The robotic surgery market is expected to grow substantially across the globe. Reasons for this predicted growth include the prevalence of chronic diseases, and the rising demand for minimally invasive surgeries. Medical instrument companies such as Intuitive Surgical, Johnson & Johnson, Medtronic, and Stryker are competing for market share in this industry by investing in continued innovation, collaborating with companies that delivers complementary products and services - such as the collaboration between Johnson & Johnson (instrumentation) and Alphabet (machine learning and data analytics) (Rachal, 2019) - and merging with former competitors (Computer Motion and Intuitive Surgical).

The positive robot assisted surgical systems market outlook is attracting growing investment in robotic surgery systems. Regional markets include North America, Europe, Asia-Pacific, and Latin America. Even though North America is viewed as the market leader due to continued innovation, investments in other regions are growing. Several robotic surgery system companies have been founded in the European region. The Asia Pacific region has seen an increase in healthcare industry investments creating a growing customer base (Medgadget, 2021).

One of the challenges faced by robotic surgery companies is that robotic surgery systems could take several years to design and develop. In addition, clearance is required from relevant regulatory bodies before companies can introduce these machines into the market.

One of the first examples of robotics in surgery was a system called Robodoc. Introduced in the late 1980s (George et al. 2018), Robodoc was an orthopaedic image-guided system used to perform prosthetic hip replacement. It was the first system to receive formal approval from the USA's Food and Drug Administration (FDA) (Lane, 2018). Other systems soon followed, including the FDA approved AESOP followed by ZEUS, both from Computer Motion. What set the AESOP and ZEUS systems apart was that surgeons could use voice command to position the laparoscopic camera system. Computer Motion was one of the companies dominating the robotic surgery market during the 1990s. In 2003, Computer Motion merged with Intuitive Surgical (Intuitive, 2003).

Intuitive Surgical captured a significant portion of the medical device market since the launch of its Da Vinci Surgical System in 1999 (Kent, 2020). The system was one of the first robotic-assisted surgery systems cleared for use by the FDA (Intuitive, n.d.). The system has been used in more than 8.5 million procedures in 67 countries. As of May 2021, the market capitalisation of Intuitive Surgical amounts to US$101.49 billion (Nasdaq, n.d.). In addition, the company declared total revenue of US$4,358 million for the 2020 financial year.

The Da Vinci Surgical System is used in robotic-assisted surgeries. A surgeon seated at a console uses hand movements to guide the surgical instruments performing the surgery on a patient. The surgeon views the procedure via a high-definition 3D video capturing the surgical area. Patients reap the benefits of robotic surgery as advantages include a reduction in the sizes of incisions and associated blood loss (Medicine@Yale, 2007). However, the cost of the systems increases the cost of the procedures.

Although Intuitive Surgical is the market leader in the robot assisted surgical systems market, globally companies are jostling to capture some of the value in this expanding global market.

Whereas Intuitive Surgical focuses on general surgery, companies such as Medtronic and Stryker are differentiating themselves by offering robotic-assisted systems that perform specialist procedures. These include robotic joint replacement, and brain and spinal surgery.

In addition, Da Vinci's patents are expiring which opens the market to new competitors.

Questions:

1. How did Intuitive Surgical capture value in the industry, and what were the enabling factors that allowed them to?
2. How did Intuitive Surgical gain their competitive advantage in the market?