptions vary greatly from customer to customer. Though all have their favourites,
none can be considered as an overall winner. Siemens cannot be concluded to be the
best alternative merely because almost 50 percent of the customers use Siemens
equipment (see table 6). Philips cannot be considered to be a less good alternative due
to their earlier uncertainty about the CT-market. The same goes for GE, they cannot be
concluded to be better than other suppliers merely because they sold highest share of
CT-equipment last year.
There is a multitude of factors that these companies compete about. In the authors’ preunderstanding, it was expressed that the CT-market may be an oligopolistic market.
This perception is now clear at the completion of this study. The CT-market can be
considered as an oligopolistic market looking at its’ price situation where no effective
price spread can be found. Only three suppliers control the Swedish CT-market and
account for the total CT-sales. As they have considered being fairly equal in price, the
determining platform of competition is equipment and service quality. The authors
believe that equipment quality in the customers’ eyes is not only the clinical or technical
aspects but also the relationship quality. As earlier mentioned, this could be considered
as a result of the great number of successful customer-supplier relationships with the
current supplier or an instinctive act of favouritism. Both the parts communicate in a
way that leads to satisfaction of these, and helps the further development of
relationships.
Whether or not a supplier has a more realistic view of what the customers want, cannot
be specified. The market of medical health care is hard to define. What is in one year
will be outdated next year. It is of great importance to “keep a check” on the market.
The companies can strengthen the competition by taking advantage of the existing
possibilities and also by finding new markets. Historically, it is hard to determine which
supplier has been the most successful. The difficulty lies in an accurate measure of
success. Looking at the market shares, Siemens has been most successful, but if the
market growth is considered, GE has succeeded the most, while Philips has the best of
modern technology today. The authors believe that these suppliers have been successful
– but in different ways.
86
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
8.2 Conclusions II




A widespread view is that The PPA obstructs the competition and prevents the customers
from choosing the same as previous supplier even though they would like to.
Past experience controls a purchase to great extent. Customer-supplier relationships hold
great importance though all respondents not have been completely open about the fact, since
they feel bound to follow the regulations.
Everybody wants the “best” equipment.
Everybody wants a high image quality to a low radiation dose.
Discussion – Conclusions II
It is natural for some customers to feel that The PPA makes it difficult to be a customer,
as decisions have to be limited within the frames of the regulations – just as when all
cards are put on the table there is no turning back. The authors earlier separated the
customers in two categories – one category where they strictly follow the regulations
and do not believe in favouritism or satisfying relations; the other where relations are
given more importance than the given regulations. The empirical findings reveal that
almost 78 percent of the respondents fall in the latter category (see table 4 in chapter
6.3.5). This is not a good sign out of a regulative perspective – but this is the reality. As
saying goes – everything is not black or white. There is always a grey area in which
mutual decisions are taken. However, most of the respondents agree that some control is
essential to keep up the competition. It is but natural that comparing of brands occurs –
we are all humans after all. As one of the customers mentioned: “ One has to be utterly
disciplined to want a Volvo when offered a Rolls Royce. It is a well-known fact that if
‘The best’ is available, you obviously want it even though it opposes the PPA.”
The authors believe that the customers try being objective during procurements but do
not succeed since past experience and relations weigh higher and the procurement turns
subjective in a deliberately or non-deliberate way. A customer stated during an
interview that: “...only because I am subjective during this very procurement and do not
follow The PPA, the competition will not be effected.” But if every respondent thinks
that way, there will be no competition in the long run. The customers say that it is their
responsibility to keep up the competition on the market. But there is a world of
difference between their statements and actions. The authors believe that the customers
have not fully realised the advantages of The PPA. It could be due to that they do not
purchase CT-equipment as often as the suppliers sell these. In a way, the suppliers have
got used to the regulations and learnt to adjust with these, while the customers still find
it to be troublesome.
It has also been concluded that everybody wants the best equipment, which the authors
feel is obvious considering the rapid development within the world of CT. But
considering that The Swedish Federation of County Councils has a budget to fit all the
purchases, it should be the contrary. The authors’ perception of the situation is that all
the hospitals want to be in the spotlight. Both large and small hospitals want the best
equipment – the larger hospitals want it because they want to pursue research and the
small hospitals want it to attract personnel. It has been noticed that the doctors are more
87
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
eager of wanting the best equipment while the purchasers are concerned about the
budget.
Another one of the conclusions is the increasing radiation doses that are considered to
be a major problem today. Everybody wants a high image quality to a low radiation
dose. But the problem is that no one wants to take the responsibility to work towards
reducing these. According to the customers, the suppliers should work towards reducing
them while the suppliers think it is in the hands of the customers to control these.
8.3 Conclusions III





The customers expect a better quality from GE and Siemens than from Philips.
The purchasers are not as updated as the doctors and the medical engineers in regard to the
market situation.
Function procurement is popular among the respondents.
The customers find the suppliers to be relatively cheap in price as compared to the suppliers’
perception of themselves.
Few competitors obstruct the competition. It can be difficult for new suppliers to enter the
market with customers already having their preferences.
Discussion – Conclusions III
The authors’ believe that the customers expect different things from different suppliers.
This can be a result of their past experience, and what they perceive as good or poor
from each supplier. The customers expect more from GE and Siemens in terms of
quality. There could be multitude of reasons behind these expectations but one that
seems to be natural to the authors is that the customers do not have as much faith in
Philips as in other suppliers. According to the customers, Philips’ equipment did not
live up to the expectations and requirements of the customers. Earlier, Philips was not
sufficiently engaged in CT-business, as they did not believe in the CT-development. A
comeback as a CT-supplier through acquisition with Marconi may prove to be good for
Philips, and gradually help to enter a trust-relationship with the customers.
After this study, the authors have got a different picture of the roles played in the
procurement procedure, and not exactly the procurement procedure is meant to be (see
chapter 4). The authors have noticed that the purchasers do not have the complete
market knowledge, as they should do. The majority of the purchasers are not well
versed with the market conditions, the latest equipment and its clinical or technical
details. The doctors and the medical engineers sometimes perform market analysis
despite of their lack of competence in the area of market surveys. As a result, the
customer-supplier relations are stronger among the doctors, medical engineers, and the
suppliers. During the personal interviews, the purchasers often lacked the confidence
while determining which company was better than the other in certain factors. This may
depend on various factors, for instance lack of a deeper understanding or knowledge
about the technicalities of the equipment and its functions. It may also depend on that
the purchasers have other responsibilities such as to fit the budget on other purchases.
The fact that they are not closely related to the suppliers depends on their degree of
involvement in the purchase procedure.
88
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
Another one of the very interesting conclusions is the new form of procurement popular
among the respondents – Function procurement. The authors agree to the customers’
belief of most people bring interested in doing good business deals and function
procurement is the best deal in an age of rapidly growing technology. Therefore, The
PPA should be renewed or modified to bring harmony between the era we live in today
and the possibilities that should be available in the medical heath care. Both the
customers and the suppliers are eager about function procurement. All the hospitals
consider themselves to perform it but express that the suppliers are not matured enough
to handle it yet, while the suppliers feel the same about the customers. The perception of
the concept itself varies from respondent to respondent. All know what it means but no
one knows how it can be practiced. No one seems to have an accurate perception about
the function procurement as yet. The authors believe that there is a risk in function
procurement turning into “vision” procurement. Instead of the customers expressing
“what they want”, they may end up demanding, “what they would like to have”. The
effects of this vision procurement could be setting the bar of demands higher than what
the suppliers are able to fulfil.
With regard to the new suppliers, the authors believe that chances of new suppliers
entering the CT-market are no so bright with the customers already having their
favourite suppliers. Current suppliers are well-established names in the market; they
have reputation, a certain image that people look up to and make expectations. New
suppliers take time to build the trust that the customers seek. Purchases are more
subjective than objective. It would surely lift up the competition but not as long as the
customers are not willing to act as professionals.
The empirical findings show that the customers value the suppliers less expensive than
the suppliers consider themselves to be. This can be interpreted as an indicator for the
suppliers to raise the price for their equipment and services.
There are few competitors in the market today and it seems to be heading towards even
less than the current. The history has witnessed many mergers where giant companies
purchase the small ones. Small companies having good technology are sometimes a
threat to the big companies, so they are often merged with the big ones and the
technology of the small company is eliminated or enhanced depending on the purpose
of the merger. If the technology is eliminated, the development stops. Philips’ merger
with Marconi has proven to be one of those better, where the CT technology of Marconi
will prove to be a success for Philips.
