The growth opportunity for medical OEMs is large and ever-growing, with emerging markets set to account for a third of the industry’s global revenue by 2022*. Greater income per capita in developing countries, as well as increased GDP, has seen patients become more proactive about their health. The result is that patients can afford better treatment plans and higher quality devices.
However, for one reason or another, sometimes medical device manufacturers do not fully realize the commercial opportunity that this brings. One such reason is that medical OEMs have focused on importing technologies created for existing markets, rather than creating and adapting products to meet the unique needs of each local market. While this approach may solve short-term ‘wins’ in emerging economies, these may be at the cost of long-term success.
Don’t Overlook Regional Dynamics
When existing technologies are transferred directly into emerging markets, manufacturers tend to overlook regional dynamics. These might include local regulatory requirements and physician training, as well as municipal infrastructure.
It is often said that emerging markets respond better to more minor and incremental technological advances. For instance, if the associated physician training doesn’t involve a steep learning curve relative to existing practice, any technology will be instantly more applicable.
For these reasons, this approach can be far more successful than the introduction of technological step changes which are only likely to be of use to a reduced audience.
Inhibiting Growth by Minimizing Risk and Cost
Of course, introducing existing technologies and products and offers an appealing path to market – the development of new products often necessitates a significant injection of capital. Despite this, even though this tactic minimizes cost risk for OEM, it ultimately provides a non-ideal solution to local requirements.
The introduction of forward-thinking products, in practice, may provoke a response from the local network, but this will largely remain solely in such communities where significant investment has already been seen. In areas where the technologies, infrastructure and resources exist to absorb and embrace the product, it may be a success. However, the impact thereof is likely to be restricted to a tiny portion of the total population, thereby inhibiting OEM growth.
Prioritizing Custom Product Creation
As an alternative to transplanting existing technologies into new markets, it is possible that medical OEMs may enjoy greater degrees of success if they are to adopt a strategy of localized product development, which concentrates entirely on the emerging market’s needs.
Indeed, this would reflect the OEMS innovation pathway for developed markets, wherein products are developed after a need is identified, and done so according to the regulatory, reimbursement, and pricing environment. Why should our view of emerging markets differ?
Invest in the Supply Chain
As in developed countries, however, localized product development is not a strategy which OEMs can pursue in isolation.
Closely working with regional component suppliers can offer substantial benefits by launching a secure, localized cost base.
It remains to be seen whether OEMs can fully explore these developing market opportunities without being prepared to invest effort and time in the supply chain. Those who do will enjoy the satisfaction of offering discrete and unique solutions, customizable for local needs, as well as being more likely to attain market growth and long-term success.
*Source: BMI MedTech, Evaluate MedTech, BCG analysis
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History of Zeus Inc
Frank P. Tourville, Sr. worked in the polymer extrusion industry for ten years before creating Zeus from a desire to “do it better.” While Zeus quickly established itself as a world leader providing high-performance polymer extrusions and solutions, their rapid, sustained growth is rooted in a commitment to improving industries and lives.
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Zeus touches just about every major industry in the world. Their products make everyday life better, faster, safer. You’ll find Zeus technology in your backyard grill and automobile. You’ll find them in the aircraft taking you where you need to go and the hand of the surgeon saving your life. Zeus' research facilities are surpassed only by the enthusiasm and commitment of our people.
Why Choose Zeus As An Innovation Partner?
When your product and reputation are on the line, you want the best. No other company in the world delivers the consistency, dependability and unrivaled innovation of Zeus.
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