UNIVERSITY OF VAASA 

 

FACULTY OF TECHNOLOGY 

 

COMMUNICATIONS AND SYSTEMS ENGINEERING 

 

 

 

 

Mahmoud Elsanhoury 

 

 

BUSINESS INVESTIGATION STUDY FOR THE NORDIC TELEMEDICINE 

CENTER USING BUSINESS MODEL CANVAS AND MONTE CARLO 

SIMULATION 

 

 

 

 

 

 

 

 

Master’s thesis for the degree of Master of Science in Technology submitted for 

inspection, Vaasa, 18 May 2018. 

 

 

Supervisor Professor Timo Mantere 

Instructors  

 

Reino Virrankoski 

Shaima Abdelmageed 

  





3 

TABLE OF CONTENTS                    page 

 

LIST OF TABLES 8 

ABSTRACT 9 

1. INTRODUCTION 10 

2. EHEALTH AND TELEMEDICINE 12 

2.1 eHealth 12 

2.1.1 Definition and Concept 12 

2.1.2 eHealth Evolution 12 

2.1.3 eHealth Advantages 14 

2.2 Telehealth 15 

2.2.1 Definition and Concept 15 

2.2.2 Telehealth in Nordic Countries 16 

2.3 Telemedicine 19 

2.3.1 Definition and Concept 19 

2.3.2 International Adoption 19 

2.3.3 Telemedicine in Nordic Countries 20 

3. BUSINESS MODEL DESIGN 21 

3.1. Types of Business Models 21 

3.2. Role of Business Model in Telemedicine 22 

3.3. Business Model Framework 25 

3.4. Popular Business Models 28 

3.4.1. Brokerage Model 28 

3.4.2. Advertising Model 28 

3.4.3. Infomediary Model 28 

3.4.4. Merchant Model 29 

3.4.5. Affiliate Model 29 

3.4.6. Community Model 29 

3.4.7. Subscription Model 29 

3.5. Business Idea 29 



4 

3.6. Business Plan 30 

3.6.1. Elements of a Business Plan 30 

3.7. The Osterwalder Business Model Canvas 32 

3.7.1. Customer Segments 33 

3.7.2. Value Proposition 35 

3.7.3. Channels 39 

3.7.4. Customer Relationships 40 

3.7.5. Revenue Streams 43 

3.7.6. Key Resources 46 

3.7.7. Key Activities 48 

3.7.8. Key Partnerships 50 

3.7.9. Cost Structure 51 

4. BUILDING NTC BUSINESS MODEL CANVAS 54 

4.1. Customer Segments 54 

4.1.1. Academia 55 

4.1.2. Healthcare Professionals 56 

4.1.3. Enterprises 59 

4.1.4. Municipalities 60 

4.1.5. Civil Society (Mass Market) 61 

4.2. Value Propositions 64 

4.2.1. Education and Awareness 64 

4.2.2. Providing Telemedical Solutions 64 

4.2.3. Guidance and Consultancy 65 

4.2.4. Facilitation and Catalyzing Innovation 65 

4.2.5. NTC Value Proposition Characteristics 65 

4.3. Channels 67 

4.3.1. Channels per Customer Segment 68 

4.3.2. Channel Phases 70 

4.4. Customer Relationships 73 

4.4.1. Relationships per Customer Segment 73 

4.5. Revenue Streams 76 



5 

4.5.1. Expected Revenues per Segment 76 

4.6. Key Resources 78 

4.6.1. Physical Resources 79 

4.6.2. Intellectual Resources 80 

4.6.3. Human Resources 88 

4.7. Key Activities 92 

4.7.1. NTC Services 92 

4.7.2. NTC Project Activities 95 

4.8. Key Partnerships 103 

4.8.1. Strategic Partnerships 104 

4.8.2. Joint Ventures 104 

4.8.3. Buyer-Supplier 105 

4.9. Cost Structure 105 

4.9.1. Proposed Cost Structure 105 

5. MONTE CARLO SIMULATION 114 

5.1. Definition 114 

5.2. Methodology 114 

5.3. Advantages 115 

5.4. Approach to Obtain NTC Business Model Insights 115 

5.5. Simulation Code Flowchart 116 

5.6. Simulation Input Data 117 

5.7. MATLAB Code Template 118 

5.8. Findings 119 

5.8.1. Customers’ Interest in NTC Services 119 

5.8.2. Extending NTC Operation to Other Nordic Countries 122 

5.8.3. Covering NTC Costs 124 

6. CONCLUSIONS AND FUTURE WORK 127 

7. LIST OF REFERENCES 129 

 



6 

LIST OF FIGURES 

 

Figure 1. Relation between eHealth and telemedicine 12 

Figure 2. Dimensions of business response of consumer value proposition 13 

Figure 3. The Norwegian Telehealth reference architecture 18 

Figure 4. Integrating the four healthcare organization requirements 24 

Figure 5. The proposed business model for chronic care management 26 

Figure 6. Types of business models according to the type of business 28 

Figure 7. The elements of a business plan 32 

Figure 8. Business model Canvas by Alexander Osterwalder 33 

Figure 9. Customer segment building block 34 

Figure 10. Value proposition building block 36 

Figure 11. Channels building block 39 

Figure 12. Channel classification 40 

Figure 13. Customer relationship building block 41 

Figure 14. Revenue streams building block 43 

Figure 15. Key resources building block 47 

Figure 16. Key activities building block 49 

Figure 17. Key partnerships building block 50 

Figure 18. South Ostrobothnia and West Bothnia population age groups 62 

Figure 19. Seinäjoki showroom in Mediwest, EPTEK facility 80 

Figure 20. Showrooms in Umeå University and Umeå University Hospital 80 

Figure 21. Bed monitoring system at Seinäjoki physical node 81 

Figure 22. Various GPS tracking devices in Seinäjoki showroom 82 

Figure 23. Digital door locks in Seinäjoki showroom 82 

Figure 24. Various safety phones (base stations) in Seinäjoki showroom 83 

Figure 25. Various door alarm devices in Nordic telemedicine Center, Seinäjoki 84 

Figure 26. Daily life devices in Seinäjoki physical node 85 

Figure 27. Memoera trainer in Seinäjoki showroom 86 

Figure 28. Haltija Calendar in Nordic telemedicine Center, Seinäjoki 86 

Figure 29. Pill dispenser device 87 

Figure 30. Other devices in Seinäjoki physical node 88 



7 

Figure 31. Emergency support for birth complication 96 

Figure 32. Hand rehabilitation via video conferencing system 97 

Figure 33. Examining ultrasound images of children with suspected heart conditions via 

secure web portal 98 

Figure 34. Remote writing interpretation via webcam 99 

Figure 35. Sarcoma round 100 

Figure 36. Self-measurement device for blood pressure 101 

Figure 37. Screenshot of KINESIS evaluation tool 102 

Figure 38. Balance test using Balansera application 103 

Figure 39. The SWOT analysis structure 108 

Figure 40. Monte Carlo simulation flowchart 116 

Figure 41. Academia customers interest in NTC services 120 

Figure 42. Feasibility study for adding drone rescuing service for elderly lost people and 

emergency unit for childbirth complication 121 

Figure 43. Likelihood of NTC operation extension to Norway versus workload 123 

Figure 44. Covering NTC costs versus price ranges and amount of leads required 125 

 

  



8 

LIST OF TABLES 

Table 1. National healthcare authorities in Nordic countries 16 

Table 2. Building blocks of each focus area of the telemedicine business model 27 

Table 3. Channel phases and channel types 40 

Table 4. Fixed and dynamic pricing 46 

Table 5. Academia statistics in South Ostrobothnia County, Finland 55 

Table 6. Academia statistics in West Bothnia County, Sweden 56 

Table 7. Healthcare professional statistics in South Ostrobothnia, Finland 57 

Table 8. healthcare professionals statistics in West Bothnia, Sweden 58 

Table 9. Enterprises statistics in South Ostrobothnia and West Bothnia 59 

Table 10. Age structures of South Ostrobothnia and West Bothnia populations 61 

Table 11. Expected NTC channels for each customer segment 70 

Table 12. NTC proposed customer relationships for each customer segment 75 

Table 13. Expected revenue streams per customer segment 78 

Table 14. NTC key resources classification 79 

Table 15. Recommended NTC Human Resources structure 89 

Table 16. Salary estimates based on qualifications 106 

Table 17. Expected Staff salaries per each NTC node 106 

Table 18. Calculated expected minimum and maximum cost structure per each NTC node 

versus workloads 107 

Table 19. SWOT analysis summary for NTC business model 113 

Table 20. Real and assumed statistics required for performing the simulation 117 

Table 21. Monte Carlo MATLAB main code template 119 

 

  



9 

UNIVERSITY OF VAASA  

Faculty of Technology  

Author: Mahmoud Essam Elsanhoury 

Topic of the Thesis: Business Investigation Study for the Nordic 

Telemedicine Center using Business Model 

Canvas and Monte Carlo Simulation 

Supervisor: Professor Timo Mantere 

Degree: Master of Science in Technology 

Degree Program: Degree Programme in Communications and 

Systems Engineering 

Major of Subject: Communications and Systems Engineering 

Year of Entering the University: 2015 

Year of Completing the Thesis: 2018 Pages: 131 

ABSTRACT: The eHealth industry has caught huge attention during the last decade 

especially in Nordic countries. The concept of telemedicine is becoming an 

essential factor in the healthcare sector owing to its advantageous edges that made 

remote diagnosis and monitoring become more viable. Such role that brought 

numerous patients’ cases within the reach of healthcare professionals, facilitated 

the continuous monitoring of their vital signs and kept records of their previous 

health history for better treatments. However, telemedicine projects –as any other 

type of projects– should possess a preliminary feasibility plan described in 

business terms to speculate the likelihood of failure or success based on the 

resources and the value proposition. Various worldwide approaches have been 

conducted in many countries to provide the suitable business frames for the 

telemedicine business model. One of the main objectives of the Nordic 

telemedicine Center (NTC) project is to establish a running center that operates 

and sustains itself even after the project period is concluded thus, a feasible 

business model is required. In this thesis, an approach is designed upon the 

business model Canvas structure. The proposed canvas is based on the Nordic 

telemedicine Center project’s resources and objectives. Nevertheless, the output 

canvas is assigned with a conducted Monte Carlo simulation to obtain some 

business insights relying on both real and assumed input data. 

 

KEYWORDS: business model Canvas, eHealth, Monte Carlo Simulation, Nordic 

Countries, telemedicine. 