89
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
8.4 Reflections and concluding comments...
The markets within the medical health care sector are complex in their nature. Some
customers sometimes act merely like customers in markets with intense competition and
switch off to a competitor when an offer that seems better is provided, while some other
base their purchase decisions on past experience and strong customer-supplier relations.
Fair purchase judgements are tough tasks when favourite supplier names and personal
contacts are involved, and when a supplier is compared to the other instead of the
quality of the equipment being compared. All this can be explained in one way – every
human is different from the other, so are his/her needs, perceptions, norms and values.
As it was mentioned in the beginning of the thesis – It is not a question of what you
have, it is a question of what the customers want. It is the customers that have the power
to determine whether or not a company is successful. It is a difficult practice as the best
companies must “walk their talk” with a dedicated loyalty to the customers and not all
are able to do it.
In summary, it should be repeated that there are no substitutes for high quality and good
value, in terms of what is provided to the customers by equipment and service. Altering
products in an insignificant way or creating high expectations in order to create sales are
not long-term alternatives to customer satisfaction. Even though customer satisfaction
may decrease over time, as a customer becomes familiar with the equipment, superior
products will receive higher steady state or long-term ratings satisfaction than inferior
competitors.
The suppliers make the customers believe and expect more than they are able deliver.
The customers are satisfied with “pieces” of the picture that is created in their minds;
they never get the complete picture. Instead of creating higher expectations, the
suppliers should work towards fulfilling the current demands. To always be the best is
not important, what counts is that effective and accurate diagnosis are performed,
irrespective of new or the existing technology.
90
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
9 CRITICAL REVIEW
This chapter presents a critical review of the thesis. There is no perfect investigation –
even though you think you have performed a good study a critical review of your work
is essential. The authors have questioned the used method, the theories/models, the
analysis and the conclusions, and discussed the quality of the thesis.
9.1 Critic towards the chosen method
A combination of a qualitative method and a quantitative method has been used for this
study. The qualitative approach includes interpretations, weighing of values, and
personal opinions of the respondents. As a result, another person performing a similar
could possibly have made different conclusions. The quantitative approach has given
this study its’ statistical characteristics. This certainly does not make the study more
scientific but gives the study more depth. A combination of these two approaches has
provided the thesis with the desired comprehensiveness. An interpretation attempt has
been central for this study, that itself can be considered as source of critic. Interpretation
studies can be criticised for having low reliability. The authors have taken these facts
under consideration and tried to be objective while interpretation and compilation of the
results. Both the personal interviews and the survey were performed in Swedish – which
led to that translations of the data had to be made. The authors have worked towards
minimising the translation flaws by re-reading and comparing both the versions.
The KISSP-method has proved to be really good during personal interviews as the same
pattern of (qualitative and quantitative oriented) questions was used for all respondents.
The answers were meant to be subjective and all respondents tried their best but still
some of the customers found it hard to assign marks to the suppliers. Statements and
citations have constantly been presented in the empirical findings. The authors believe
that the personal interviews with the salespeople may have been affected by their
loyalty to the company.
The method has however proved to be less effective for the survey investigation
performed in this study as valuable information as personal comments was lost. The
personal comments obtained during the personal interviews have been valuable
information for this study. An electronically performed survey normally has low
reliability. The prime reason of choosing this method has been the possibility to reach a
larger population in a short period of time. The answers of the electronically performed
survey reached in time and the procedure has not been as costly as it would have been
with a traditional survey posted to the respondents. The drop out of respondents has not
been as huge as expected. 70 percent of the respondents actively participated in this
survey. In this study, an advantage with eTRM has been that it provided the study with
a representative picture of reality while a deeper understanding was complemented by
the personal interviews. Unfortunately, in this very case, some of the survey
respondents found it difficult if not impossible, to assign marks to the factors as well the
suppliers (in some cases, no variation were found in the answers. All factors and
suppliers were graded as 5 – that is an average rate). A deeper understanding and the
knowledge of the current market trends are required for these kinds of judgments. As it
91
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
was mentioned earlier, the CT-market is under constant change. Many of the survey
respondents have not been involved in any recent procurement. As a result their lack of
knowledge regarding the current market trends is not consistent with those when they
made their latest procurement. The respondents are aware of this fact. Although, they
have their favourite suppliers, it is not considered as the best alternative. A major
drawback of this electronically performed survey and the method used as well was that
the respondents who did not have sufficient skills to make judgements about the
equipment and the suppliers, did not have the choice of saying ’No’ and no other
alternative other than to click in answers until the end. These answers were later sorted
out in order to do justice to the results of the study. Another things that may cause low
reliability are if the respondents have not been concentrated, been under some pressure
and clicked in answers without any enthusiasm just to get the thing done. This could
have affected the results, as the answers may not have given in a way the respondents
actually think or feel about the equipment and the suppliers.
9.2 Critic toward the chosen theories/models
Reputed researchers principally accept the selected theories/models used for this study.
These theories/models have been current for a long time even though critics may have
been raised against these – they are relevant for studies performed even today. The
authors here are talking about the theories/models by Grönroos, Fitzsimmons, Halinen,
Gummesson and Kotler as well. A critic that can be placed towards these
theories/models is that they are “very” American to their nature. The theories/models
are fairly old but to keep up with the current trends, the latest versions have been chosen
– they do differ much from the original version. The authors believe that the market of
radiology diagnostics is a unique one and by selecting different theories/models for
analysis may have resulted in other conclusions. The Public Procurement Act may not
have been the best choice as a model but the authors considered it to be the most
appropriate alternative for this study and it has certainly revealed some interesting and
significant results. Hereby, the authors can confirm the validity of this thesis as what
was set to measured, was done.
9.3 Critic towards the analysis and the conclusions
The authors did not include an important category involved in the procurement
procedure – the nurses. This was merely an act to limit the study. However, the authors
are aware of the nurses’ importance in procurement, as they are one of the final users.
There is a risk that this study could end in different results if the views of the nurses had
been included. As the results reveal, some doctors represent the views of the nurses and
consider user-friendliness to be a priority, while in some cases the doctors expressed
that the user-friendliness of an equipment is not important as the user gradually learn.
Another aspect that can be discussed is the reliability of the conclusions made from the
data. The authors have tried their best to minimise the bias while interpretation and
compilation of the statistical data. Regarding personal interviews, it is hard to state what
was said is actually practiced. Sometimes people say and do different things in different
situations. Since the interviews are a particular kind of situation, you cannot assume that
what a person said during an interview is what that person believes or will say or do in
other situations. But it is a risk that any studies based upon personal interviews have to
take. The authors have spent a great deal of time on interpretation and compilation of
92
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
the data, and the best way to minimise misinterpretations was to present the statements
as direct citations, which reduced the possibility of the authors’ own opinions to effect
the collected data.
As earlier mentioned, some survey respondents clicked in answers only for the sake of
it. Hence, the possibility of that particular quantitative data being non-representative is
there. In this thesis, the authors have emphasised the qualitative data that is more
reliable and secured to interpret and analyse than merely numbers. The authors believe
that conclusions made from these are reliable but cannot be generalised on other
markets or other non-participating customers. The reason being that this study has
shown some significant differences among customers. They all have their preferences
that can only be explained as human nature. To generalise that all customers in other
markets or in the same market but different countries, would react the same or have the
same opinions is hard to state. As every individual gains its frame of reference through
social background, upbringing, education, practical experience etc., and all these factors
affect an individual’s pre-understanding. The choice of subject, the procedure of this
thesis and the conclusions that are eventually made, may naturally have been affected
by the authors’ individual frame of reference.
9.4 Recommendations for further research





It would be interesting to perform a gap analysis (using the original version) to
investigate the gaps within the companies’ service organisations.
Making a market analysis for Toshiba would be another interesting task and analyse
their chances of a successful competition in the Swedish market.
Function procurement has been a hot topic among all the categories of respondents.
As it was earlier mentioned, it can easily turn into ”vision” procurement. It is an
interesting topic for further research not only for procurements in medical health
care but also in other public procurements. A great amount of money is spent on
performing accurate procurements – the money that could be used for other
purposes.
The KISSP-method is a unique and easy method to discover things that many other
personal interviews methods lack of. Interesting results could be revealed with focus
put on other perspectives other than those dealt with in this study. Such as to
discover where and in which hospitals certain suppliers are the leading ones.
Through the KISSP-method, differences could be explored between the salespeople,
the sales manager and the vice director – this could be of great interest to the
companies.
