What are the Leading Transformers and Disruptors for What are the Leading Transformers and Disruptors for the Global Medical Device Industry?the Global Medical Device Industry?
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Today’s Presenter
Venkat Rajan
Industry Manager -Advanced Medical Technologies
Frost & Sullivan
•Oversees analyst team charged with tracking the advanced medical
technologies industry, spanning medical devices, medical imaging, and
patient monitoring.
•Provide market intelligence solutions to help clients across the supply
chain spectrum to identify market opportunities and develop strategies
tailored to their business goals.
•8 + years of market intelligence gathering and custom consulting
experience
Five Signs A Medical Technology Company Might Need to Reinvent its Business Model
Eroding Customer Value Proposition
Profit Model Under Pressure
•Business exposed to technology obsolescence, due to new advances.
•Customers view its product/services as commoditized.•Customers see limited differentiation between available devices.•Diminished customer enthusiasm for new product upgrades.
•Declining YOY margins.•Competitors going out of business, consolidating, exiting market.•Significant internal cost cutting necessary to maintain viability.
Market Disruptors •Business exposed to technology obsolescence, due to new advances.•New technologies capable of providing comparative product/service value either cheaper, faster, simpler, or to a broader addressable customer base.
Market Disruptors on the Horizon
•High employee turnover rates, due to career apathy.•Strategy focused on maintenance as opposed to expansion.•Team slow to adapt and/or innovate.
Internal Infrastructure Deteriorating
•Limited VC/investment buzz for market and its future.•Limited academic curiosity and interest in advancement.•Public companies struggling to maintain stock price.
Investment Dollars Flowing in
Opposite Direction
Three Big Predictions for 2013
2
Patient influence in treatment selection magnified due to, increasing
access to information and greater shifts in financial burdens. The launch of
health exchanges and rollbacks in employer covered plans could lead to
1Hyper pressurized cost containment environment is likely to accelerate
deeper cost cutting measures from companies adjusting to realities of the
new market place.
Source: Frost & Sullivan analysis.
2health exchanges and rollbacks in employer covered plans could lead to
greater striation of coverage into distinct tiers.
3
Emerging market needs drive decision making for companies around M&A
strategy and product development. In the past complications of the HC
system, financial resources, and on the ground infrastructure required;
prevented companies from fully investing in emerging market strategies.
Core Segments Under Pressure
$342 B Global Medical Technologies Market Sector Share
Medical Devices Market: Segmentation by Product Class, Global, 2012
Ortho
14%
Cardiology
Other (Including:
Durable Medical
Equipment,
Hospital
Supplies,
Consumables)
29%Treatment
Other
28%
Note: All figures are rounded. The base year is 2012. Source: Frost & Sullivan analysis.
