T here are two manifestations of supply chains in health care. One involves the supply of equipment and materials used in health care delivery. The other supply chain involves the delivery of health care itself, wherein patients supply their physical conditions and service suppliers deliver health care services. This article considers the latter supply chain, analyzing a case study in which patients have comorbidities and thus require the services of a network of multiple health care providers. In the case study, we examine three schemes for coordination of care. In the first scheme, the patient herself is expected to manage the coordination. In the second scheme, physicians are expected to coordinate the care. In the third scheme, a third-party coordinator manages care across network members. We examine these three possible coordination alternatives using a technique known as Process-Chain-Network (PCN) Analysis. PCN Analysis helps us document how coordination schemes are implemented and where they may fail. Our analysis of the case study leads us to the development of ex post theory about who should initiate coordination and how it should take place under conditions of comorbidities. Empirical data coming from the case study support the theory. We describe possible applications of the theory inside and outside of health care, and show how the PCN approach can guide process innovation.

Based on the examination of 239 ''best products'' (all those on Business Week's annual lists from the past decade), this article tests and validates a conceptual framework identifying six ways in which new products open new markets and/or encroach on original products. Three of these six scenarios involve high-end encroachment (the new product first opens a new high-end market, or enters at the high end of an existing market, and then diffuses down-market), and three scenarios involve low-end encroachment (encroachment starts at the low end, followed by diffusion upmarket). As illustrated in a 2 Â 3 matrix, high-end encroachment ensues when the new product enhances performance with regard to the market's core attribute (low-end encroachment ensues when this performance is diminished). The three high-end sub-types and three low-end sub-types are determined by the strength of performance along an ancillary attribute dimension. If the ancillary attribute performance is week, then the encroachment of the new product on the old market is immediate (corresponding to immediate high-end encroachment and immediate low-end encroachment, respectively). If the ancillary performance is moderate, then the new product expands the market at the high or low end (corresponding to new-attribute high-end encroachment and fringe-market low-end encroachment, respectively). If the ancillary performance is strong, then the new product first opens an entirely new market at the high or low end (corresponding to new-market high-end encroachment and detached-market low-end encroachment, respectively). The reliability and comprehensiveness of the encroachment framework is tested by asking a panel of eight judges to categorize each of the 239 products. Results show inter-judge reliability of 98%, with all products falling within one of the six encroachment categories. Each of the encroachment types has unique implications on product positioning and pricing, as further discussed in the paper. Thus the model helps firms identify and analyze the various possible strategies that they might choose from when introducing new products.

Previous research describes two key ways in which a new product may encroach on an existing market. In high‐end encroachment, the new product first sells to high‐end customers and then diffuses down‐market; in low‐end encroachment, the new product enters at the low end and encroaches up‐market. This paper focuses on high‐end encroachment, which can further be broken down into three subtypes, which are called the immediate, the new‐attribute, and the new‐market forms of high‐end encroachment. This paper makes three key contributions. First, it provides a sound theoretical underpinning for the three distinct subtypes of high‐end encroachment—a linear reservation price curve model (LRPCM) is used to establish this theoretical foundation. Second, this paper delineates and illustrates four different ways the high‐end new‐market diffusion process may progress over time. These four are: (1) the traditional type, where the new product diffuses relatively slowly and methodically over time; (2) the fad scenario, where the new product opens a new market but then fizzles out after a relatively short period of high sales; (3) the rapid diffusion outcome, where the new product opens a new market and then rapidly diffuses down‐market; and (4) the prolonged‐niche type, where the new product purposefully restricts itself to its own niche rather than diffusing down‐market. The third key contribution of this paper is to offer managerial insights into the new‐market high‐end encroachment process by discussing two short case studies; namely, a retrospective look at the introduction of the iPhone, and a prospective look at Tesla's challenges in growing the market for its electric car. With regard to the iPhone, it helps explain why Apple precipitously dropped the price of the iPhone by one third only 68 days after its introduction. With regard to Tesla, it discusses how Tesla must leverage the revenues that stem from its current high‐end pricing power. Tesla must be able to progress down the learning curve fast enough so that it can create a virtuous cycle; a cycle in which cost reductions and technology improvements lead to price reductions and increased sales, which in turn lead to further cost reductions. At the conclusion of the paper, a step‐by‐step approach is offered to aid in determining which type of encroachment should be pursued and in determining how the encroachment pattern will eventually develop. The encroachment framework and the step‐by‐step approach are intended to help managers better assess and mitigate the risks inherent with a new product introduction.