A study of whether or not The Public Procurement Act does justice with the
procurements, and if it can be changed or modified in any way, so that one does not
have to break the rules to be satisfied.
93
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
Table of references
Literature
Aaker, V.K., and Day, G.S., Marketing research, John Wiley & Sons, New YorkChichester, 2001.
Andersson G (1997), Framgång i kommersiell tjänsteverksamhet, Stockholms
universitet, Forskningsrapport nr. 1997:1.
Andersson, H., Vetenskapsteori och metodlära, Studentlitteratur, Lund, 1994.
Alvesson, M., Sköldberg, K., Tolkning och reflektioner, Studentlitteratur, Lund, 1992s.
Andersson, S., Positivim konta hermeneutik, Bokförlage Korpen, 1979.
Bruzelius L H & Skärvad P H (1995), Integrerad organisationslära, Studentlitteratur,
Lund.
Dahmström, K., Från datainsamling till rapport – att göra en statistisk undersökning,
Studentlitteratur, Lund 2000.
Fitzsimmons, J-A. and M-O., Service management, The McGraw-Hill companies INC.,
Singapore, 1998.
Gilje, N.; Grimen, H., Samhällsvetenskapens förutsättningar, Daidalos AB: Göteborg,
1992.
Grönroos, C., Service management and marketing, John Wiley & Sons, LTD., West
Sussex, 2000.
Halinen, A., Relationship marketing in professional services, British Library
Catalouging in Publication Data, London, 1997.
Hartman, J., Vetenskapligt
Studentlitteratur, Lund 1998.
tänkande:
Från
kunskapsteori
till
metod
teori,
Holme, I-D., Solvang, B-K., Forskningsmetodik – om kvalitativa och kvantitativa
metoder, Studentlitteratur, Lund, 1991.
Kinnear C T & Taylor J (1996), Marketing research, McGrew-Hill INC, New York.
Rinehart & Winston.
Kirk, J., and Miller, M.L., Reliability and validity in qualitative research, SAGE
Publications, Beverly Hills, 1986.
Kjellén B & Söderman S (1980), Praktikfallsmetodik, Liber läromedel, Malmö.
Kotler, P., Principles of marketing, Prentice hall Europe, 1999.
94
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
Källström, A., Beslutsstöd, Vasastadens bokbinderi, Göteborg, 1993.
Lundahl, U., and Skärvad, H., Utredningsmetodik för samhällsvetare och ekonomer,
Studentlitteratur, Lund 1992.
Norén L (1995), Tolkande företagsekonomisk forskning, Studentlitteratur, Lund.
Patel R & Davidsson B (1994), Forskningsmetodikens grunder – att planera,
genomföra och rapportera en undersökning, Studentlitteratur, Lund.
Patton, M.Q., Qualitative evaluation and research methods, Newbury Park, Calif,
SAGE Publications, London, 1990.
Patton, M.Q., How to use qualitative methods in evaluation, SAGE Publications,
London, 1991.
Pindyck. R-S., Rubinfeld D-L; Microeconomics, Prentice Hall International, Inc., New
Jersey, 1992.
Silverman, D., Qualitative research: theory, method and practice, SAGE Publications,
London, 1997.
Strömqvist S (1998), Uppsatshandboken, Hallgren & Fallgren Studieförlag AB,
Uppsala.
Svensson, P-G., Starrin, B., Kvalitativa studier i teori och praktik, Studentlitteratur,
Lund, 1996.
Taylor, S-J., Bodgan, R., Introduction to qualitative research method, John Wiley &
Sons, INC., (Library of congress Catalouging-in-Publication data), 1997 (1949)???
Takahashi, S., Illustrated computed tomography, 1983
Jacobsson, B. Medicin och teknik, Studentlitteratur, Lund 1987.
Wiedersheim, P-F., Eriksson, L-T., Att utreda, forska och rapportera, Liber, Malmö,
1994.
Research articles
Bolton, Ruth & Lemon, Katherine. “A Dynamic Model of Customer’s Usage of
Services: Usage as an Antecedant and Consequence of Satisfaction” Journal of
Marketing Research, vol. 36, May 1999, p. 173.
Giese, J-L., Cote, J-A., ”Defining customer satisfaction”, Academy of marketing science
review [Online] 00 (01), 2000.
Hirschman, A.O., “Exit, voice and loyalty” Cambridge, MA: Harvard University Press.
95
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
Kotler, P., (2000). Marketing Management. New Jersey: Prentice-Hall, Inc., p. 36.
Stank, Theodore. “Voice of the Customer: the Impact on Customer Satisfaction”
International Journal of Purchasing and Materials Management, Fall 1997, p. 2.
McQuitty, Shaun, Adam Finn, James B. Wiley. 2000. "Systematically Varying
Consumer Satisfaction and its Implications for Product Choice" Academy of Marketing
Science Review [Online] 00 (10)
Available: http://www.amsreview.org/amsrev/theory/mcquitty10-00.html
Macquitty, S.,Finn, A., Wiley, J-b., ”Systematically varying consumer satisfaction and
its implications for product choice”, Academy of marketing science review [Online] 00
(10), 2000.
MaCallum, R.J.Harrison, W. (1985)., “Interdependence in the service encounter. The
service encounter: managing employee/customer interaction in service businesses.”
Lexington, MA: Lexington 35-48.
Oliver, R., & Desarbo, W. S. (1988). “Responde determinants in satisfaction
judgements.” Journal of conumer research 14 (March): 495-507.
Wackman, D.B., et al., ”Developing an adversitising agency – client relationship”
Journal of advertising research 26, 6: 21-8.
Other published studies
Estay, D., et al., Y-China, Södertörns högskola, Stockholm, 2001.
Mårding, Å., Utvecklingens dilemma, Södertörns högskola, Stockholm, 2001.
Online sources
www.siemens.com
www.ge.com
www.philips.com
www.nou.se
www.euroinfo.se 2002-04-11
www.lf.se
http://www.sos.se/SOSE/NT, 2002-01-19
www.riksdagen.se, (SFS 1997:1068), 2002-04-09
www.chamber.se, 2002-04-03
(SFS 1992:1528), www.riksdagen.se, 2002-04-11
96
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
www.riksdagen.se, (SFS 1992:1528), 2002-04-11
www.riksdagen.se, (SFS 1992:1528), 2002-04-11
www.siemens.se, 2002-02-20
www.philips.se, 2002-03-09
www.gemedicalsystems.com, 2002-03-11
http://rescomp.stanford.edu/~cheshire/EinsteinQuotes.html
(http://hometown.aol.com/csmsurvey/how.html).
www.umsl.edu
http://www.siemens.com/Daten/Event/2001/11/30/MED_Praesentation01_11_21.pdf
VAL tec Group, 2000, http://www.valtec.com/dissatisfaction_with_satisfactio.htm
http://www.rsna.org/REG/learnres/medstudent/whatisradiology.html 2002-01-31
http://www.nobel.se/medicine/laureates/1979/press.html, 2002-01-31
www.rpgroup.org/Publications/ConfProceedings-WorkshopPapers/
2000/03-Hom-Customer-Satisfaction-Models.pdf
Personal (KISSP) interviews sources
The customers:
Södertälje hospital:
Respondent, 2002-03-04
Huddinge university hospital:
Respondent, 2002-03-05
Respondent, 2002-03-07
Respondent, 2002-03-21
Karolinska hospital:
Respondent, 2002-03-18
Respondent, 2002-03-18
Respondent, 2002-04-10
Uppsala acedemic hospital:
Respondent, 2002-03-19
Respondent, 2002-04-22
Respondent, 2002-04-22
Visby lasarett:
Respondent, 2002-04-15
Respondent, 2002-04-15
Respondent, 2002-04-15
97
38th-conf-may-
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
Norrtälje hospital:
Respondent, 2002-04-25
The suppliers:
GE Medical Systems:
Respondent, 2002-03-21
Siemens Medical Solutions
Respondent, 2002-03-13
Respondent, 2002-04-18
Philips Medical Systems:
Respondent, 2002-03-20
Respondent, 2002-04-09
98
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
Appendix 1 – The questionnaire for the survey
Är dessa faktorer eller kriterium det mest viktiga vid köp av en datortomograf?
Saknas någon/några faktor(er)? [Ja/nej svar]
Vilka faktorer tycker du saknas?
Hur viktigt tycker du varje faktor är (fördela 100 poäng)? Den allra viktigaste faktorn
skall
ha högst poäng.
Hur viktiga är dessa faktorer ”tillsammans” i förhållande till priset?
