Medical Devices

 

Client

The sutures division of a medical devices company with dominant market-share.

The Mandate

The client wanted to understand how defendable was its current market position and whether its market share could increase.

Approach

We structured the mandate into three parts:

1) Understand the market landscape to identify key shifts in the competitive positions
2) Identify influencers and decision-makers in the purchase process along with their respective formal and informal roles in that process
3) Interview them to understand sources of strength for the client as well as key factors shaping their choice going forward

The market was not well-covered and thus required a heavy emphasis on primary research. It involved numerous discussions with stakeholders in the value chain (e.g. competitors, suppliers, distributors) to understand the shifts in relative market shares for the major competitors. Based upon these interviews, we calculated that the client had begun to lose market share over the recent three year period. In addition, these interviews indicated that the client’s products generated strong brand loyalty amongst surgeons because the products were perceived as best-in-class. However, hospital administrators had different evaluation criteria and frequently believed that the client’s price premium was unjustified compared to other brands. In some cases, administrators were able to replace the client’s products for lower-cost substitutes that met minimum quality standards. Our assessment was that the client would need to act aggressively to prevent further erosion in market share and thus solidify its position to enable any future growth

Results

Based upon our findings, we advised the the client to segment the market into two distinct groups; performance and price-sensitive.  For the performance group, the client stepped up sales and marketing efforts to maintain the brand strength, which generated a 2% market-share gain. For the price-sensitive segment, the client is now working on developing a “value” portfolio to increase its aggregate market share and reduce the risk of profit erosion

 

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