As I was facing up to two of my pet peeves: tightly packed crowds and rain, I had to remind myself of why I had traveled to Dusseldorf, Germany.
The Innosurg
division of Kenmold, one our most trusted injection molding vendors in
China, had invited us to exhibit in their booth at what was in effect
two combined trade fairs. Medica, billed as the world’s largest medical
meeting, was being held alongside Compamed, one of the largest medical
supplier conventions. We were pleased to have the opportunity to share
our medical device design capabilities, talk about 3-D printing, and
spread the word on simulation-driven product development with new
audiences.
It was also a
great learning experience in terms of the business climate around the
medical and health care industry. Here’s a brief summary of my most
important takeaways:
Differentiation of your product is critical
There is a lot
of competition out there. No really. More than you think. Counting on
price or brand is not enough anymore. Globalization, the Internet, and
new technology have lowered the barrier to entry for competitors. And
those competitors can easily find and reach out to your customers. You
have to have something of significant value to offer – not just better
but a lot better. And by the way, outstanding customer service is no
longer a differentiator you can count on. To survive you have to adapt
and offer more. Things like quality, performance, robustness,
interoperability, system integration, and features are needed to stand
out.
China is here
Chinese
companies are everywhere. They are confident and they know things have
changed. It’s no longer about low cost and low quality. The domestic
market for medical devices in China is booming, and they are not ceding
it to imports. Some predictions put China ahead of Japan by 2018, second
only to the U.S. market.
The Chinese
companies that will succeed will take what they have learned through the
years as manufacturers and emerge as device developers and component
suppliers that offer a lot. Engineers and managers who spent the
formative years of their careers working for large Western original
equipment manufacturers are leaving and starting their own companies or
joining the staff of local firms, the same way new companies are started
all the time in the U.S. Established companies need to learn to work
with Chinese firms as partners, just as we have learned to work with
European and Japanese firms. Large companies are mostly doing this
already.
Consumers in developing countries looking for options
One reason for
the growth of Chinese suppliers is they have adapted to the growth of
the medical business in emerging markets. They also understand these
countries will not or cannot pay what developed countries pay for health
care. The bottom line is developing countries are looking beyond the
West for higher value options. Not just cheaper, but within their budget
and greater value for their investment. Markets that traditionally
would have gone to an established global supplier are now up for grabs.
There are many technologies you may not even know about
Mechanical
product and device design consists largely of applying a variety of
technologies to solve some sort of problem. That technology can be a
unique chemical reaction, a material with just the right properties, a
chip with the proper feature set, or a finely crafted assembly of
injection-molded plastic.
As evidenced at
these shows, the amount of technology available to medical product
developers is staggering. The problem these days is when we run into a
need, we search for a solution on the Web, but we usually only search
for things we are aware of. After walking mile after mile of this show, I
walked away with the knowledge of a much wider and broader range of
solutions than I came with.
Business is still about trust
While standing
in front of our booth, waiting to pounce on innocent prospects, I passed
the time watching the component suppliers around me do business. Each
of them did business differently. Some bargained like old market
traders, some were all about relationships, and others were about the
sales process. Over four days I saw deals happen, and I saw them fall
apart. Across all those transactions it was obvious that successful
deals only happened when both the buyer and seller developed trust.
As I jumped into
yet another packed trolley on the way home, I was standing next to an
Arab female doctor in a Hajib talking to a colleague from Norway in
German while four Israeli plastic tube salesmen sat in chairs discussing
something in Hebrew. Behind me, a British salesman was helping two
Chinese saleswomen figure out which stop they needed to use to best
reach their hotel. With the exception of those illusive Antarticans,
there were attendees from every continent in the world. It reinforced
that this was a true “international” conference and the medical device
market is now incredibly dynamic and overwhelmingly global.
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