10 

1. INTRODUCTION 

As stated by (Peters, Kromat and Leimeister 2015): “Service has grown into an important 

field for research in information systems, as information technology (IT) is currently 

revolutionizing the way services are delivered. Many services hereby not only play a key 

role for societal advancements but become necessary”. This statement summarizes recent 

technologies’ scope and where are they heading. The clear destination is bounded by the 

basic “Information Theory” as it already was since the earliest stages of humanity.  

 

Telemedicine not only considered a welfare aspect but also became a necessity in many 

cases. With the aid of IT evolution, telemedicine became applicable in remote places and 

difficult conditions. Moreover, regarding that point, (Wang, Lin and Chiang 2014) stated 

that: “With the advancement in information and telecommunication technologies, 

Telehomecare can surmount obstacles in space and time and exchange clinical 

information between patients and experts, which fulfill the patients’ needs of the aged 

society”.  

 

However, according to (Kao, et al., 2012): “Continued advances in science and 

technology and general improvements in environmental and social conditions have 

increased life expectancy around the world. As a result, the world’s population is aging”. 

Statistics show that, in certain regions in the Nordic countries there are approximately 

25% of the population are exceeding 65 years old. This large percentage sheds more 

responsibility on governments to prepare suitable precautions and arrangements for 

providing maximum care to this age group. (Statistics Finland 2017) 

 

Consequently, telemedicine implementation evolves from a ‘concept’ to be a completely 

stand-alone ‘business’ in itself that requires business planning and market research. 

Provided that “Successful business models in the field of complex services are rare and 

often not profitable so far” as stated by (Peters, Kromat and Leimeister 2015), business 

models for telemedicine applications worldwide had started to show up during the last 

decade.  

 



11 

The main topic of this Master’s Thesis work is investigating business opportunities for 

the Nordic telemedicine Center (NTC) project in the Ostrobothnia region. The project is 

funded by the Interreg Bothnia Atlantica, which is one of the European Union funding 

mechanisms. The main aim of NTC project is to establish physical and virtual 

telemedicine center units (nodes) in Nordic countries to form Nordic telemedicine 

Network. Currently the project is ongoing in Finland and Sweden. Operations are targeted 

to be extended to other Nordic countries. The rest of the thesis chapters are organized as 

follows: 

 

Chapter 2 highlights the evolution of eHealth and telemedicine especially in Nordic 

countries. Most often people do not know the difference between eHealth and 

telemedicine hence this chapter provides detailed explanations for both aspects. 

 

Chapter 3 states the pillars of the successful business model design. The chapter provides 

more insights about business planning, framework and actions from different 

perspectives. The author discusses about some well-known business models within the 

chapter and choose the suitable one to work on for the NTC project. 

 

Chapter 4 displays the building blocks of the NTC Business Model Canvas based on what 

was described in Chapter 3. It contains the main exerted efforts for the investigation study 

to fill in the required blocks of the case study beforehand, NTC as a case study. The 

chapter also includes extra recommendations founded by the author besides the existed 

facts in the ongoing project. Finally, a SWOT analysis is rendered to summarize all the 

strengths and weaknesses of the business model internally and externally.  

 

In Chapter 5, Monte Carlo statistical method is used to evaluate the system performance 

based on some collected real and assumed statistics to provide some insights about the 

project. Simulations are carried out using MATLAB software. 

 

Chapter 6 concludes all the study results achieved from this investigation, gives some 

ideas and forecast for the future work to improve the NTC business model. 



12 

2. EHEALTH AND TELEMEDICINE 

2.1 eHealth 

2.1.1 Definition and Concept 

eHealth is a widely used technological term since the earliest 2000s that was originally 

the abbreviation of electronic healthcare. It refers to the use of emerging information and 

communications technology to improve health or enable healthcare. (Neter & Brainin 

2012)  

eHealth is the broader umbrella term that includes Telehealth, mHealth, telemedicine and 

Tele-homecare as shown in Figure 1. Examples of eHealth are e-prescribing, electronic 

health records (EHR) and the transfer of patient data between different care centers. 

(Jørgensen and Hallenborg 2015) 

 

Figure 1. Relation between eHealth and telemedicine.  

2.1.2 eHealth Evolution 

It is argued that eHealth concept emerged because of the Internet’s evolution from Web 

1.0, which was referred to as the static source of information to the interactive Internet 

medium named as Web 2.0 back in 2000. Some of the unique applications of Web 2.0 are 

for example: forums, wikis, blogs, virtual communities and social networks.  (Limburg 

& Gemert-Pijnen 2010) 

 

eHealth 

TeleHealth

Telemedicine



13 

Another argument perspective states that eHealth evolved thanks to three revolutions that 

have occurred since mid-twentieth century. Changes in conceptions of time and space 

along with the organizational changes caused by Information Technology revolution 

eventually produced eHealth as one of their consequences. Consequently, the beneficiary 

consumer (patient) looked for more access to his records, information, products and 

secured services anywhere, anytime. Thus, healthcare providers, individual physicians, 

Hospitals and insurance companies had been such subjects to the previous consumer 

demands besides responding to the challenge of the empowered consumer. (Helman, 

Addeo, Santoso, Walters, & Helman 2015) 

The three revolutions’ perspective offers help to elaborate how these big changes 

originally occurred hence researchers can assume what will be the pattern of future 

changes that may reshape healthcare on the long run and predict the business models that 

can fit to such changes. (Helman, Addeo, Santoso, Walters, & Helman 2015) 

There is no doubt that the most significant change produced through the three revolutions 

was the advent of the Internet. As a result, many consumers occupy a variety of adapted 

landscapes as shown in Figure 2. 

 

Figure 2. Dimensions of business response of consumer value proposition (Red) and the 

dimensions of consumer’s desired benefits (Green). (Helman, Addeo, Santoso, Walters, 

& Helman 2015) 

 

The pathway of consumer P1 displays that the consumer (patient) is fully integrated into 

the network and knowledgeable about devices which implies that he or she may have 

chronic disease e.g. diabetes but still can connect through the eHealth network, get the 



14 

required information. Adjust diet and get prescriptions. While on the other hand, 

consumer P2 pathway indicates that he or she is not well connected which means less 

integrated to the network thus other means of communication are to be sought and may 

experience higher costs in acquiring the demands of his medical condition. (Helman, 

Addeo, Santoso, Walters, & Helman 2015)  

2.1.3 eHealth Advantages 

Accordingly, eHealth provided three major benefits to modern healthcare, as follows: 

a) Better information 

Patients and healthcare professionals can share information between each other easily and 

continuously to improve diagnosis and treatments. Through Internet, information can be 

transferred instantly to reach the beneficiary personnel at the appropriate time. Moreover, 

healthcare professionals can cooperate on global scale thanks to the real-time information 

being processed. With regular health tips, newsfeed and information provision to patients, 

they can get more aware about their conditions, symptoms, treatment and curing. Thus, 

new patients can benefits from other patients’ experience with same problems. (Limburg 

& Gemert-Pijnen 2010) 

b) Effective care 

In eHealth, healthcare professionals are to carry out the treatment process using a chain 

of activities, which are often referred to as Disease Management. The efficiency and the 

improvement of the process depend on the alignment of the activity chains. With the help 

of eHealth applications, activities’ alignment can be performed, and redundant activities 

can be eliminated. Besides, patients can get more involved in their treatment processes as 

they can be triggered to participate in the treatment, monitor and administer medications. 

Thus, improving the well-being of the patient arises as an extra benefit from this point. 

(Limburg & Gemert-Pijnen 2010) 

c) Focus on patient 

With the flow of information to patients via Internet and communications with peers 

about the treatment possibilities, patient empowerment is resulted. It means that a more 

demand-driven type of healthcare with the patient as the focus. Patients will be more 



15 

capable of managing their treatment on their own in addition to obtain tailored care based 

on their status and personal needs. (Limburg & Gemert-Pijnen 2010) 

2.2 Telehealth 

2.2.1 Definition and Concept 

Telehealth is a subset of the broader eHealth systems, which displays the healthcare 

services’ delivery for longer distances and remote places. Telehealth includes the 

services, systems and technologies that are required to enable patients to stay at home 

instead of coming to Hospitals. Exchange of photos, remote monitoring and wiring 

physiological measurements are examples of the Telehealth services. (Jørgensen and 

Hallenborg 2015) 

A study in 2015 assumes that Telehealth solutions are expected to grow approximately 

by 20% annually within the years after. Main advantages of Telehealth are the potential 

to reduce the number and duration of Hospital visits, evolve as an important element in 

the integrated care model and strengthen the patient empowerment. The Integrated Care 

Model is defined as the coordination of doers such as general practitioners, Hospitals and 

municipalities who are providing health services for the beneficiaries such as patients to 

secure more coherent pathways for the patients. Data sharing between the doers via 

Telehealth systems is one important element to obtain an integrated care model. 

Moreover, patient empowerment purpose is to encourage the patient to take more active 

responsibility of his own healthcare by participating in crucial decisions and carry out 

some of the physical measurements of his body. (Jørgensen and Hallenborg 2015) 

Telehealth bestows benefits for all participants in the process; patients, healthcare 

professionals, healthcare organizations, and public authorities. Regardless, there exist 

some challenges that oppose large-scale deployments and adoption of telehealth such as 

the absence of national infrastructures to facilitate the collection health data from patients’ 

homes as well as data exchange facilities between homecare systems and the professional 

health records. (Jørgensen and Hallenborg 2015) 



16 

2.2.2 Telehealth in Nordic Countries  

Nordic countries, which are Finland, Sweden, Norway, Denmark and Iceland, are 

considered the international frontrunners in employing information technology into 

healthcare care sectors. Through recent decades, Nordic countries have collaborated to 

share research on the subject, for example, they established the Nordic eHealth and 

telemedicine conferences through the Nordic Council of Ministers. (Jørgensen and 

Hallenborg 2015) 

Interoperability is a one important driver for healthcare systems for promoting more 

adapted health services, which in turns accelerates the discovery of new knowledge. The 

European Commission paid great attention towards the importance of interoperability in 

eHealth since the beginning of the new millennium as stated in Europe 2020 strategy. 

(Jørgensen and Hallenborg 2015) 

Each of the member states of the European Commission committed themselves to 

collaborate on report series to achieve the previous focus point, which are published back 

in 2010. Table 1 displays the national authority for each corresponding Nordic country. 

