Overview of basic prinicpals of strategic planning for medical devices.

1. STRATEGIC SALES AND MARKET PLANNING:
IN TODAY’S ECONOMY
Focus on Medical Devices

2. THE MEDICAL DEVICE INDUSTRY
• Definition: The United States medical
device manufacturing sector is a highly
diversified industry that produces a range of
products designed to diagnose and treat
patients in healthcare systems worldwide.
Medical devices differ from drugs in that
they do not achieve their intended use
through chemical reaction and are not
metabolized in the body.

3. THE MEDICAL DEVICE INDUSTRY
• Layperson’s Terms: Medical devices range
in nature and complexity from simple
tongue depressors and bandages to
complex programmable pacemakers and
sophisticated imaging systems ( i.e. MRI’s)

4. THE MEDICAL DEVICE INDUSTRY
• The borders are fading:
• Bio-sciences
• Drug delivery devices
• Drug coated devices: i.e. Cardiac Stents
• Increased complexity of FDA approvals

5. THE MEDICAL DEVICE INDUSTRY
• Worldwide sales in excess of $265 Billion
• US represents app. 40% of volume
• US exports approximately $35 Billion
annually
• Industry employs over 350,000 people in
US
• 73% of companies are under 20 employees
• Approximately 70% are privately owned

6. THE MEDICAL DEVICE INDUSTRY

7. THE MEDICAL DEVICE INDUSTRY

8. THE MEDICAL DEVICE INDUSTRY
• US Industry Leaders:
• Medtronic®
• GE Healthcare Technologies®
• Johnson & Johnson®
• St. Jude®
• Boston Scientific®
• Baxter®
• Becton Dickinson ®
• Abbott Labs®

9. THE MEDICAL DEVICE INDUSTRY
THE MYTH
“The Healthcare Industry is
Recession Proof.”

10. IMPACT ON HEALTHCARE TODAY
• FDA Incompetency:
• Extremely slow approval rates
• 2 to 4 times longer
• Increased cost of submissions
• Increased cost of lost opportunity
• Difficulty in attracting new investors
• VC’s expect 30% return in 3 years

11. IMPACT ON HEALTHCARE TODAY
• Economic factors:
• Unemployment
• Jobless rate does not portray true picture
• Salary reductions
• Increased healthcare delivery costs
• US made products cost more in the US than abroad
• Increased insurance costs and co-pays
• Decrease in research funding
• Private healthcare system is unaffordable for
over 20% of population

12. IMPACT ON HEALTHCARE TODAY
• Government – US and International
• Fear of potential Obama Care
• Reduction in reimbursements
• Facility and physician
• Price controls
• Increased regulatory hurdles
• Increased trade restrictions
• Global deficits

13. IMPACT ON HEALTHCARE TODAY
• Other
• Purchasing groups and hospital associations
• Off-shore manufacturing and increased foreign
imports
• Cost and removal of FDA hurdles
• Public company’s focused on profits at expense
of:
• R&D
• Sales, marketing, advertising and infrastructure
• Aging population
• Decreased or flat elective surgery market

14. WHERE ARE INCREASES COMING FROM
• Exports up by approximately 10%
• Price increases
• New products
• New procedures
• Increased volumes in basic care
• Increased average patient age

15. WHY PLAN STRATEGICALLY?
• Concrete direction for 2-3 years
• N.B. Must be flexible to changing conditions
• Basis for annual tactical plan
• Necessary for analysts and potential
investors
• Direction for R&D
• Allocation of resources
• Elicits cooperation between departments
• Roadmap for sales and marketing efforts

16. WHY SALES AND MARKETING IN UNISON?
• Translate marketing to English
• Recognizes key factor “The Customer!”
• Buy-in from sales organization
• Reality checks
• Coordinates activities
• Saves effort and financial investment
• TWO HEADS ARE BETTER THAN ONE!

17. ELEMENTS OF A SUCCESSFUL STRATEGIC PLAN
• Know the market
• Know the regulatory environment
• Know the competition
• Know the customer(s)
• Know the economy
• Know the investors
• Know the realistic capabilities and resources
• Know executive management expectations
• Be Creative

18. ANALYSIS
• Market share
• Realistic view of domestic and global share
• Often difficult due to lack of true statistical
information
• Many reports are a small slice of customer base
• Skewed due to introspective mentality
• Market Trends
• New procedures
• Customer profiling
• New Products

19. ANALYSIS
• Competition
• Existing and evolving
• Changes i.e.
• New products, R&D, mergers, acquisitions,
promotional perspectives, management and
customer base
• Regulatory changes
• Economic climate
• Health Care Systems and Reimbursement