(fördela 100 poäng – t.ex.50-50)
Vi har kartlagt de ledande leverantörerna av datortomografer:
-General Electric
-Siemens
-Philips Marconi
Saknas det någon/några leverantör(er)? [Ja/nej svar]
Vilka leverantörer tycker du saknas?
Hur värderar du MODERN TEKNIK på de olika leverantörernas datortomografer?
Hur värderar du FUNKTONALITET på de olika leverantörernas datortomografer?
Hur värderar du ANVÄNDARVÄNLIGHET på de olika leverantörernas
datortomografer?
Hur värderar du ERGONOMI på de olika leverantörernas datortomografer?
Hur värderar du SERVICE på de olika leverantörernas datortomografer?
Hur värderar du BILDKVALITET på de olika leverantörernas datortomografer?
Hur värderar du UTBILDNING på de olika leverantörernas datortomografer?
Hur värderar du UNDERSÖKNINGSTID på de olika leverantörernas datortomografer?
Hur värderar du TILLGÄNGLIGHET på de olika leverantörernas datortomografer?
Hur värderar du STRÅLBELASTNING på de olika leverantörernas datortomografer?
Nu äntligen, vad anser Du KOSTNADEN är för var och en de angivna leverantörerna?
Igen använder vi skalan 1 till 10. Ett högt pris, det vill säga en dyr leverantör ger Du 10,
9, 8 eller 7, medan en leverantör som du uppfattar som billig indexeras med 4, 3, 2 eller
1.
99
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
Kom ihåg att snitten i branschen även här är 5.
Hur tycker du konkurrenterna ligger i PRIS i förhållande till varandra?
Vilken/vilka av dessa leverantörer som har nämnts har du bäst erfarenhet av?
(Välj alternativ och tryck på Svara.)
100
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
Appendix 2 – The letter sent to the survey respondents
Hej,
Vi är två studenter på Södertörns högskola, Stockholm. Vi har varit i kontakt med Er
per telefon för drygt två veckor sedan angående en studie som vi gör om ”Upphandling
av datortomografer”. Studien handlar om de drivande faktorer som ligger bakom inköp
av en datortomograf; tekniska, kliniska osv. Detta är även en jämförande studie av de
leverantörer som finns på marknaden idag.
Eftersom vi genomför en landstäckande studie är vi mycket tacksamma om ni tar Er tid
och svarar på denna enkät. Undersökningen är av subjektiv natur, och vänder sig till
verksamhetschefer, RTG-läkare, MT-tekniker, ingenjörer och inköpare.
Nedanstående länk innehåller en enkel enkät som skickas ut till alla samverkande i
denna studie. Vi önskar svar så snabbt som möjligt – senast 2002-04-26.
https://www.quicksearch.se/sp/e_trm_care/pop2.asp?pw=5516661
Om Ni inte kommer åt länken genom att klicka på denne, var god kopiera och klistra in
länken i addressfältet på en websida (Internet Explorer eller Netscape Navigator).
Om det fortfarande uppstår något problem, var god ring 35 100 330 för hjälp.
Vi kommer att presentera denna studie i början av juni och bjuder då in alla som
medverkat i undersökningen. Då är Ni alla välkomna till Södertörns högskola för att
lyssna på resultatet. En inbjudan kommer att skickas till samtliga via e-post så snart det
blir aktuellt.
Ett stort Tack för Er medverkan!
Med vänliga Hälsningar,
Anjali Kaur
Lilian Rivera
101
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
Appendix 3 - The driving factors behind the purchase
The following factors were mentioned in the interviews and the authors chose to go
ahead with the ten most frequent factors (grey marked factors).
Driving factors
Frequency of each factor
Service
Education
Image quality
Ergonomics
User-friendly
Radiation dose
Availability
Functionality
Examination time
Modern technology
Customer-supplier relations
Working environment
Diagnostic needs
Equipment compatibility/integrity
Environment
Clinical applications
Delivery time
Installation time
Earlier experience
Attract personnel
References
High process accuracy
Communication standards
Technical contraction
Resolution
X-ray tube
Cut size
Working station + software
Perfusion technology
Image reproduction time
Company evaluation
Upgrading possibilities
Security
Research
18
14
12
12
11
9
8
8
8
7
5
4
4
3
3
3
3
3
2
2
2
2
2
2
2
2
2
1
1
1
1
1
1
1
102
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
Appendix 4 – Standardisation of the ten most frequent factors
Factors
Standardised definition
Modern
technology:
The latest technology that effectively and quickly presents diagnosis,
reconstructs images on an advanced level. For instance, Multi-slice
technology.
Image quality:
A ‘good’ image quality depends on what diagnosis you want, it normally
means catching all the minor details. A good contrast with low roar and
true CT-values. The image quality is interdependent with the radiation
dose – the higher the radiation dose, the better image quality.
Functionality:
Functionality covers for instance, image quality, short examination time,
short reconstruction time and ergonomics. Functionality also means that
the equipment should fulfil the required clinical applications. It should
accomplish the types of diagnosis that are required of a CT-examination.
Userfriendliness:
User-friendliness includes the easiness of use and the intuitiveness
(perceived by the mind immediately without reasoning) of the equipment.
Ergonomics:
Ergonomics includes general settings and environmental factors such as a
vertically adjustable platform and correct lighting. Menus that are not too
complicated to learn preferred to facilitate for the personnel.
Service:
Service includes preventive maintenance and reparations. ’Good’ service
means that when a problem occurs, the supplier should send technicians
to take action accordingly. The customer should receive help as soon as
possible. A service contract is prearranged at the time of purchase of the
equipment. A regular maintenance (twice a year) is included in this
contract. It means that the equipment is cleaned from all dust, and all the
parameters and settings are controlled to make sure everything is in
order.
Education:
An education package is included at the time of purchase. This education
is to provide the medical technicians with the technical applications to
perform the basic reparations (education period is approximately 3
weeks); the doctors and nurses with the clinical aspects (educational
period is approximately 1 week).
Examination
time:
It is important to reduce the examination time to the minimum in order to
acquire more images and the reconstruction of the images should also be
quick. The examination time include the period from when the picture is
taken and till it is reconstructed. For instance, the multi-slice technology
provides this facility of acquiring a great number of images in a short
time.
103
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
Availability:
Radiation dose:
Availability is a technical term for how long a year the machinery has to
run. A normal rate of availability is 90%-98%. The machinery shall not
stand than maximum 2% a year.
The radiation does is required to obtain a better image quality. The more
radiation does the better image quality. Radiation is a patient risk; it
increases with the number of pictures (normally up to 5000 pictures per
patient). Therefore, it is in the hands of the users to determine and
regulate the amount of radiation dose, given to the patient.
104
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
Appendix 5 – The not so frequently mentioned factors
These are the factors not so frequently mentioned by the respondents, thus they were not
included in the survey. But they do have a vital importance for this study as they were
considered as driving factors by some of the respondents. Some of these factors may
sound similliar to each other but the authors decided to keep them apart as some of the
respondents did not find them to be the same.
Working Environment: Environment is an important factor since the regular users
should feel comfortable using equipment they have to deal with all day.
“The working environment is more important than the environment” (X-ray doctor)
Clinical applications: The apparatus should be able to accomplish the required task
that is to give the desired diagnosis.
“Clinical application should be a support on a national and an international level.”
(Medical engg.)
Diagnostic needs: The technology is under rapid development. Thus, it is essential to
follow the development in order to perform the desired examinations.
Customer-supplier relations: “The contributions of the salesperson add more to the
customer-supplier relationship. The personal relation between the company and the
customer is a vital part of the process. Since the price and the product are similar as the
competitors, the relationship becomes the competitive factor.” (The salesperson)
Attract personnel: “Some small hospitals purchase equipment such as CT-apparatus to
attract doctors and engineers, since these want to work with in an environment with the
latest technology.” (The salesperson)
Environment: It is the factor included in the hospital policy but surprisingly, it has not
been mentioned much by the respondents. Different respondents perceived and assess
this factor differently. Some talked about the clinical environment, some about the
ecological environment that includes the nature resources, that the apparatus may not
contain certain materials, such as chemicals; while some mentioned the working
environment.
High process accuracy: It means that high accuracy has to be there in the machinery in
process.
Equipment compatibility: A vital factor is compatibility of the product/equipment
with rest of the equipment. As regards a CT-apparatus, it means that a certain fabricate
is chosen since one similar is already in use, it facilitates the usage of similar menus and
working stations.
Image reproduction time: This includes both the examination time and the image
reproduction time. It should be very short since hundreds of pictures of one single
patient have to be reproduced.