 

Country National authority/authorities 

Denmark 
• The National eHealth Authority  

• MedCom 

Finland 
• Ministry of Social Affairs and Health 

• The National Institute for Health and Welfare 

Iceland 
• Ministry of Welfare 

• The Directorate of Health 

Norway • The Norwegian Directorate of Health 

Sweden 
• The Swedish eHealth Agency  

• Inera 

Table 1. National healthcare authorities in Nordic countries. (Jørgensen and Hallenborg 

2015) 

 



17 

• Denmark 

The National eHealth Authority in Denmark published the document “Reference 

Architecture for Collecting Health Data from Citizens” in 2013 as a resultant of five 

workshops carried out in collaboration between MedCom, DELTA and the Local 

Government of Denmark. That reference architecture was set as an outcome of the action 

plan stated in 2012. The plan recommended that reference architecture was needed to 

deploy Telehealth solutions on large scale as a factor of the future digital welfare reform 

in the country. Denmark was the first worldwide country to set the base for their national 

Telehealth infrastructure on the Continua Health Alliance Framework (CHAF), which is 

a personal connected health alliance that aims to develop health and wellness as an 

effortless part of daily life. (Jørgensen and Hallenborg 2015)  

• Finland 

During the 2000s, there are four conducted surveys on the status and trends in Finnish 

eHealth during the years 2003, 2005, 2007 and 2011. The last conducted survey was the 

basis of the published report in 2013 titled “eHealth and eWelfare of Finland – 

Checkpoint 2011”. The Finnish focus was the development of the National Archive of 

Health Information (KanTa). Some Telehealth pilots were carried out as well. Starting 

from 2014, the Finnish authorities obligated public healthcare providers to join KanTa 

and in 2015, the obligation extended to include private healthcare providers as well. 

Because the healthcare providers’ health record systems are the main data sources for 

KanTa, they must follow common guidelines to describe variety of data elements such as 

patient identity, clinical records and health risk data. (Jørgensen and Hallenborg 2015) 

• Iceland 

Iceland is one of the leading countries in information technology infrastructures 

worldwide whereas it aims to become a pioneer in delivering online and electronic public 

services including healthcare. The Icelandic healthcare sector is a network called 

Heilsunet (Health net) which is responsible for achieving the country’s vision in 

healthcare since 2007. The mission of Heilsunet is to facilitate secure data connections 

and link all healthcare institutions in the country. Telehealth application started to appear 

in Iceland back during the 1990s such as tele-psychiatry and tele-radiology. (Jørgensen 

and Hallenborg 2015) 



18 

• Norway 

Telehealth started to gain interest in Norway since 1998. A report published by the 

Norwegian governmental website “Sosial- og helsedepartementet” described the 

requirements and the roadway for applying telemedicine throughout Norway in the same 

year. (Blomberg, Myklebust, Engum & Nakken 1999) 

 

Since 2014, the Norwegian Directorate of Health’s publication titled “Anbefaling på valg 

av standarder/rammeverk for velferdsteknologi” set the wide outlines for the standards 

and framework to be considered in Telehealth in the future besides setting a model for 

national reference architecture for the domain. Later in the same year, the Directorate 

published a document to describe the structure of the future Norwegian reference 

architecture in more details, called “Helsedirektoratets anbefalinger på det 

velferdsteknologiske området”. The reference architecture version shown in Figure 3 is 

based on the Continua Framework. (Jørgensen and Hallenborg 2015) 

 

 

Figure 3. The Norwegian Telehealth reference architecture. (Jørgensen and Hallenborg 

2015) 

 



19 

• Sweden 

The Swedish Ministry of Health and Social Affairs outlined the Swedish strategy of using 

information technology within the healthcare sector via the publication titled “National 

eHealth – the strategy for accessible and secure information in health and social care” in 

2010. The Swedish focus was on applying eHealth as a broad term from an ICT 

infrastructure perspective, same as the Norwegian and the Danish ones though Sweden 

possess a wide range of Telehealth applications such as remote patient monitoring and 

teleconsultation between the patient and the medical staff. The main target for Sweden in 

eHealth on the long run is to deliver healthcare to the residential homes. (Jørgensen and 

Hallenborg 2015) 

2.3 Telemedicine  

2.3.1 Definition and Concept 

Telemedicine is a subset from Telehealth. According to European Commission’s 

Advanced Informatics Programme in Medicine, telemedicine is defined as the “Rapid 

access to shared and remote medical expertise by means of telecommunications and 

information technologies, no matter where the patient or relevant information is located”. 

Telemedicine does not introduce anything new to the medical sector; instead, it is a set of 

communication means and services that allow the medical resources to be used in modern 

and efficient ways. (Blomberg, Myklebust, Engum & Nakken 1999) 

2.3.2 International Adoption 

From an international perspective, Telemedical services have grown exponentially during 

the 2000s. Developed countries projected large-sized expenditures towards telemedicine 

research. Countries that possess the most progress in telemedicine are The United States, 

Canada, Australia, Nordic countries and Western European nations. Telemedicine has the 

capability to cross geographical and political boundaries via numerous communication 

means including the Internet. Thus, a worldwide Telemedical network is achievable by 

the integration between different national telemedicine systems. (Blomberg, Myklebust, 

Engum & Nakken 1999) 



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2.3.3 Telemedicine in Nordic Countries  

The first Nordic telemedicine joint project was among the years 1993 – 1995. It was a 

tele-radiology project that included the cities of Oulu (Finland), Reykjavik (Iceland) and 

Tromsø (Norway). The Swedish Planning and Rationalization Institute of the Health 

Services (SPRI) held a tele-radiology conference in the earliest of 1990s. Finland hosted 

the first Nordic telemedicine conference in 1996. The Nordic telemedicine Association 

was founded during autumn 1999 in Greenland as a federation of the national 

telemedicine associations and organizations. Later in 2012, the Nordic eHealth Group 

which was founded by the Nordic Council of Ministers introduced the Nordic eHealth 

Research Network (NeRN) as a team focusing on health information exchange and patient 

portal functionalities. (Kouri 2015)  

 

The Nordic national eHealth strategies are typically based on standards, public funding 

and centralized governance. Among the key targets are improved information security, 

guaranteed privacy of the patient records and increased patient influence. New ICT 

infrastructures are also utilized by the healthcare organizations to provide better access 

for the users. (Kouri 2015)  



21 

3. BUSINESS MODEL DESIGN 

A business model is a proactive study that describes the way of how an organization 

create and deliver a value with a main goal of capturing the expected revenue. It is like a 

blueprint for the organizational ongoing strategy to be carried out via its structures, 

systems and processes. (Osterwalder and Pigneur 2010) 

Understanding the concept and the idea behind the business model allows every member 

of the organization to work on facilitation of each role described in the model to achieve 

the set goal. That is achievable by holding constructive conversations among the 

organizational meetings to spread the organization's business model milestones among 

the team and gain the most focus on the desired goal. The concept should be simple, to-

the-point and understandable on all levels. (Osterwalder and Pigneur 2010) 

3.1. Types of Business Models 

Business modelling can be exhibited using many classifications, for businesses already 

started in ancient eras and its sorts of modelling varied through the ages until nowadays. 

It can be classified according to the market needs, own resources, partnerships and 

customer types. The main method for generating the type of business model that the 

organization should follow comes after answering these questions:  

- What does the organization sell? 

- To whom?  

- Why?  

- When? 

- And how? 

The value or product or service that is presented by the organization is defined by the first 

question: "What are you selling?” The targeted audience or customers are described after 

answering the second question: "To whom?”. The third question portraits the reason 

behind delivering such a value and no other hence desired outcome from the whole 

business could be verified. The fourth and the fifth questions are the key to establish the 

appropriate channel between the business and the customer by knowing how and when 

to deliver such value, resulting in solid customer relationship. 



22 

3.2. Role of Business Model in Telemedicine 

There is a great need for a well-planned national move towards adapting telemedicine 

technologies to help patients with chronic diseases hence effectively take control of their 

chronic conditions that leads to a relief in the governmental mission of the National 

Health System (NHS). The expression people with chronic diseases does not only refer 

to the people who are carriers of chronically dangerous disease as AIDS or Viruses, elder 

people are sometimes clinically referred to as people with chronic disease as well. The 

main challenge of telemedicine industry for Healthcare companies and eHealth investors 

is the uncertainty of cost Vs revenue) equation that is always associated with 

telemedicine. Such organizations are expecting fine national approach towards the field 

along with demonstration of cost efficiency to fade such ambiguity. Reducing National 

Healthcare burden is viable through reducing frequent people visits to healthcare 

providers, limiting unnecessary visits to physicians, monitoring vital signals all the time 

on 24/7 basis hence providing chronic disease prevention as well as treatment in case of 

infection. (Prag & Yeghiazarian 2006) 

 

In simple words, the telemedicine business model is the determination of the type of 

services or value offering that should be carried out by healthcare organization and how 

such value should be presented in order to stream revenues within the healthcare market. 

The business could be referred to as ROI (Return on Investment) or the cost-efficiency 

equation that is solved by the healthcare organization to monetize its value. Each 

organization should spend appropriate time budget in analyzing patients' needs, chronic 

disease management technologies and remote patient monitoring solutions to benefit 

from each pillar of the business model for decision takers hence financial success. 

Obviously, the main goal of such analysis is to define what should be the offered value 

that triggers all other parts of the model to maintain cost efficiency. (Prag & Yeghiazarian 

2006) 

 

Healthcare professionals use business models to state the degree of suitability and reality 

of telemedicine technologies systems that are used for chronic care management on the 



23 

long term and whether such technologies have ROI and cost reduction or not. (Prag & 

Yeghiazarian 2006)  

The national approach should fulfill four healthcare organization demands for enhancing 

the telemedicine business model:  

• Strategy: Obtaining the strategic value of chronic disease telemedicine systems. 

Locating and collecting meaningful data for measuring an organization's progress 

with respect to achieving its strategic aim as one of the challenges that face 

healthcare systems. This strategic value is not yet defined for telemedicine 

systems in the United Kingdom; it requires more effort to be sorted out. (Prag & 

Yeghiazarian 2006) 

• People: Healthcare organization success relies on how the healthcare 

professionals are recognized or valued because it has been found that switch of 

unit members identities from the job description to their achievements returned 

improvement of efficiency and morale thus resulted in cost savings. (Prag & 

Yeghiazarian 2006) 

• Process: Applying telemedicine business model including remote monitoring 

systems deployment proves the cost reduction, productivity and the expected 

added efficiency for the healthcare organization. The business model should 

include all characteristics of the healthcare framework using a quantized relation 

for the internal and external healthcare organization processes, from the 

organizational management perspective (top-to-bottom view) of policies and 

processes, and from healthcare professionals-patient perspective (bottom-to-top 

view) to ensure efficient processes and reducing future costs through the IT layer 

by inbounding and outsourcing new services. (Prag & Yeghiazarian 2006) 

• Technology: The main purpose of telemedicine is to serve best medical diagnosis 

and healthcare to the remote patients via all available means of technology. Such 

technologies can be mobile telecommunication and wireless telemedicine. 

