HCBE Faculty Articles

Title

Theranos - A Case Study on Customer Value and Technology

Document Type

Article

Date

2016

Publication Title

Journal of Marketing Perspectives

Volume

1

Issue

September

First Page

6

Last Page

22

Description

Many companies have been created out of brilliance and rose to the top of what was once considered an impossible mountain. Many people doubted Bill Gates when he dropped out of Harvard to start Microsoft. Yet, he built his computer software firm into the industry standard and created a global business empire. Elizabeth Holmes, CEO and Founder of Theranos seems to be walking a very similar path. The only difference is she is revolutionizing a multibillion dollar system that has been in place for decades.

Theranos is a consumer healthcare technology company that is changing the way the diagnostic-lab industry performs blood tests. The name Theranos is derived from combining the words therapy and diagnostic. What this company has done is invent a way to perform blood tests using as little as a single drop of blood. Not only can they do this with a tiny finger prick, but it also costs up to 90% less than current methods of blood testing. Currently in America, the diagnostic-lab industry performs nearly ten billion tests annually and is estimated to be a $73 billion industry.

Due to an increase in consumers wanting greater access to their personal data, Theranos’ rise comes at the perfect time. Smartphones, nowadays, can send information to people’s doctors anywhere from the number of steps they take each day, to their heart rate and sleep cycles. Holmes was quoted saying “My own life’s work in building Theranos is to redefine the paradigm of diagnosis away from one in which people have to be present with a symptom in order to get access to information about their bodies to on in which every person, no matter how much money they have or where they live, has access to actionable health information at the time it matters.” (Auletta, 2014) Using a customer value framework, this paper delves into exactly what this company is, who built it and where it is headed.

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