Communications standards: “A CT-apparatus should follow the communications
standards such as DICOM, RIS and PACS.” (Medical engg.)
Working station and software: The software helps with functions such as threedimensional images.
Perfusion technology: It is a new examination technique for the brain. It examines the
oxygenization. It is not so popular today but is expected to gain more importance with
years.
Resolution: It includes geometric and spatial resolution. It means that the density is
diverse.
Cut-size: “It shows the structure of the defects and should be within a range of 0.75
mm-1mm.” (Medical engg.)
105
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
Delivery time: The time of delivery of a CT-apparatus is mutually decided by the
customer and the supplier.
Installation time: The installation occurs when the CT-apparatus is installed at a
certain hospital. It includes the technical formalities and should not take too long.
X-ray-tube: It is a part of the CT-machinery.
106
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
Appendix 6 – Questions added to the KISSP-interview method for
personal interviews
Do you think that The Public Procurement Act eases relieves the procedure or is it
difficult to fulfil a procurement, with both parts satisfied, while following the
regulations?
The purpose of asking this particular question was to find out the opinions of the
respondents about the regulation of PPA. As the customer satisfaction theory says,
customer-supplier relations are important to build customer satisfaction. The authors
then decided to include this question to see what respondents have to say about the
importance of customer-supplier relation versus PPA.
Do you think that the customer-supplier relations effect the procurement?
The purpose of asking this particular question was to find out the opinions of the
respondents about the effect of customer-supplier relationship on the procurement. As
the customer satisfaction theory says, customer-supplier relations are important to build
customer satisfaction. The authors then decided to include this question to see what
respondents have to say about the importance of customer-supplier relation versus PPA.
As there are only few suppliers in the CT-market, how does it effect the
competition? Do you think they keep an eye on each other do they co-operate?
107
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
Appendix 7 - The survey results
The results below represent 79 percent of the customers of all those to whom the survey
was sent to.
Är dessa faktorer eller kriteria de mest
viktiga vid köp av en datortomograf?
-Modern teknik -Funktionalitet -Bildkvalitet
-Användarvänlighet -Ergonomi -Service Utbildning -Undersökningstid Tillgänglighet -Strålbelastning
Ja
90% (38)
Nej
10% (4)
Hur vikitgt tycker du varje faktor är (fördela 100 poäng)?
Den allra viktigaste faktorn skall ha högst poäng.
Modern
teknik
Funktionalitet
Bildkvalitet
Användarvänlighet
8
20
8
20
Unde
Tillgä StrålErgon Servi Utbild rsökng- belast
omi ce
ning
nings
lighet ning
tid
2
8
20
6
4
4
10
8
12
10
12
16
6
4
10
4
14
14
10
6
10
6
8
14
14
26
10
8
6
8
6
6
10
4
8
24
8
6
10
6
4
18
4
14
10
12
12
10
12
8
8
8
12
18
14
6
10
4
8
18
10
10
10
10
10
10
10
10
10
38
10
10
4
2
6
6
16
4
8
14
10
10
10
10
10
10
10
16
10
14
8
8
10
8
8
10
10
8
10
8
8
14
6
10
14
12
8
14
12
6
12
8
8
8
14
10
10
10
8
8
10
12
8
4
12
12
12
10
12
10
6
12
10
8
16
6
8
12
10
8
14
10
14
10
12
12
8
8
12
10
108
12
14
6
12
10
2
10
4
8
8
12
12
10
10
8
4
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
14
2
24
6
4
14
4
8
16
18
6
10
10
10
10
10
6
10
10
20
15
25
5
5
5
5
5
10
10
10
10
10
10
10
10
10
8
14
14
8
10
10
10
8
8
10
10
10
10
10
10
8
12
10
8
8
12
12
12
12
10
10
8
6
14
10
14
14
8
8
8
10
8
8
10
14
10
10
8
8
12
10
16
10
22
6
6
6
8
10
10
16
10
12
10
10
4
6
12
8
10
14
10
10
10
8
8
10
8
18
22
10
6
6
6
8
8
12
10
14
10
8
10
10
6
10
6
10
16
12
8
10
6
6
10
14
6
14
10
12
14
8
6
8
Vi har kartlagt de ledande leverantörerna
av datortomografer.
-General Electric
-Siemens
-Philips Marconi
Saknas det någon/några leverantör(er)?
Ja
28% (10)
Nej
72% (26)
General Electric (teknik)
1
Under medel
0% (0)
2
0% (0)
3
0% (0)
4
6% (2)
5
Medel
37% (13)
109
8
10
5
10
10
10
8
8
12
6
10
12
8
10
16
8
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
6
20% (7)
7
14% (5)
8
14% (5)
9
9% (3)
10
Över medel
0% (0)
Siemens (teknik)
1
Under medel
0% (0)
2
0% (0)
3
0% (0)
4
6% (2)
5
Medel
31% (11)
6
14% (5)
7
11% (4)
8
22% (8)
9
11% (4)
10
Över medel
6% (2)
Philips Marconi (teknik)
1
Under medel
0% (0)
2
0% (0)
3
0% (0)
4
6% (2)
5
Medel
42% (15)
6
14% (5)
7
11% (4)
8
11% (4)
9
14% (5)
110
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
10
Över medel
3% (1)
General Electric (Funktionalitet)
1
Under medel
0% (0)
2
0% (0)
3
0% (0)
4
3% (1)
5
Medel
53% (19)
6
11% (4)
7
11% (4)
8
14% (5)
9
8% (3)
10
Över medel
0% (0)
Siemens (Funktionalitet)
1
Under medel
0% (0)
2
0% (0)
3
3% (1)
4
8% (3)
5
Medel
39% (14)
6
8% (3)
7
25% (9)
8
11% (4)
9
6% (2)
10
Över medel
0% (0)
Philips Marconi (Funktionalitet)
1
Under medel
0% (0)
111
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
2
0% (0)
3
0% (0)
4
0% (0)
5
Medel
42% (15)
6
17% (6)
7
25% (9)
8
8% (3)
9
6% (2)
10
Över medel
3% (1)
General Electric (anvandarvanlighet)
1
Under medel
0% (0)
2
0% (0)
3
0% (0)
4
0% (0)
5
Medel
54% (19)
6
11% (4)
7
9% (3)
8
17% (6)
9
6% (2)
10
Över medel
3% (1)
Siemens (anvandarvanlighet)
1
Under medel
0% (0)
2
3% (1)
3
3% (1)
4
0% (0)
5
Medel
42% (15)
112
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
6
19% (7)
7
22% (8)
8
8% (3)
9
3% (1)
10
Över medel
0% (0)
Philips Marconi (anvandarvanlighet)
1
Under medel
0% (0)
2
0% (0)
3
0% (0)
4
3% (1)
5
Medel
44% (16)
6
14% (5)
7
19% (7)
8
14% (5)
9
3% (1)
10
Över medel
3% (1)
General Electric (pris)
1
Under medel
0% (0)
2
0% (0)
3
6% (2)
4
9% (3)
5
Medel
54% (19)
6
17% (6)
7
11% (4)
8
0% (0)
9
3% (1)
113
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
10
Över medel
0% (0)
Siemens (pris)
1
Under medel
0% (0)
2
3% (1)
3
3% (1)
4
3% (1)
5
Medel
54% (19)
6
17% (6)
7
9% (3)
8
9% (3)
9
3% (1)
10
Över medel
0% (0)
Philips Marconi (pris)
1
Under medel
0% (0)
2
0% (0)
3
0% (0)
4
6% (2)
5
Medel
66% (23)
6
14% (5)
7
9% (3)
8
3% (1)
9
3% (1)
10
Över medel
0% (0)
Vilken/vilka av dessa leverantörer som har
nämnts har du bäst erfarenhet av?
General Electric
Siemens
26% (9)
57% (20)
114
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
Philips Marconi
17% (6)
Vilka faktorer tycker du saknas?
Life cycle cost - LCC.
ekonomi uppgraderbarhet
-Vilka leverantörer tycker du saknas?
tex Toshiba
Toshiba
Alla andra som har representation i Europa och som har en bra
serviceorganisation.