Technology is a crucial player in the telemedicine system deployment and for all 

personnel who are involved. The determination of systems' return on investment 

(ROI) usually takes at least 18 months to obtain, while considering medical 



24 

applications, services, products, training and development. (Prag & Yeghiazarian 

2006) 

 

The previous four requirements for healthcare organization can be integrated to form a 

measurable evaluation for the telemedicine system, as shown in Figure 4. 

 

 

Figure 4. Integrating the four healthcare organization requirements. (Prag & Yeghiazarian 

2006) 

 

The main objective of integrating the four healthcare organization requirements is to 

formulate the value of the telemedicine system. This can be obtained through the 

specialized telemedicine business model to measure the impact of healthcare 

management systems concerning chronic disease holders. 

 

It is good to notice that the NHS is not equivalent to the NTC project. The NHS is actually 

the equivalent to the whole Finnish healthcare sector. The mentioned framework is the 

NHS framework for telemedicine and the healthcare organization requirements only. 



25 

3.3. Business Model Framework 

To fulfill the objective of defining the value, the business model should contain the key 

relevant factors for sustainability. The majority of telemedicine projects in the United 

Kingdom are carried out from a clinical trial perspective with no analysis for the future 

and ongoing costs. One efficient way to carry out a sustainable development of 

telemedicine is to establish a collaborative environment within the healthcare 

organization whereas clinical trials should be monitored as cost center business projects 

concentrating on the ROI (return on investment) and cost reduction. (Prag & 

Yeghiazarian 2006) 

 

Cost center business projects require the following business drivers: 

- The proof of cost-benefit analysis and cost-efficiency of the telemedicine project 

- SWOT analysis to define strengths and weaknesses of the healthcare organization 

internally besides the opportunities and threats externally.  

- Measure the effect of telemedicine system to clinical trials by comparing a current 

clinical trial without telemedicine system and other clinical trial with a 

telemedicine system.  

- Defining organization needs and personnel demands (like patients and physicians) 

from the remote chronic disease monitoring system. 

Supporting the previous business drivers can be through: 

- Financial assessment by setting Key Performance Indicators (KPIs) and Critical 

Success Factors (CFS). 

- Determination of business volume needed for break-even in terms of telemedicine 

system profit and loss. 

- Predication of type of activity required for gaining the targeted profitability and 

ROI within time budget. 

Whenever business drivers such as CSFs and KPIs are defined then they should be 

integrated in the whole telemedicine business model for chronic care management to 

weigh the effect of telemedicine, as shown in Figure 5. 



26 

 

Figure 5. The proposed business model for chronic care management using three focus 

areas: A) Healthcare Objectives, B) Stakeholder Analysis and C) Healthcare Functions. 

(Prag & Yeghiazarian 2006) 

 

The previous proposed cube-like model encapsulates the characteristics of the 

telemedicine business model that fit healthcare organizations in the United Kingdom. 

This 3D cube in Figure 5 shows the linked building blocks required by healthcare 

organizations for a complete business assessment as a cause for implementing 

management system for telemedicine chronic disease healthcare. The focuses are 

healthcare objectives, healthcare stakeholder analysis and healthcare functions. Table 2 

presents the three focus areas and the telemedicine business model’s building blocks, 

from which each of them consists of. One advantage of this structure is that every building 

block can be evaluated separately and thoroughly to meet the set KPIs and provide the 

expected value of the telemedicine management system for healthcare organization. (Prag 

& Yeghiazarian 2006) 

 

 

 

 



27 

Focus area Role Building blocks 

Healthcare Objectives Identify the 

Healthcare 

objectives 

when 

performing an 

assessment for 

emerging 

technology for 

diabetes care. 

• Cost Efficiency 

o Identifying tangible and intangible 

costs that constrain chronic care 

• Accessibility 

o Access to improved healthcare 

• Diagnostic/Prevention 

o Mechanisms to improve chronic 

care and make timely preventative 

measures 

• Quality of care 

Stakeholder Analysis Identify the 

stakeholders 

who will be 

directly or 

indirectly 

affected by the 

launch of a 

telemedicine 

service. 

• Patient care provider 

o Surveying care provider’s views 

• mobile provider 

o Obtain industry emerging 

technology trends and technology 

roadmaps 

• Payer (Primary care, Hospital) 

o Ensuring payer of service is willing 

to subsidize payment for m-health 

service quality of care 

• Regulator 

o Evaluating the m-health model of 

service for delivery and healthcare 

policy decision making 

Healthcare Functions Identify the 

healthcare 

functional areas 

that will be 

impacted by a 

telemedicine 

decision and 

ongoing service 

management 

• Clinical/Medical 

o Continuity of informed and efficient 

care to patients 

• Administration 

o Ensuring continuity of care is within 

reach and available to patients 

• IT Operations 

o Make sure certain Healthcare 

operations frameworks are in place 

for chronic care and management 

• Change management 

o Transforming the Healthcare 

Organization to ensure the success of 

chronic disease management 

Table 2. Building blocks of each focus area of the telemedicine business model. (Prag & 

Yeghiazarian 2006) 



28 

3.4. Popular Business Models 

Business models can be classified according to the type of business, shown in Figure 6. 

 

Figure 6. Types of business models according to the type of business. (Slidehunter 2017) 

 

3.4.1. Brokerage Model 

Whereas the broker offers his service for brokering other users account against an agreed 

charge for that service based on the broker's own experience. In other words, the business 

sells its experience in brokerage as a value. This type of business can be entitled as a 

market maker business, whereas brokers succeed in gathering sellers and buyers together 

for performing business transactions. (Slidehunter 2017) 

3.4.2. Advertising Model 

Advertising business model is the traditional way of media broadcasting marketing model 

whereas an advertising company offers its media channels as a service for promoting 

other businesses services and products. Therefore, the value here is the experience of 

market dissection and own media channels as an asset. (Slidehunter 2017) 

3.4.3. Infomediary Model 

Infomediary business model offers information concerning understanding the market for 

their business partners; it is more likely to be consulting rather than selling a certain 

product or service. These infomediaries help assist buyers and sellers to acquire clearer 

view of the current market. (Slidehunter 2017) 

Advertising 
Model

Informediary 
Model

Merchant 
Model

Affiliate Model

Community 
Model

Brokerage 
Model

Subscription 
Model



29 

3.4.4. Merchant Model 

In Merchant Model, the firm provides service and offers goods through direct sales 

whereas the merchant is the one who is responsible for the product. Revenue is gained 

through selling goods according to price listing or auctions. (Slidehunter 2017)  

3.4.5. Affiliate Model 

In Affiliate Model, companies offer incentives to their affiliate partners upon helping 

them to redirecting customers to their marketplace or online e-shop portal. This model 

gained huge popularity especially in online digital marketing platforms and e-commerce. 

(Slidehunter 2017) 

3.4.6. Community Model 

Community business model is mainly based on user's affections toward the business i.e. 

loyalty to certain brand. The revenue here depends on the type of product. (Slidehunter 

2017) 

3.4.7. Subscription Model 

Subscription business model facilitates customer communication and interaction by 

charging customers periodically such as daily or monthly basis for the continuation of 

service provision. (Slidehunter 2017) 

3.5. Business Idea 

The idea is the most important aspect in which the business plan is formed around. It is 

the building cornerstone of any business plan to be launched whereas it displays the 

desired value to be presented, to whom it will be presented and how to implement it.  

Although the good idea and the entrepreneur’s motivation are essential, that does not 

guarantee a successful business. The execution of a business plan requires personal skills, 

qualities and financial funds. In addition, competitor analysis should be carried out to 

obtain the competitive edges and leveraging additions. (Tran 2014)  



30 

3.6. Business Plan 

A business plan is the entrepreneurs’ roadmap resulted from intense research to startup 

their business. The plan should include the description of the business idea, the executive 

summary, the marketing strategy and the financial plan stating the expected costs and 

profit. (Tran 2014) 

In addition to be the showcase of the owner’s intention for the business, it can be used in 

negotiations with prospective funders, partners and suppliers. The writing style of the 

business plan differs depending on the type of audience or the intended reader. For 

instance, the business plan intended for investors would focus more on the overall profit 

at lower risks. (Tran 2014) 

3.6.1. Elements of a Business Plan 

The business plan does not have an exact shape because it is case-dependent and varies 

according to the internal and external factors. Nevertheless, there are certain aspects that 

should be presented in any business plan, which are shown in Figure 7. 

• Business background 

The description of the business background is the main drive for motivation towards 

the business. It encapsulates the business vision, required mission, business objectives 

and legalities. 

• Executive summary 

Executive Summary is a short-length summarization of the business plan highlighting 

the business idea, the products or services, target group and financial Figures. The 

main goal is to introduce the business briefly in order to highlight the idea for 

prospective investors or funders. This step should be formalized after finishing all 

other parts. (Tran 2014) 

• Market research 

Market research is a thorough study, which contains several aspects about the market 

as the target market, expected market-share, intended customers, channels and 

competitors. The effective market analysis can significantly push the business 

forward. Two types of market researches can be conducted: primary research and 



31 

secondary research. Primary research is gathering own data via surveys and 

interviews whereas secondary research is acquiring market information via the media 

whether it is published, broadcasted or graphic. Finally, information about the 

competitive advantage can be rendered. (Tran 2014) 

• Marketing strategy 

Marketing strategy can be viewed as the plan on how to get to the business objectives. 

It starts with SWOT analysis: which is identifying the strengths, weaknesses, 

opportunities and threats. The marketing strategy consists of three steps: analysis, 

formulation and implementation. The strategic analysis identifies the SWOT factors 

through a deep understanding whereas the strategic formulation identifies the 

strategic options to evaluate and later select the suitable strategy. Finally, the strategic 

implementation is the execution of the defined strategy. (Tran 2014) 

• Operational plan 

The operational plan encapsulates the daily routine of the business in addition to the 

status of the equipment, human resources and other surrounding elements. 

Furthermore, it should also include information about legal requirements, personnel 

management, inventory, suppliers and distribution. (Tran 2014) 

• Financial plan 

The financial plan states the expected profit versus costs, cash-flow projection, a 

projected balance sheet and break-even calculation. (Tran 2014) 



32 

 

Figure 7. The elements of a business plan. (Tran 2014) 

 

3.7. The Osterwalder Business Model Canvas 

The Business Model Canvas is a global method introduced by Alexander Osterwalder, a 

Swiss business theorist, author and consultant. This model is used by wide variety of 

companies worldwide of all sizes of businesses. The canvas can be used to design, 

describe and generate the business model and the expected shape of value proposition to 

be served to the audience. (Osterwalder and Pigneur 2010) 

This Osterwalder model is proven to be modern, appropriate and condensed business 

model that fits to the target of numerous business ideas. It is a business research plan and 

an action plan at the same time for it states the business resources and activities both alike.  