20. ANALYSIS
• Internal
• What is company’s driver?
• R&D, manufacturing, sales, marketing, finance, other
• What are strengths, weaknesses, opportunities
and threats?
• Products
• Pipeline
• Departmental
• Financial
• External forces

21. PROJECTIONS
• Realistic estimate of P&L for next 2-3 years
• Sales and market share increases
• What is needed to be successful
• Products
• Promotional activities
• Organizational structure
• Mergers, acquisitions and/or strategic alliances

22. A NEW VIEW
• Marketing:
• Avoid marketing myopia
• Look further than 1 year’s sales and profits
• Recognize and/or create trends
• Beware of internally focused statistics
• Listen to “constructive” feedback from sales – they are the
voice of the customer
• Realign resources
• Are advertising dollars being allocated in most efficient
manner?
• Frequency versus placement
• Does social media marketing apply strategically?
• Review sales and promotion items
• Exhibit costs versus educational seminars
• Entertainment versus “lunch and learn”

23. A NEW VIEW
• Marketing Cont’d
• Sourcing new products
• Strategic Alliances
• Avoid “Not Invented Here” Mentality
• University R&D Programs
• Listen to the customer
• It’s free!
• Stay close to R&D, Regulatory and Manufacturing
• Foreign Outsourcing

24. A NEW VIEW
• Marketing Cont’d
• Attempt to establish MKTG as the hub of
communication and the driving force of the
organization Executive
Finance R&D/Regulatory
MKTG
Service Manufacturing
Sales

25. A NEW VIEW
• How
• Become the resource for information
• Take the time to participate on development
teams
• Lobby with the customer and KOL’s
• Lobby with management
• Make finance a “friend”
• Take risks

26. A NEW VIEW
• Sales
• Relationship selling is a dying art!
• Develop strategic/consultative selling approach
• Know your customers’ “business”
• Create value to the customer
• Practice management
• Facility efficiencies
• Patient attraction
• Patient flow
• Education on new procedures and products
• Latest IT and web modalities
 EMR and Imaging systems
 Social Media Marketing

27. A NEW VIEW
• Sales Cont’d
• Encourage “positive”, open communication with
internal customers
• “Do not” accept unrealistic plans..if possible
• Provide relevant data
• Forecast regularly and meet forecasts
• Encourage dialogue with
• Marketing
• Manufacturing
• Service
• R&D

28. A NEW VIEW
• Sales Cont’d
• Invest in education of sales personnel
• Products and procedures
• Value added services
• New selling techniques
• Improved IT skills
• Institute positive programs
• CRM programs that benefit the sales process
• Incentive programs that recognize penetration and
retention

29. A NEW VIEW
• Sales Cont’d
• Maintain a healthy balance of experience and
new blood
• Plan development and career advancement
• Target long term “difficult” new accounts
• Project planning

30. A NEW VIEW
• Coordination with other departments
• Initiate communication with all departments
• Finance, executive, R&D and manufacturing
• There is a strong competitiveness for funding and attention
• Marketing and sales are closest to the “real life”
• Be open to new ideas, no matter how mundane or off
direction
• Be active on committees
• Lead with facts, figures and market input
• Use KOL’s

31. A NEW VIEW
• Final Notes
• You are the future of the organization
• There is no right or wrong answer
• Be creative and have an open mind
• Leave your ego at home
• Lead by example
• Politics is wrong but a fact of life.

32. BIBLIOGRAPHY AND REFERENCES
• Medical Device Manufacturers Association, Annual Report, 2011
• Manufacturing: Industry Series: Detailed Statistics by Industry for the United States;
U.S.
• Department of Commerce, Bureau of the Census, 2007.
• The Lewin Group, State Impacts of the Medical Technology Industry, prepared for
Advanced
• Medical Technology Association 2008
• Manufacturing: Industry Series, Id.
• Source: 2010 data compiled from tariff and trade data from the U.S. Department of
Commerce
• and the U.S. International Trade Commission.
• http://ita.doc.gov, Medical Devices Industry Assessment
• www.fda.gove, How To Market Your Medical Device, 2012
• Yahoo Finance, Medical Device Market Looks to Innovations to Counter Cost Cuts,
2012
• Medical Device and Diagnostic Industry. Market Trends, 2012
• Zack Investment Research, Medical Device Industry Outlook, 2011
• Advanced Medical Technology Association (AdvaMed),
• Medical Device Manufacturers Association (MDMA),
• Medical Imaging Technology Association (MITA),