ToshScan AB Stenhuggarvägen 1 Saltsjö-Boo
Hitachi Picker
Toshiba
Toshiba
Toshiba
Toshiba
Picker
Hur viktiga är dessa faktorer ”tillsammans” i förhållande till
priset? (fördela 100 poäng – t.ex.50-50)
Faktorer
Pris
25
75
60
60
60
70
35
60
50
55
50
50
60
40
40
40
30
65
40
50
45
50
50
40
115
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
60
60
75
70
60
60
50
60
60
50
50
60
70
50
70
65
75
50
65
70
60
60
65
60
40
40
25
30
40
40
50
40
40
50
50
40
30
50
30
35
25
50
35
30
40
40
35
40
General Electric (ergonomi)
1
Under medel
0% (0)
2
0% (0)
116
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
3
3% (1)
4
0% (0)
5
Medel
66% (23)
6
6% (2)
7
11% (4)
8
11% (4)
9
3% (1)
10
Över medel
0% (0)
Siemens (ergonomi)
1
Under medel
0% (0)
2
0% (0)
3
0% (0)
4
3% (1)
5
Medel
58% (21)
6
17% (6)
7
11% (4)
8
11% (4)
9
0% (0)
10
Över medel
0% (0)
Philips Marconi (ergonomi)
1
Under medel
0% (0)
2
0% (0)
3
0% (0)
4
3% (1)
5
Medel
64% (23)
117
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
6
11% (4)
7
14% (5)
8
3% (1)
9
6% (2)
10
Över medel
0% (0)
General Electric (service)
1
Under medel
0% (0)
2
0% (0)
3
0% (0)
4
9% (3)
5
Medel
43% (15)
6
20% (7)
7
6% (2)
8
9% (3)
9
11% (4)
10
Över medel
3% (1)
Siemens (service)
1
Under medel
0% (0)
2
0% (0)
3
3% (1)
4
3% (1)
5
Medel
47% (17)
6
11% (4)
7
19% (7)
8
8% (3)
9
8% (3)
118
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
10
Över medel
0% (0)
Philips Marconi (service)
1
Under medel
0% (0)
2
0% (0)
3
3% (1)
4
6% (2)
5
Medel
50% (18)
6
14% (5)
7
17% (6)
8
8% (3)
9
3% (1)
10
Över medel
0% (0)
General Electric (bildkvalitet)
1
Under medel
0% (0)
2
0% (0)
3
0% (0)
4
0% (0)
5
Medel
60% (21)
6
6% (2)
7
11% (4)
8
20% (7)
9
3% (1)
10
Över medel
0% (0)
Siemens (bildkvalitet)
1
Under medel
0% (0)
2
0% (0)
119
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
3
0% (0)
4
8% (3)
5
Medel
53% (19)
6
6% (2)
7
14% (5)
8
17% (6)
9
0% (0)
10
Över medel
3% (1)
Philips Marconi (bildkvalitet)
1
Under medel
0% (0)
2
0% (0)
3
0% (0)
4
3% (1)
5
Medel
56% (20)
6
8% (3)
7
19% (7)
8
8% (3)
9
6% (2)
10
Över medel
0% (0)
General Electric (Utbildning)
1
Under medel
0% (0)
2
0% (0)
3
0% (0)
4
0% (0)
5
Medel
69% (24)
6
6% (2)
120
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
7
17% (6)
8
0% (0)
9
6% (2)
10
Över medel
3% (1)
Siemens (Utbildning)
1
Under medel
0% (0)
2
0% (0)
3
0% (0)
4
3% (1)
5
Medel
69% (25)
6
6% (2)
7
11% (4)
8
0% (0)
9
11% (4)
10
Över medel
0% (0)
Philips Marconi (Utbildning)
1
Under medel
0% (0)
2
0% (0)
3
0% (0)
4
6% (2)
5
Medel
67% (24)
6
6% (2)
7
17% (6)
8
0% (0)
9
6% (2)
10
Över medel
0% (0)
121
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
General Electric (undersokningstid)
1
Under medel
0% (0)
2
0% (0)
3
0% (0)
4
0% (0)
5
Medel
63% (22)
6
3% (1)
7
20% (7)
8
6% (2)
9
6% (2)
10
Över medel
3% (1)
Siemens (undersokningstid)
1
Under medel
0% (0)
2
0% (0)
3
3% (1)
4
0% (0)
5
Medel
61% (22)
6
3% (1)
7
17% (6)
8
6% (2)
9
8% (3)
10
Över medel
3% (1)
Philips Marconi (undersokningstid)
1
Under medel
0% (0)
2
0% (0)
3
0% (0)
122
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
4
0% (0)
5
Medel
64% (23)
6
3% (1)
7
19% (7)
8
6% (2)
9
6% (2)
10
Över medel
3% (1)
General Electric (tillganglighet)
1
Under medel
0% (0)
2
0% (0)
3
0% (0)
4
0% (0)
5
Medel
54% (19)
6
6% (2)
7
9% (3)
8
17% (6)
9
14% (5)
10
Över medel
0% (0)
Siemens (tillganglighet)
1
Under medel
3% (1)
2
0% (0)
3
0% (0)
4
0% (0)
5
Medel
53% (19)
6
17% (6)
7
6% (2)
123
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
8
17% (6)
9
6% (2)
10
Över medel
0% (0)
Philips Marconi (tillganglighet)
1
Under medel
0% (0)
2
0% (0)
3
0% (0)
4
3% (1)
5
Medel
58% (21)
6
8% (3)
7
6% (2)
8
17% (6)
9
8% (3)
10
Över medel
0% (0)
General Electric (Stralbelastning)
1
Under medel
0% (0)
2
0% (0)
3
0% (0)
4
9% (3)
5
Medel
71% (25)
6
3% (1)
7
6% (2)
8
9% (3)
9
3% (1)
10
Över medel
0% (0)
Siemens (Stralbelastning)
124
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
1
Under medel
0% (0)
2
0% (0)
3
0% (0)
4
3% (1)
5
Medel
78% (28)
6
0% (0)
7
8% (3)
8
8% (3)
9
3% (1)
10
Över medel
0% (0)
Philips Marconi (Stralbelastning)
1
Under medel
0% (0)
2
0% (0)
3
0% (0)
4
6% (2)
5
Medel
78% (28)
6
0% (0)
7
6% (2)
8
11% (4)
9
0% (0)
10
Över medel
0% (0)
125
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
Appendix 8 – Radiology Diagnostics
What is radiology?
Simply put, diagnostic radiology is the study of images of the human body. During the
first half of the 20th century, the field of radiology was limited to the use of x-rays to
expose film and view the interior of the body without surgery. The view of the human
anatomy was actually a picture of the shadows of parts of a patient that absorbed or
blocked the x-rays. Today, this simple technique, referred to as "plain radiography," is
still being used. (http://www.rsna.org, 2002-01-31)
The most essential components of an X-ray system are: a source of beam and an
image, where the beam intensity is registered on an x-ray film, see figure 4-1.
Picture plane
Object
Source of beam
Figure 1: The most essential components of an X-ray system. (Jacobsson, 1998:357)
A peculiarity of figure 1 is that it is two-dimensional. During reproduction of the
picture, the dimension of the depth is lost, which results in that the overall picture of the
lungs, for example, is a composite one in which all the details in the path of the rays are
overlapped. In order to acquire any depth perception, the frontal exposures must be
complemented with lateral exposures. (http://www.nobel.se, 2002-01-31)
From analogue to digital
Major advances in radiology in recent years can be attributed to the change from
analogue to digital imaging and to advances in electronics and computing. Digital
imaging today include modalities such as ultrasound, computed tomography, magnetic
resonance imaging and nuclear medicine, but have been displayed in analogue format
(ie, film) for easy manipulation with conventional radiographs. However, digital
screening units and scanning of conventional films (computed radiography) are now
accepted technologies, with resolution similar to that of film/screen techniques.
Digitisation itself is a critical advance, as it allows manipulation of the images.
Digital images can be transferred within a hospital's network as part of a picturearchiving and communication system (PACS), or examined from remote locations via
telecommunication networks (teleradiology), which obviates the need to physically
126
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
transport films to a reporting location and better enables distance radiology services for
outlying communities. Radiology still uses techniques similar to those discovered by
Roentgen in 1895. Film is exposed, developed, coded and placed in packets, reported,
and then stored for review. With PACS, a clinician (or many clinicians simultaneously)
can review the images as soon as they have been processed, and consultation between
physicians can take place without physical meetings. The PACS connects to the
Radiology Information System (RIS) and the Hospital Information System (HIS),
avoiding multiple entering of patient data and allowing planning for patient bookings.
Future PAC systems will be able to track patient progress via the RIS and HIS and preemptively fetch images from the electronic archive to the appropriate clinical
workstations for outpatient lists or operative lists.