(Osterwalder and Pigneur 2010) 

 

The Osterwalder canvas consists of nine main building blocks: 

1- Customer segments 

2- Value proposition 

3- channels  

4- Customer relationships 

Financial Plan

Marketing Strategy

Market Research

Business Objectives

Executive Summary

External 
Appraisal
Opportunities

Threats

Internal 
Appraisal

Strengths 
Weaknesses



33 

5- Revenue streams 

6- Key resources 

7- Key activities 

8- Key partnerships 

9- Cost structure 

Figure 8 illustrates the Business Model Canvas. 

 

Figure 8. Business model Canvas by Alexander Osterwalder. (Osterwalder and Pigneur 

2010) 

 

3.7.1. Customer Segments 

The customer segment building block defines the various groups of people or 

organizations which the business seeks to reach and serve. Customers are the center 

point of any business model, without potential customers the business revenue is 

certainly will be attenuating to an end. (Osterwalder and Pigneur 2010)  



34 

 

Figure 9. Customer segment building block. (Osterwalder and Pigneur 2010) 

 

Companies usually tend to form segmentation for their customers by grouping them 

according to their common needs, common behaviors and other attributes. The 

business model can state several-sized customer segments, the company or the 

organization should decide which segment to focus on and which should be discarded. 

Customer groups represent distinct segments when their needs require unique offers. 

Reaching out to customers is carried out via different channels. Hence, customers 

require various types of relationships because they provide different profitability to 

the business and are ready to pay for different forms of offers. After identifying the 

targeted customer segments, the business model can then be designed around a solid 

understanding of customer needs. (Osterwalder and Pigneur 2010) 

 

Customer segments can be classified to the following categories: 

• Mass market  

Business models that are focusing on mass markets do not differentiate between the 

various customer segments. The value proposition, channels and customer 

relationships are all broadcasted to one main customer segment who are sharing most 

of the similar needs and problems. As example, the consumer electronics business 

model. (Osterwalder and Pigneur 2010) 



35 

• Niche market 

The niche is the very specific type of business, which is presented to very specific 

type of customers. Business models that target niche markets tend to tailor the value 

proposition, channel and Customer relationships to the specific targeted audience. 

This type of business model is usually found in supplier-buyer relationships. 

(Osterwalder and Pigneur 2010) 

• Segmented  

The business models which distinctly categorize the targeted audience according to 

their slight differences of needs and problems are called segmented. For example, the 

retail section of a bank use to tailor the credit offers according to the customers’ 

possession of assets i.e. a large group of customers who possess assets worth €100,000 

and a smaller group of customers who possess assets exceeding €500,000. Both 

segments have slight differences between their common needs hence the bank's value 

proposition differs. (Osterwalder and Pigneur 2010) 

• Diversified  

The diversified business model can be found among organizations that serve two 

unrelated customer segments having different needs and problems. For example, the 

Amazon.com cloud computing section that was introduced to Amazon’s retail 

services in 2006 besides the existed retail services. (Osterwalder and Pigneur 2010) 

• Multi-sided markets  

Multi-sided markets refer to such a business model that is run by an organization, 

which operates with two or more interdependent customer segments. For example, a 

credit card company which requires large base of credit card holders and large base 

of merchants who accept this type of cards. (Osterwalder and Pigneur 2010) 

3.7.2. Value Proposition 

The value proposition building block indirectly portraits the set of products and 

services that are capable of creating the desired value for the defined customer 

segments. In fact, the value proposition is the main reason of redirecting customers 

from one company to another within the same business niche whereas it solves a 



36 

customer's problem or fulfil his needs. The selected set of products or services allows 

the company to deliver the exact value to the exact segment of its customers hence 

the value proposition is a fine bundle of benefits that a company or an entity offers its 

customers. Some value propositions are genuinely new and innovative; others can be 

similar to other competitive offers in the market with additional leveraging touches. 

(Osterwalder and Pigneur 2010) 

 

Figure 10. Value proposition building block. (Osterwalder and Pigneur 2010) 

 

Value proposition (value creation) is the result of mixing distinct elements that fulfil 

the corresponding customer segment’s needs. Values can be quantitative such as 

price, speed of service or they can be qualitative such as design and customer 

satisfaction. (Osterwalder and Pigneur 2010) 

Elements from the following non-exhaustive list can contribute to customer value 

creation. (Osterwalder and Pigneur 2010) 

• Newness 

Entities such as technology companies, tend to raise new set of needs that customers 

previously did not perceive which can be fulfilled by some specific value proposition. 

For example, a whole new industry was created upon the development of mobile 

telecommunication. (Osterwalder and Pigneur 2010) 



37 

• Performance 

Traditionally, improving product or service performance has been an abundant 

method to create a value. For example, PC (Personal Computer) industry normally 

relied on this factor by adding more powerful machines to the market. However, 

improved performance will face a dead end at some point, inevitably. Recently, it is 

found that faster PCs, larger disk storage space and better graphics have failed to 

produce a corresponding larger growth in customer demand. (Osterwalder and 

Pigneur 2010) 

• Customization  

Value creation can be obtained through tailored products and services to the specific 

needs of individual customers or customer segments. Recently, mass customization 

and customer co-creation are key successful factors in value creation. 

• Servicing “Getting the job done” 

Maintaining the presented services and products for the customer segments is a type 

of value proposition. For example, airline companies rely entirely on Rolls-Royce 

manufacturer to manufacture and service their jet engines. This facilitation is 

considered a new value proposition in itself. 

• Design 

Design is an important, complex element which is hard to measure. Superior design 

can leverage a product and vice versa. In fashion industries for instance, design is a 

main issue of the value proposition. 

• Brand 

A value proposition can be based on a Brand. Some customer segments may find a 

value of displaying a specific brand for various deeds e.g. wearing a Rolex watch to 

display wealth and prosperity or obtaining latest brand models to signify “up-to-date” 

manners. 

• Price 

Price-sensitive customer segments tends to obtain similar value at a lower price. It is 

a common way to satisfy this segment’s exact needs, but low-price value proposition 



38 

inevitably comes at a cost which affects the business model. For example, business 

models of low-price airline operators such as EasyJet and Ryanair rely mainly on 

reducing the price on the account of the quality which facilitates low-cost travelling. 

Another example is given by the Indian Tata cars. Their products are sold at a very 

low price which satisfy and fits the characteristics of a wide customer segment of the 

Indian population.  

• Cost Reduction 

Helping customers reduce costs is an important way to create value. For example, 

Salesforce.com offers a hosted Customer Relationship Management (CRM) 

application which relieves customers from the costs of buying, installing and 

managing CRM systems themselves hence reduce costs. 

• Risk Reduction 

Reducing potential risks is a one way to create a value proposition for customers. This 

is obvious in second-hand cars markets. Offering a one year guarantee creates a value 

for customers, because it reduces the risk of post-purchase breakdowns and repairs. 

• Accessibility 

Facilitating the accessibility to customer who previously lacked access to products 

and services is a way of creating a value. This can be arranged through innovative 

ideas implemented in the business model, new technologies or a combination of both. 

For example, using an innovative business model, NetJets company facilitated the 

concept of fractional private jet ownership. It offers both individuals and enterprises 

an access to private jets, a service which was previously unaffordable to most 

customers.  

• Usability 

Making things easier and convenient to use is a way to create a value. For example, 

using iPod and iTunes, Apple offered its customers a convenient way to search, buy, 

download and listen to digital music. Consequently, Apple dominated digital music 

market.  



39 

3.7.3. Channels  

The channels building block describes how the organization should communicate and 

interface with its segments of customers and reach out to them in the appropriate 

timing for delivering the value proposition. Interfacing with customers includes 

communication, distribution and sales channels. These interfacings are the touch 

points with customers, which play a crucial role in improving customer experience. 

Channels improve numerous functions such as: delivering value proposition to 

customer segments, raising customers' awareness about the company's products and 

services, driving customers for correctly evaluating the company's value proposition, 

facilitate the purchase of certain products and services and providing service-after 

sales support to customers. (Osterwalder and Pigneur 2010) 

 

 

Figure 11. Channels building block. (Osterwalder and Pigneur 2010) 

 

Customer segments are to be reached through channels. Best way to reach customers, 

the best channel to use, the best time to contact them, the most cost-efficient channel 

and the integrity between channels can all be determined via the channel phases. 

(Osterwalder and Pigneur 2010) 

Channels have five distinct phases whereas each channel can fulfil one or more of the 

required phases. Channel classification is shown in Figure 12. 



40 

 

Figure 12. Channel classification. 

 

Table 3 shows the five channel phases related to each channel type.  

Table 3. Channel phases and channel types. (Osterwalder and Pigneur 2010) 

3.7.4. Customer Relationships 

The customer relationship building block states the recommended types of 

relationships between the organization and each of customer segments for a long-term 

relation. The organization should clearly set the type of relationship it wants to build 

with each customer segment ranging from personal to automated relationships. 

(Osterwalder and Pigneur 2010) 

Customer relationship can be driven by three motives such as:  

- Customer acquisition 

- Customer retention 

- Boosting sales or upselling 

• Direct channels
• Indirect channels

Own channels

• Direct channels
• Indirect channels

Partner channels

Channel Types Channel Phases 

O
w

n
 

D
ir

ec
t Sales force  

1. Awareness 

Spread and raise 

awareness about 

the entity’s 

products and 

services. 

 

2. Evaluation 

Provide 

customers with 

an evaluation 

method to 

evaluate the 

value 

proposition. 

 

3. Purchase 

Direct customers 

to purchase 

specific products 

and services. 

 

4. Delivery 

Develop a 

delivery 

system to 

deliver the 

value 

proposition to 

customers. 

 

5. After sale 

Provide 

customer support 

after purchase. 

Web sales 

In
d

ir
ec

t 

Own stores 

P
a

rt
n

er
 

Partner 

stores 

Wholesaler 



41 

Figure 13. Customer relationship building block. (Osterwalder and Pigneur 2010) 

 

For example, in the earliest days of mobile network operators’ era, customer 

relationships were managed by excessive acquisition strategies that depend on free 

mobile phones, free subscriptions and gifts. Afterwards, when the market grew 

saturated, operators turned to focusing on customer retention and increase average 

revenue per customer. The customer relationship strategy executed by the company 

or the organization severely affects the overall customer experience. (Osterwalder and 

Pigneur 2010)  

 

Several categories of customer relationships can be established toward the 

corresponding customer segment, such as: 

• Personal assistance 

Personal assistance relationship depends on human interaction between the customer 

and a customer support representative. The customer support representative’s main 

role is to help the customer during the sales process and after purchase is done. This 

interaction can take place at the sale site, via call center, email or website. 

(Osterwalder and Pigneur 2010) 

• Dedicated personal assistance 

Dedicated assistance relationship is established through a dedicated customer support 

representative to an individual customer person specifically. It is the most intimate 



42 

type of relationships that requires a long period of time to be developed properly. This 

type is abundant in private banking services whereas high net worth individual 

customers are appointed a dedicated banker to each one of them for retaining, 

counselling and promoting bank services. Similar relationships exist in other 

businesses via account managers whose main role is to establish and maintain a long-

lasting personal relationship with valued-customers. (Osterwalder and Pigneur 2010) 

• Self-service 

In self-service relationship, the entity has no direct relationship with customers. 

However, the entity provides all necessary means for customers to help themselves. 

(Osterwalder and Pigneur 2010) 

• Automated services 

Automated type of relationship integrates a more sophisticated form of self-service 

with automated processes. For example, the personal online accounts grant customers 

access to customized services whereas automated services are able to define 

customer’s behavior, characteristics and interests. Consequently, automated services 

can maintain a personal relationship with customers, tailor specific offers to fulfil 

their needs and provide recommendations. (Osterwalder and Pigneur 2010) 

• Communities 

In community relationship, entities utilize user communities to reduce the gap 

between potential customer segments and the business besides maintaining 

connection between community members. Modern marketing strategies rely on 

communities to maximize both reach and revenues. Online communities are the most 

abundant type of communities. They allow users to exchange knowledge and help to 

solve their problems. Communities also provide entities with better insights about the 

characteristics and interests of current and potential customers. (Osterwalder and 

Pigneur 2010) 

• Co-creation 

Numerous entities are exceeding traditional customer-vendor relationship by 

allowing customers to co-create the value proposition. For example, Amazon.com 

invites customers to write reviews and therefore create value to book readers and 



43 

authors. Some companies involve customers in the designing phases of new products 

or services. Others allow users to create content on the entity’s platform for public 

broadcasting and review. (Osterwalder and Pigneur 2010) 

3.7.5. Revenue Streams 

The revenue streams building block defines the sources and the amount of cash 

(money) that the company or organization is expected to get from each customer 

segment per unit time. The revenue stream is the net profit that is yielded from the 

process of value proposition i.e. excluding the costs. By analogy, if the customer 

segment is the heart of the business model then the revenue streams are its arteries. 

By knowing how much and for how long the customer is truly willing to pay for the 

value, the organization will be able to successfully generate one or more revenue 

streams from each customer segment. Each revenue stream may have different pricing 

mechanism as fixed price lists, auctions, market dependent or volume dependent. 

(Osterwalder and Pigneur 2010) 

 

Figure 14. Revenue streams building block. (Osterwalder and Pigneur 2010) 

 

• Types of revenue streams 

Two different types of revenue streams can be obtained by the business model: 



44 

- Transaction revenues: it is the result of one-time customer payments 

- Recurring revenues: it is the result of regular ongoing payments against value 

propositions to customer or through providing after-sales customer support. 

• Revenue streams generation 

Revenue streams are generated through various ways, such as follows: 

- Asset sale 

Asset sale is the most widely understood revenue stream. It is simply the result of 

selling ownership rights through physical products like books, music, car models and 

more. 

- Usage fee 

Usage fee revenue stream is derived by the use of a certain service. The more the 

service is used, the more the customer should pay. Telecom operators are the most 

common example for usage fees as they allow the users to use their network 

infrastructures and charge them for the time spent in minutes. Another example, 

hotels, they allow the guests to use their facilities and charge them per unit time spent 

i.e. per night.  

- Subscription fees 

Selling the permanent access to a service generates a one revenue stream for the 

business model. For example, a gym would allow users to access its exercise facilities 

against monthly or annual subscriptions. This differs from usage fees, users are 

seeking one-time or several-time usages for the service but on the other hand, in 

subscription fees, users are regularly using the service. 

- Lending/Renting/Leasing 

Lending/Renting/Leasing is a temporary revenue stream, which is generated through 

granting someone the exclusive right to use a particular asset for a fixed duration 

against a fee. This provides an advantage of recurring revenue for the lender and very 

beneficial for the renters as they do not have to accommodate full cost. Instead, they 

enjoy the service of a limited time. For example, Zipcar.com allows customers to rent 



45 

cars on hourly basis in Northern American cities. This cemented the concept of car 

rent rather than car purchase. 

- Licensing 

Licensing revenue stream is generated by granting the customers a permission to 

utilize protected intellectual properties against a licensing fee. Licensing make right 

holders to benefit from their property without the need to manufacture a product or 

commercialize a service. This revenue stream is very common in media industry 

whereas content owners reserve the copyrights while selling usage licenses to third 

parties. Similarly, in technology fields, patent holders permit other companies and 

organizations the right to use the patented technology against a license fee.  

- Brokerage 

Brokerage revenue stream results from the intermediation services carried out on 

behalf of two or more parties. Brokers and real estate agents earn a commission per 

each successful transaction that matches buyer and seller.  

- Advertising 

Advertising revenue stream is based on the advertising of a particular product, service 

or brand. It is a very reliable source of revenue for the media industry. Recently, other 

sectors, including software industry, started to rely on advertising streams. 

- Pricing Mechanism 

Each revenue stream has its different pricing mechanism. The type of pricing 

mechanism used can directly affect the revenue generation. Pricing mechanisms are 

mainly two types: fixed pricing and dynamic pricing as shown in Table 4. 

 

 

 

 

 

 

 



46 

Fixed pricing Dynamic pricing 

Predefined prices based on static conditions Prices change according to market conditions 

List price 
Fixed prices for individual 

products or services  
Negotiation  

Price negotiated between two or 

more partners depending on 

negotiation skills and influence 

Product 

feature 

dependent 

Price depends on the number 

of value proposition features 

Yield 

management 

Price depends on inventory and 

time of purchase (usually used 

for perishable resources as hotel 

rooms and airline seats) 

Customer 

segment 

dependent 

Price depends on the type and 

properties of the customer 

segment 

Real-time 

market 

Price is established dynamically 

based on supply and demand 

Volume 

dependent 

Price is a function of the 

quantity purchased  
Auctions  

Price determined by outcome of 

competitive bidding 

      Table 4. Fixed and dynamic pricing. (Osterwalder and Pigneur 2010) 

 

3.7.6. Key Resources 

The key resources building block defines the essential assets and infrastructures that 

are required to run the business model. The resources are helping the organization to 

create, offer and deliver the value proposition properly. Besides, reaching out to 

customer segments, maintain customer relationships and earn revenues. Key 

resources types are various, they are defined according to the type of business. They 

can be physical, financial or human, can be rented or owned. For instance, a microchip 

manufacturer requires a large capital for constructing intensive production facilities, 

but a microchip designer needs are fewer, focusing more on human resources. 

(Osterwalder and Pigneur 2010) 

 



47 

Figure 15. Key resources building block. (Osterwalder and Pigneur 2010) 

 

Knowing the appropriate key resources that the business requires, helps to a plan a 

successful business model. Key resources can be categorized as follows: 

• Physical resources 

The physical resources are the assets such as buildings, manufacturing facilities, 

vehicles, systems, machines, Point-of-Sales (POS) and distribution networks. For 

example, Wal-Mart retailer mainly relies on physical resources such as global 

network of stores and related logistics infrastructure whereas Amazon.com retailer 

relies on extensive IT, warehouses and logistics infrastructure. (Osterwalder and 

Pigneur 2010) 

• Intellectual resources 

Intellectual category represents the innovative self-made resources such as brands, 

slogans, patents and copyrights, proprietary knowledge, partnerships and customer 

databases. These intellectual resources are the key factors, which make a strong 

successful business model. They are difficult to develop and require long time periods 

though when successfully implemented may grant a leveraging value to the business. 

Consumer companies as Nike and Sony are examples of entities that rely on brand as 

a key resource. Similarly, Microsoft and Apple rely on software and related 

intellectual property developed through many years.  



48 

• Human resources 

Human resources is a crucial factor that is required in every enterprise is the human 

factor despite the fact that human resources are particularly prominent in certain 

business models. They are crucial in knowledge-intensive and creative industries as 

in pharmaceutical companies, which primarily rely on human resources. Experienced 

scientists, researchers, skilled salespersons and decision-makers are examples of 

human resources needed. (Osterwalder and Pigneur 2010) 

• Financial resources 

Some business models facilitate financial guarantees or financial resources, such as 

cash, lines of credit or stock option pool. Telecom manufacturer Ericsson provides an 

example of financial resources leverage for the business model. Ericsson tends to 

borrow funds from banks or capital markets and use a portion of the proceeds to 

provide vendor financing for their prospective customers to win the orders. 

(Osterwalder and Pigneur 2010) 

3.7.7. Key Activities 

The key activities building block includes the most important actions that the 

organization should carry out to execute its business model. Every business model 

should have a number of activities to be carried out for successful operation. Similar 

to key resources, the key activities are required to offer a value proposition and reach 

out to customer segments. But key activities differ from key resources according to 

the type of business model. For example, Microsoft Company which is responsible 

for developing operating systems for PCs, has software development included in its 

key activities. On the other hand, PC manufacturer Dell has supply chain management 

included in its key activities. Consultation company like McKinsey can have problem 

solving included into its key activities. (Osterwalder and Pigneur 2010) 



49 

Figure 16. Key activities building block. 

 

Key activities can be classified into: 

• Production activities  

Production activities are the result of designing, manufacturing and delivering a 

product or a set of products in mass quantities and suitable quality. Production 

activities are prevailed throughout business models of manufacturers.  

• Problem solving activities 

Problem-solving type of activities are characterized by presenting intellectual 

solutions for customers’ problems. Consultancies, Hospitals and design businesses 

are typical business examples based on problem solving activities.  

• Platform/Network Activities 

Business models that possess platforms as Key Resource are also driven by platforms 

as key activities. Networks, matchmaking platforms, software and brands can be 

platform activities. For example, the business model of the eBay requires a continuous 

development of its platform: the eBay.com website. Same for Visa’s business model 

with Visa’s credit card transaction platform and Microsoft with its operating system 

platform. Hence, platform management, service provisioning and platform promotion 

are considered the key activities in this category. (Osterwalder and Pigneur 2010) 



50 

3.7.8. Key Partnerships 

The partnerships building block highlights the network of business partners such as 

suppliers and cooperative entities, which help in the realization of the business model. 