Differences between analogue and digital x-ray
Analogue
Digital
Detector = Film
Detector = e.g. picture plane
Display = Monitor
Display = Monitor
Storage = Film
Storage = Digital medium
Computed tomography
Computed tomography has had a revolutionary impact in the history of diagnostic
medicine. The word “Tomography” derives its origin from the Greek word “tomos”,
which means cross section. The CT technique is used for imaging cross sections of an
object using a series of X-ray measurements taken from different angles around the
object. Computer assisted tomography (CT-scanning) is a method developed in the
1970s. Dr. Godfrey Hounsfield in England developed the first prototype of a CT
apparatus in the 1960´s. In 1979, Dr. Godfrey Hounsfield was announced as the noble
price winner in medicine, for this very achievement. Ever since, new developments
have led to faster scanning, better dose usage, and improved image quality.The precise
techniques have changed considerably since then and so has the name given to it. (At
present it is generally known as ‘CT scanning’.) The CT scan is a digital image
produced by the computer from a large number of direct transmission measurements at
different angles through the patient. The computer reconstructs the image and displays it
on a screen.
Four generations of CT-scanners
The main features of a CT scanner are:
1. high-power x-ray tube and generator
2. gantry and couch
3. detector array.
In the first generation of CT scanners, only a single radiation detector was used that
passed through the object and resulted in a one-dimensional picture. The total number
of measurements for a full scan of 180 was 180 x 160, since 160 measurements were
made in each rotation. This required an exposure time of 5 minutes. Since this scan time
was too long for parts of the trunk where there is movement of the lungs and heart, new
machines were developed with scan times of about 20 seconds using a fan beam of xrays and an array of detectors. These were the CT scanners of the second generation.
They were a step ahead the previous generations’, a higher number of detectors were
used to reduce the unnecessary rotations, which also reduced the examination time to
127
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
about 20 seconds. (Takahashi, 1983:25) A further shortening of the time to 5 seconds
was achieved by making the detector array wide enough so that the fan beam could
extend across the body and making the rotation movement unnecessary; these scanners
were known as the ‘third generation’. In the fourth generation of scanner the detectors
form a complete circle around the patient, who remains stationary, while the x-ray tubes
rotates. This allows scan times down to 1 second. The very fast scan time allows
dynamic scanning to take place, so that movement of the heart may be visualised. The
latest development in the world of computed tomography is the multislice technology.
The method/procedure
Numerous methods of picture reconstruction based on different mathematical principals
e.g. matrix inversion, iterative processes and back projection, have been developed
through the years.
A CT-picture is a three-step process:
 Data collection;
 Data processing; and
 Reconstruction.
The main difference between a CT-picture and a conventional X-ray picture is that the
final CT-picture is worked out with the data gathered from different projections of the
object. This means that the patience is projected from different angles and calculations
are made of the transmitted radiation.
In data collection the necessary data of the object is collected through X-ray from
different angles. In data processing, the collected data is processed in a computer and is
based on a digital technique. There are several ways of recreating a picture from the CTprojections that are made.
Radiation direction
Object
Projection
Figure -2: Projection of the object. The projection is equivalent with the object with
regard to the thickness. (Akahashi, Shinji, “Illustrated Computer Tomography”.
1983:18)
Figure 2 shows how the projections reflect the investigated object and the projection
shows the amount of radiation absorbed by the investigated object. Combining all the
projections, the picture is put together, which is equivalent to the appearance of the
object. The projections are based on analogous data and have to be transformed, in order
to be processed with a computer. The transformation is made in an A/D (Analogue
/Digital) transformation.
Reconstruction: the processed data is once again transformed into an analogue form in
order to be presented on a screen. One of the advantages with the CT is that it gives the
128
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
radiologist an opportunity to influence the result at a later stage after the examination,
which helps to interpret the picture easily. (Matula & Sandin, 1998)
A summarization of the complete process
In figure 3, a summarised version of the complete picture process is presented. The
figure also shows the possibilities of storing the digital pictures, which can be done with
a system called PACS (Picture Archive and Communication).
Data collection
Analogue to digital
transformation
Data processing
Network for data
communication
Digital to analogue
transformation
Picture archive
Presentation
Figure-3: The digital picture processing. (Matula & Sandin, 1998, Seeram, 1994:15)
From Single-slice to Multislice technology
Multislice spiral CT increases the diagnostic efficacy over single-slice spiral CT for all
clinical applications. When Siemens introduced the spiral CT in 1988, it greatly
increased the speed of CT data acquisition by imaging continuously during patient
transport through the scanner gantry. Faster data acquisition allowed faster
administration of contrast media, which dramatically improved contrast enhancement.
Large volumes of data could be acquired during a breath-hold, which reduced
misregistration of artefacts, and overlapping slice reconstruction could be performed
without increasing patient dose, thus improving the quality of the images. In addition,
three-dimensional image reconstruction became practical with faster data acquisition,
and patient throughput increased.
The next major advance in CT came in 1992. Elscint’s multislice spiral scanner was
designed with two parallel arcs of detectors, capable of acquiring two slices of spatial
information simultaneously in both the axial and spiral scanning modes.
(http://www.casema.net). In spiral scanning this doubled the speed of data acquisition
compared to single-slice spiral CT scanners. The increased speed could be traded, if
desired, for improved longitudinal resolution, increased volume of coverage, or
improved image quality (decreased image noise). The evolution of multislice spiral CT
continued in late 1998, when several manufacturers unveiled scanners capable of
obtaining four slices simultaneously. These quad-slice scanners acquire four times more
data per revolution than single-slice spiral scanners, and some have gantries that spin at
129
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
two revolutions per second (twice the speed of most single-slice scanners), making them
eight times faster than most single-slice scanners.
Combined examinations of the chest, abdomen, and pelvis are frequently used in a
variety of indications, including evaluation of patients with trauma, infection, and
cancer. Multislice spiral CT is ideally suited to quickly imaging a large volume of
interest with thin slices during the limited temporal window for optimal contrast
enhancement. The total-body CT scan may become a reality with multislice spiral
technology. Multislice spiral CT is ideal for this application and produces excellent
studies, such as liver evaluations in patients with hepatitis C.
130
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
Appendix 9 – The original gap analysis approach
The Gap analysis model
Source: Grönroos (2000) and Fitzsimmons (2000)
The gap analysis model is intended to be used for analysing sources of quality problems
and to help managers understand how service quality can be improved the model is
illustrated in Fig 5.1.
CONSUMER
Word of mouth
communications
Personal needs
Past experience
Expected service
Gap 5
Perceived service
MARKETER
Gap 1
Service delivery
(including pre- and
post-contacts)
Gap 4
External
communications
to consumers
Gap 3
Translation of
perceptions into service
quality specs.
Gap 2
Management
perceptions of
consumer expectations
Figure 9.1 The gap analysis approach (Grönroos, 2000:101)
Primarily, this model demonstrates how service quality emerges. The upper part of the
model includes customer-related phenomena, while the lower part shows phenomena
related to the service provider.
The service experienced, which in this model is called the perceived service, on the
other hand, is the outcome of a series of internal decisions and activities. Management
perceptions of customer expectations guide decisions about service quality
specifications to be allowed by the organisation, when service delivery (the execution of
the service process), takes place. The customer, of course, experiences the service
delivery and production process as a process-related quality component, and the
technical solution received by the process as an outcome-related quality component. As
is illustrated, marketing communication can be expected to influence the perceived
131
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
service this basic structure demonstrates the steps that have to be considered when
analysing and planning service quality. Possible sources of quality problems can then be
detected. In figure 5.1 five discrepancies between the various elements of the basic
structure, so called quality gaps, are illustrated. These quality gaps are the result of
inconsistencies in the quality management process. The ultimate gap, that is, the gap
between expected and perceived (experienced) service (Gap 5), is, of course, a function
of the other gaps that may have occurred in the process. The five gaps, their
consequences, and the reasons why they occur are discussed below.
The management perception gap (Gap 1)
This gap means that the management perceives the quality inaccurately. This gap can
occur due to:
 inaccurate information from market research and demand analysis;
 inaccurately interpreted information about expectations;
 non-existent demand analysis;
 bad or non-existent upward information from the firm’s interface with its customers
to management; and
 too many organisational layers which stop or change the pieces of information that
may flow upward from those involved in customer contacts.
The quality specification gap (Gap 2)
This gap means that service quality specifications are not consistent with management
perceptions of the quality expectations. This gap is a result of:
 planning mistakes or insufficient planning procedures;
 bad management of planning;
 lack of clear goal-setting in the organization; and
 insufficient support for planning for service quality or top management.