Recently, entities tend to form business alliances to optimize their business models, 

minimizing the risk and acquire resources.  

• Types of partnerships  

There can be four types of partnerships: 

- Strategic Partnership is a partnership between non-competitors. 

- Coopetition is a strategic partnership but between competitors. 

- Joint Ventures is an alliance to develop new businesses 

- Buyer-supplier partnership is the relation established to ensure the flow of 

supplies 

Figure 17. Key partnerships building block. (Osterwalder and Pigneur 2010) 

 

• Key partnerships motives 

The three motives for establishing alliances can be viewed as follows: 

- Optimization of business models 

It can be inefficient for an entity to own all resources by itself. Partnerships between 

buyer-supplier can optimize the allocation of resources and activities through 



51 

outsourcing some business needs and sharing infrastructure. The basic reason for that 

is to reduce costs. (Osterwalder and Pigneur 2010) 

- Minimization of risk 

Partnerships can reduce risk in competitive environments which are characterized by 

uncertainties. Usually, competitors can form partnerships in one specific area and still 

compete with each other. For example, the Blu-ray disc format is jointly co-developed 

by a group of world’s leading consumer electronics companies. The group cooperated 

to bring Blu-ray to the market yet individual group members are still in competition 

in selling their own Blu-ray products. (Osterwalder and Pigneur 2010) 

- Acquisition of resources 

As stated earlier, entities tend to extend their capabilities by relying on other firms to 

prepare particular resources or carry out certain activities. These alliances are 

motivated by needs to acquire knowledge, licenses or access to customers. For 

instance, smart phone manufacturers can outsource the operating system through 

licensing rather than developing a specific one to be owned by the manufacturer. 

(Osterwalder and Pigneur 2010) 

3.7.9. Cost Structure 

Cost structure is the ninth and the last building block of the Business Model Canvas 

that states all costs needed to execute the business model. Costs are one of the main 

drivers for creating and delivering the value, maintaining customer relationships and 

generating streams of revenues. These costs are normally derived after stating key 

resources, key activities and key partnerships. (Osterwalder and Pigneur 2010) 

 



52 

 

Figure. Cost structure building block. 

 

• Types of business models with respect to cost structure 

By default, costs should be subject to reduction at all instants and in every business 

model. Hence, there are two different types of business models with respect to costs. 

Business models can be extremely cost-driven such as budget airliners which are built 

around low cost structures. Others can be value-driven which target to maximize the 

value. (Osterwalder and Pigneur 2010) 

- Cost-driven 

Cost-driven models are the business models that focus on minimizing costs on the 

account of any other elements. That is because the model aims at creating and 

maintaining the leanest possible Costs Structure using low priced value propositions 

and extensive outsourcing. In addition, offering the value with minimized prices for 

budget customers creates a value proposition in itself i.e. the low-priced service with 

reduced advantages. (Osterwalder and Pigneur 2010) 

- Value-driven 

Value-driven models are the business model that aim at maximizing the value and its 

quality regardless any other factors including costs, as some companies are less 

concerned about costs implications compared to value creation. As examples, 

premium value propositions and high degree of personalized service usually are 



53 

complying with value-driven business models such as luxury hotels with their lavish 

facilities and exclusive services. (Osterwalder and Pigneur 2010) 

• Characteristics of cost structures 

- Fixed costs 

The fixed costs are the costs that always remain constant despite the number of 

services or activities offered. Such as salaries, rentals and fixed assets. Fixed costs 

can be very large in certain industrial areas such as in manufacturing industry. 

(Osterwalder and Pigneur 2010) 

- Variable costs 

Variable costs change proportionally with the volume of services or activities offered 

such as the annual or monthly budget appointed for purchasing new assets. For 

example, music festivals that are often characterized by high variable costs. 

(Osterwalder and Pigneur 2010) 

- Economies of scale 

When a business output increases, cost advantages arise and that is the economies of 

scale. For example, when a large company benefits from lower bulk purchase rates. 

In other words, when the average cost per unit decreases, then the business output or 

sales increase.  (Osterwalder and Pigneur 2010) 

- Economies of scope 

When the company decides to undergo scope’s expansion it adds more operation to 

provide extra products using the same assets that is the economies of scale. It usually 

occurs in large enterprises. For example, same marketing activities or distribution 

channels are used to support multiple products hence the average cost per unit drops 

as well. (Osterwalder and Pigneur 2010) 

 

 

 

 

 



54 

4. BUILDING NTC BUSINESS MODEL CANVAS 

NTC is the acronym for Nordic telemedicine Center, which is established in a joint project 

between Finland and Sweden. The area of operations is the Bothnia region found in both 

countries. The main administrative regions in Finland are the Vaasa region (Pohjanmaa) 

and the South Ostrobothnia region (Etelä-Pohjanmaa), In Sweden; the main region is the 

West Bothnia (Västerbotten). 

4.1. Customer Segments  

The Nordic telemedicine center has three physical locations called physical nodes, 

one is located in Seinäjoki (Finland) and two nodes are situated in Umeå (Sweden). 

These nodes are established to operate within the two regions of both partner 

countries, South Ostrobothnia (Finland) and West Bothnia (Sweden). Customer 

segmentation building block of the NTC Business Model Canvas is coinciding with 

the Diversified business model described in Chapter 3, because the Telemedical 

center is dealing with distinct groups of customer segments that have different needs 

and different problems e.g. monitoring vital signs of elderly patients with chronic 

diseases, providing consultancy and training to medical institutions’ students. In other 

words, the Telemedical center serves medical monitoring services to healthcare 

professionals and patients, testing and training plus consultancy to other entities or 

individuals. Inside the patients’ (Civil society) customer segment, customers can be 

further segmented according to their age structure because the services which are 

offered to elderly people differ from the services offered to children and so forth. Not 

only targeting healthcare professionals and civil society are sufficient but in NTC the 

target group can be extended to include also academic staff, researchers, enterprises 

and municipalities. 

Accordingly, customer segments can be categorized into: 

• Academia 

• healthcare professionals 

• Industry (Enterprises) 

• Municipalities 



55 

• Civil society 

The previous customer segments classification covers almost all types of prospective 

customers that are subject to the value proposition presented by NTC. Sections 4.1.1, 

4.1.2, 4.1.3, 4.1.4 and 4.1.5 include the results of the conducted study within both 

regions in Finland and Sweden to estimate the targeted group of each segment, in 

approximated numbers using governmental statistics and some computations. 

4.1.1. Academia 

As a customer segment, academia refers to the academic-oriented prospective 

customers. Academia includes university staff, researchers and higher university 

degree students who are interested in NTC value proposition.  

• Size of academia 

In order to calculate the percentage of the prospective academia customers in both 

regions of operation i.e. which are South Ostrobothnia (Finland) and West Bothnia 

(Sweden), the following keywords are being used to extract the required academia 

statistics from Finnish and Swedish annual governmental statistics, Tables 5 and 6 

show the results:  

 

Categories (South Ostrobothnia) Men Women Total 

23 Teaching professionals (Level 2) 1102 3154 4256 

231 University and higher education teachers (Level 3) 76 111 187 

232 Vocational education teachers (Level 3) 263 241 504 

235 Other teaching professionals (Level 3) 294 835 1129 

Total 1735 4341 6076 

Table 5. Academia statistics in South Ostrobothnia County, Finland. (Statistics Finland 

2015) 

 

Result: There are 6,076 persons referred to as ‘Academia’ in the region of South 

Ostrobothnia in Finland.  

 



56 

Categories (West Bothnia) Men Women Total 

2311 Professors 274 164 438 

2312 University and higher education lecturers 350 271 621 

2313 Research assistants 19 33 52 

2314 PhD Students 407 382 789 

2319 University and higher education teachers not 

elsewhere classified 
245 246 491 

2320 Vocational education teachers 228 146 374 

2351 Special teachers and special needs teachers 65 427 492 

2359 Teaching professionals not elsewhere classified 165 202 367 

Total 1753 1871 3624 

Table 6. Academia statistics in West Bothnia County, Sweden. (Statistics Sweden 2016) 

 

Result: There are 3,624 persons referred to as academia in the region of West Bothnia 

in Sweden.  

The percentages of academia with respect to the total population are approximately 

equal; 3.2% in South Ostrobothnia and 1.4% in West Bothnia. 

• Characteristics of academia 

Academic staff and researchers are characterized by being punctual, very specific and 

formal. They are mostly interested in things that are related to their academic and 

research scopes. Furthermore, they are in a continuous search for new and innovative 

ideas. That reflects on their personality and lifestyle hence the way of marketing NTC 

activities to this group of customers should comply with the same traits.  

4.1.2. Healthcare Professionals 

The healthcare professional customer segment is referring to the professional persons 

who are working within healthcare and welfare sections such as medical doctors, 

personal care workers, physicians, nurses and pharmacists. 



57 

• Size of healthcare professionals 

To gather the required information about the size of targeted healthcare professionals’ 

customer segment in both countries, the following keywords are used and Tables 7 

and 8 show the results: 

 

Categories (South Ostrobothnia) Men Women Total 

22 Health professionals (Level 2) 311 697 1008 

221 Medical doctors (Level 3) 213 245 458 

222 Nursing and midwifery professionals (Level 3) 17 195 212 

226 Other health professionals (Level 3) 68 220 288 

32 Health associate professionals (Level 2) 334 3312 3646 

321 Medical and pharmaceutical technicians (Level 3) 33 427 460 

322 Nursing and midwifery associate professionals 

(Level 3) 
155 2364 2519 

323 Traditional and complementary medicine 

associate professionals (Level 3) 
1 7 8 

325 Other health associate professionals (Level 3) 134 487 621 

532 Personal care workers in health services (Level 3) 434 4475 4909 

Total 1700 12429 14129 

Table 7. Healthcare professional statistics in South Ostrobothnia, Finland. (Statistics 

Finland 2015) 

 

Result: There are 14,129 healthcare professionals in the region of South Ostrobothnia 

in Finland.  

 

For Sweden, Table 7 shows the population categories in West Bothnia. 

 

 

 

 

 



58 

Categories (West Bothnia) Men Women Total 

1511 Clinical and operations managers in health care, level 1 37 64 101 

1512 Department and unit managers in health care, level 2 47 239 286 

2181 Environmental and occupational health and hygiene 

professionals 
21 23 44 

2182 Environmental and occupational health inspectors 34 67 101 

2211 Specialist physicians 375 353 728 

2212 Resident physicians 136 172 308 

2213 General medical practitioners 45 68 113 

2219 Other physicians 134 153 287 

2221 Professional nurses 217 1255 1472 

2224 District nurses 11 251 262 

2225 Psychiatry nurses 29 90 119 

2226 Nurses - Ambulance 33 22 55 

2227 Nurses - geriatric 53 405 458 

2228 Nurses - Intensive care 35 132 167 

2231 Nurses - operation 16 99 115 

2232 Nurses - children 6 95 101 

2233 Nurses - school 2 85 87 

2234 Company nurses 3 20 23 

2235 Nurses – radiology and other specialist nurses 60 322 382 

2272 Physiotherapists and occupational therapist 130 553 683 

2281 Pharmacists 2 61 63 

2283 Audiologists and speech therapists 2 62 64 

2289 Health professionals not elsewhere classified 14 39 53 

3424 Wellness consultants and health educators 5 14 19 

5349 Personal care workers in health services not elsewhere 

classified 
78 189 267 

Total 1525 4833 6358 

Table 8. Healthcare professionals statistics in West Bothnia, Sweden. (Statistics Sweden 

2016) 



59 

 

Result: There are 6,358 healthcare professionals in the region of West Bothnia in 

Sweden.  

The percentages of healthcare professionals with respect to total population in both 

regions are approximately equal; 7.4% in South Ostrobothnia and 2.5% in West 

Bothnia. 

• Characteristics of healthcare professionals 

Nordic healthcare professionals are characterized by proficiency, occupancy and 

decency.  Most of the time their schedule is congested with fixtures. Yet they are very 

much interested to check new technological solutions that can be adopted into the 

medical and healthcare fields. Therefore, reaching out to this type of customers should 

be either through their working institutions or by private contact upon prior request. 

4.1.3. Enterprises 

Enterprises customer segment represents the corporate type of customers that can 

potentially benefit from NTC activities and services. In the long run, these enterprises 

can be more likely to become future partners.  

• Size of Enterprises 

The numbers of existing enterprises in each region are described in Table 9. 

 

 South 

Ostrobothnia 

West 

Bothnia 
Total 

Total number of enterprises  

(All fields of industry) 
43215 37740 80955 

Number of enterprises 

(Healthcare industry only) 
551 672 1223 

Table 9. Enterprises statistics in South Ostrobothnia and West Bothnia. (Statistics Finland 

2013) and (Statistics Sweden 2015) 

 



60 

Result: There are 551 healthcare enterprises in the region of South Ostrobothnia in 

Finland and 672 in the region of West Bothnia in Sweden.  

The percentage of the operational healthcare enterprises with respect to the total 

number of enterprises within all fields of industry in both regions are approximately 

1% of enterprises in each region. 

• Characteristics of healthcare enterprises  

Nordic countries are characterized by welfare and high-quality healthcare. For that, 

they assign large expenditure towards healthcare that grows steadily every year. 

Hence, it is normal that the number of enterprises that are interested in healthcare 

industry grows proportionally to the assigned expenditure as well. Moreover, small-

sized startups are founded to serve the same scope eventually that widens the 

technological innovative solutions scope by the same pace.  

4.1.4. Municipalities 

In Finland, there are 17 municipalities within the South Ostrobothnia region. They 

are: Alajärvi, Evijärvi, Lappajärvi, Vimpeli, Alavus, Kuortane, Soini, Ähtäri, 

Ilmajoki, Kauhava, Kurikka, Lapua, Seinäjoki, Isojoki, Karijoki, Kauhajoki and 

Teuva. 

On the Swedish side, there are 15 municipalities within West Bothnia region. They 

are: Åsele, Bjurholm, Dorotea, Lycksele, Malå, Nordmaling, Norsjö, Robertsfors, 

Skellefteå, Sorsele, Storuman, Umeå, Vännäs, Vilhelmina and Vindeln. Moreover, 

the decision makers are usually the country council staff.  

• Characteristics of municipal administrations 

Decision makers at municipalities are governmental representatives who are 

responsible for carrying out their municipalities (cities) affairs, to ensure the order, 

prosperity and welfare of the region. Thus, they are highly interested in conducting 

useful activities that will result in welfare and overall development of their area of 

operation. Since NTC services and activities are matching that scope, therefore 

contacting municipal decision makers for partnership is crucial and should be done in 

a professional and formal way.  



61 

4.1.5. Civil Society (Mass Market) 

Civil society customer segment refers to all population with all its diverse categories 

and age structures within the two regions. Indeed, not all population is targeted, but 

specific age groups with certain characteristics are among the interests of NTC, such 

as elderly people and pediatrics.  

• Size of civil society 

The statistics shown in Table 10 and Figure 18 are portraying the population 

categories of both regions. By utilizing them, customer segmenting can be more 

realistic and revenue verses cost calculations are becoming more legit.  

 

Table 10. Age structures of South Ostrobothnia and West Bothnia populations. (Statistics 

Finland 2017) and (Statistics Sweden 2017) 

 

Result: shown in Figure 18. 

Age group 
South Ostrobothnia West Bothnia 

Category 
Men Women Men Women 

0-4 years 5241 5080 7667 7084 Pediatric 

5-17 years 14989 14166 19561 18633 Underage 

18-54 years 41439 38496 66105 61213 Adults 

55-64 years 13883 13614 15812 15647 Older adults 

65-99 years 19913 24994 26575 29938 
Elderly people 

100-  years 12 33 7 36 

Total 95477 96383 135727 132551 

Total  

per region 
191860 268278 



62 

 

 

Figure 18. South Ostrobothnia and West Bothnia population age groups 

 

Both charts are approximately similar. The percentages of elderly people who are 

exceeding 65 years old are quite high, 24% in South Ostrobothnia and 21% in West 

Bothnia. Meanwhile, percentages of children and infants who can be referred to as 

pediatrics are 5% and 6% respectively.  

5%

15%

42%

14%

24%

South Ostrobothnia 

Pediatrics Underage Adults Older adults Elderly people

6%

14%

47%

12%

21%

West Bothnia 

Pediatrics Underage Adults Older adults Elderly people



63 

• Characteristics of civil society 

- Entire population 

Both regions have some common insights about the structure and characteristics of 

the population. In South Ostrobothnia, Finnish language is the most spoken language 

across the region. As a consequence, all NTC publications and marketing campaigns 

within the region should be primarily in Finnish language. Respectively, in West 

Bothnia, Swedish language is the most spoken language in the region. Therefore, it is 

recommended to carry out NTC activities, marketing campaigns etc. primarily in 

Swedish. Moreover, since English is widely spoken in both countries, it can be 

considered while marketing to international residents. Both Finnish and Swedish 

citizens’ daily routines are quite recursive and punctual so that NTC marketers should 

specify best timings, ways and places to inform them about NTC activities.  

- Pediatrics 

Pediatrics is the title shortened for medical major or specialists who operate on 

children aged from zero to 4 years old. Infants during delivery can experience birth 

complication as it was recorded that nearly 1% of infants need support because of 

complication. Sweden and Denmark are the Nordic Countries with the largest 

percentage of autism. It was found that nearly 72 out of 10,000 of children from 

pediatric age group are autistic in Sweden while the ratio is decreased to 68 in 

Denmark making them the 3rd and the 4th countries with highest rates of autism 

worldwide (WorldAtlas.com, Rolando Y. Wee April 2017). In Finland, nearly 3 out 

of 96 children from pediatric age group succumb to death suffering from childbirth 

complications, neonatal problems or skeleton impairments that require special and 

emergent medical attention. NTC services include childbirth complications 

emergency support and can be extended to cover other pediatric urgent situations. 

- Elderly people 

Among different age groups, the elder people need special care most often. 

Especially, elderly people with chronic diseases and memory disorder require regular 

monitoring and continuous medical attention. It was found that in 2015 in South 

Ostrobothnia region, nearly 333 nearly 333 out of 2,155 deaths are caused by 



64 

dementia and 65 deaths caused by accidental falls. That are almost 15.5% and 3% of 

deaths are because of dementia and accidental falls respectively as these causes are 

abundant in elderly people. Furthermore, according to Statistics Finland in 2013, 2% 

of people aged 65 – 74 years old had difficulties in getting into and out of bed and 6% 

had difficulties to move outdoors. Moreover, 11% of Women aged 75 – 84 years old 

had difficulties in getting into and out of bed and 25% had difficulties to move 

outdoors. 

4.2. Value Propositions 

NTC as a telemedicine center project was established to serve a main value of 

improving healthcare and welfare of the civil society in the targeted research region. 

Starting from that main mission of the project, NTC value propositions can be further 

broken down into four values to be served to the society, as follows: 

• Education and awareness 

• Providing telemedical solutions 

• Guidance and consultancy  

• Facilitation and catalyzing innovation 

4.2.1. Education and Awareness 

Education and awareness is the value proposition with main goal to inform healthcare 

individuals and civil society people about the NTC technologies. Education and 

awareness can be delivered through conducting regular seminars and courses. The 

value proposition of education and raising awareness should be a recurring and a 

continuous long-term process carried out by the center regularly to spread the 

telemedical knowledge and raising awareness about the risks of exposing people with 

chronic diseases to an unmonitored daily life. Especially the elderly ones.  

4.2.2. Providing Telemedical Solutions 

Providing telemedical solutions value proposition aims at serving the qualified tested 

telemedical solutions to enterprises and individuals alike. Each of the NTC physical 

nodes have showroom, that consists of tested homecare equipment and monitoring 

devices. Enterprises that operate in the regional healthcare industry can utilize NTC 



65 

to incubate and develop further the telemedical services they are planning to offer to 

their own clients. In addition, they can use the center’s virtual telemedicine network 

to establish a communication between medical institutions, patients and vice versa. 

The same applies for civil individuals who can use center facilities to conduct a virtual 

medical visit or purchase telemedical monitoring devices. 

4.2.3. Guidance and Consultancy 

Guidance and consultancy value proposition is an intellectual yet a non-tactile value, 

for it aims at serving the telemedical experience in forms of guidance and consultancy 

to beneficiary customers. Enterprises, entrepreneurs and healthcare startups can 

consult with NTC experts and IT technicians to gain experience about eHealth service 

delivery, matching devices and equipment, expected costs and revenues, dealing with 

different customer attitudes and managing the center facilities. Hence, consultancy 

beneficiary customers can adjust their business models accordingly. 

4.2.4. Facilitation and Catalyzing Innovation 

Facilitation and catalyzing i