The service delivery gap (Gap 3)
This gap means that quality specifications are not met by performance in the service
production and delivery process. This gap is due to:
 specifications which are too complicated and / or too rigid;
 employees not agreeing with the specifications and therefore not fulfilling them;
 specifications not being in the line with the existing corporate culture;
 bad management of service operations;
 lacking or insufficient internal marketing; and
 technology and systems not facilitating performance to specifications.
The market communication gap (Gap 4)
This gap means that promises given by the market communications activities are not
consistent with the service delivered. This gap is due to:
 market communications planning not being integrated with service delivery;
 lacking or insufficient coordination between traditional external marketing and
operations;
 the organisation falling to perform according to specifications, whereas market
communication campaigns follow these specifications; and
 an inherent propensity to exaggerate and, thus, promise too much.
132
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
The perceived service quality gap (Gap 5)
This gap means that the perceived or experienced service is not consistent with the
expected service. This gap results in:
 negatively confirmed quality (bad quality) and a quality problem;
 bad word of mouth;
 a negative impact on corporate or local image; and
 lost business.
Dimensions of service quality
For services, the assessment of quality is made during the service delivery process,
which usually occurs, with an encounter between a customer and a service contact
person. Customer satisfaction with service quality can be defined by comparing
perceptions of the service received with expectations of the service desired. When
expectations are exceeded, service is perceived to be of exceptional quality – and also to
be a pleasant surprise. When expectations are not met, however, the service quality is
deemed unacceptable. When expectations are confirmed by perceived service, quality is
satisfactory. As figure 9-2 shows, these expectations are based on several sources,
including word of mouth, personal needs, and past experience.
Word of
mouth
Dimensions of
Service Quality
Reliability
Responsiveness
Assurance
Empathy
Tangibles
Personal
needs
Expected
service
Perceived
service
Past
experience
Perceived Service Quality
1. Expectations exceeded
ESPS (Quality surprise) 
2. Expectations met
ES˜PS (Satisfactory quality):-I
3. Expectations not met
ES>PS (Unacceptable quality)
Figure 9-2: Perceived service quality
Dimensions of Service Quality
The dimensions of service quality as shown in the figure 9-2, were identified by
marketing researchers studying several different service categories: appliance repair,
retail banking, long-distance telephone service, securities brokerage, and credit card
companies. They identified five principal dimensions that customers use to judge
service quality – reliability, responsiveness, assurance, empathy, and tangibles, which
are listed in order of declining relative importance to customers. (Fitzsimmons,
1997:270)

Reliability: The ability to perform the promised services both dependably and
accurately. Reliable service performance is a customer expectation and means that
the service is accomplished on time, in the same manner, and without errors every
time.
133
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics




Responsiveness: The willingness to help customers and to provide prompt service.
Keeping customers waiting, particularly for no apparent reason, creates unnecessary
negative perceptions of quality. If a service failure occurs, the ability to recover
quickly and with professionalism can create positive perceptions of quality. For
example, serving complimentary drinks on a delayed flight can turn a potentially
poor customer experience into one that is remembered favourably.
Assurance: The knowledge and courtesy of employees as well as their ability to
convey trust and confidence. The assurance dimension includes the following
features: competence to perform the service, politeness and respect for the customer,
effective communication with the customer, and the general attitude that the server
has the customer’s best interest at heart.
Empathy: The provision of caring, individualised attention to customers. Empathy
includes the following features: approachability, sensitivity, and effort to understand
the customer’s needs. One example of empathy is the ability of an airline gate
attendant to make a customer’s missed connection the attendant’s own problem and
find a solution.
Tangibles: The appearance of physical facilities, equipment, personnel, and
communication materials. The condition of the physical surroundings (e.g.,
cleanliness) is tangible evidence of the care and attention to details that are exhibited
by the service provider. This assessment dimension also can extend to the conduct
of other customers in the service (e.g., a noisy guest in the next room at a hotel).
(Ibid)
Customers use these five dimensions to form their judgements of service quality, which
are based on a comparison between expected and perceived service. The gap between
expected and perceived service is a measure of service quality; satisfaction is either
negative or positive.
134
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
Appendix 10 – The statistical results of personal interviews
The calculations below are made on the basis of the statistical data obtained from the
personal interviews.
The driving factors
GE
Siemens
Philips
(valuation of each supplier on
a scale of 1-10 )
1 – 4 (below average (BA))
5 (average (A))
6 – 10 (above average (AA))
Modern technology
Functionality
User-friendly
Ergonomics
Service
Image quality
Education
Examination time
Availability
Radiation dose
Approximate average value
BA A
AA
BA
A
AA
BA
A
AA
0%
0%
6%
13%
3%
5%
0%
0%
0%
0%
3%
25%
16,5%
23,5%
14%
18%
14%
29%
28%
33%
27%
23%
0%
0%
0%
0%
6%
5%
4%
0%
0%
0%
1,5%
0%
17%
11,5%
4%
9%
9,5%
5%
6%
0%
6,5%
7%
37,5%
17%
18%
34%
18%
19%
24%
28%
33%
27%
26%
12,5%
0%
0%
0%
6%
5%
5%
0%
0%
6,5%
4%
0%
16,5%
17,5%
10%
12%
9,5%
14%
0%
17%
6,5%
10%
25%
16,5%
17,5%
21%
16%
19%
14%
33%
17%
20%
19%
0%
16,5%
6,%
4%
12%
14%
5%
5%
0%
6,5%
6,5%
Price v/s quality
Relative importance of
quality: 75,7%
Relative importance of price:
24,3%
Price valuation of each
supplier on a scale of 1-10
1 – 4 (below average)
5 (average)
6 – 10 (very expensive)
0%
45%
55%
0%
55%
45%
135
0%
45%
55%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
Appendix 11 – A list of the survey respondents
Hospitals
Piteå älvdals sjukhus
Sunderby sjukhus
Kallix sjukhus
Gällivare sjukhus
Kiruna sjukhus
Lycksele lasarett
Skellefteå lasarett
Norrlands universitetssjukhus
Östersunds sjukhus
Sundsvalls sjukhus
Härnösands sjukhus
Sollefteå sjukhus
Örnsköldsviks sjukhus
Avesta lasarett
Borlänge sjukhus
Falu lasarett
Ludvika lasarett
Mora lasarett
Länssjukhuset Gävle-Sandviken
Hälsinglands sjukhus
Centralsjukhuset i Karlstad
Sjukhuset i Arvika
Sjukhuset i Säffle
Sjukhuset i Torsby
Sjukhuset i Kristinehamn
Universitetssjukhuset Örebro
Karlskoga lasarett
Lindesberg lasarett
Centrallasarettet i Västmanland
Bergslagssjukhuset
Köpings lasarett
Sala lasarett
Uppsala Akademiska sjukhuset
Lasarettet i Enköping
Östhammars sjukhuset
Norrtälje sjukhus
Alingsås lasarett
Frölunda specialistsjukhus
Kungälvs sjukhus
Dalslands sjukhus
Lysekils sjukhus
Norra Älvsborgs länssjukhus
Strömstads sjukhus
Uddevalla sjukhus
136
A Comparative Case Study of The Three Giants in The Market of Radiology Diagnostics
Drottning Silvias- Barn- och ungdomssjukhus*/SU Östra
Sahlgrenska Universites-sjukhus/ Sahlgrenska
Sahlgrenska Universites-sjukhus/ Mölndal
Sahlgrenska Universites-sjukhus/ Östra
Sjukhuset i Falköping
Kärnsjukhuset i Skövde
Sjukhuset i Linköping
Sjukhuset i Mariestad
Borås
Skene
Lundby sjukhus AB
Länssjukhuset Ryhov
Höglandssjukhuset Eksjö/Nässjö
Värnamo sjukhus
Kullbergska sjukhuset
Nyköpings lasarett
Kungsbacka sjukhus
Länssjukhuset Halmstad
Sjukhuset i Varberg
Sjukhuset i Varberg
Lasarett Ljungby
Blekingesjukhuset
Västerviks sjukhus
Oskarshamns sjukhus
Länssjukhuset i Kalmar
Visby lasarett
Helsingsborgs lasarett
Sjukhuset i Hässleholm
Centralsjukhuset i Kristianstad
Landskrona lasarett
Universitetssjukhus i Lund
Universitetssjukhus MAS
Närsjukvården Österlen AB Sjukhuset i Simirishamn
Lasarett Trelleborg
Lasarett Ystad
Ängelholms sjukhus AB
137