The development prospects of medical device companies seem optimistic, but the unsustainable medical costs and the participation of new competitive forces indicate that the future pattern of the industry may change. Today’s manufacturers face a dilemma and risk being commoditized if they fail to establish themselves in an evolving value chain. Staying ahead is about delivering value beyond equipment and solving medical problems, not just contributing. The Medical Device Industry in 2030 – Be Part of the Solution, Reshape Business and Operating Models, Reposition, Reshape Value Chains
Gone are the days of “just making equipment and selling it to healthcare providers through distributors”. Value is the new synonym for success, prevention is the best diagnosis and treatment result, and intelligence is the new competitive advantage. This article explores how medical device companies can succeed through a “three-pronged” strategy in 2030.
Medical device companies should take a serious look at their existing organizations and reshape their traditional business and operating models for future growth by:
Incorporate intelligence into product portfolios and services to positively impact the treatment process and connect with clients, patients and consumers.
Delivering services beyond devices, intelligence beyond services – a real shift from cost to intelligence value.
Investing in enabling technologies—making the right decisions to support multiple concurrent business models tailored to customers, patients, and consumers (potential patients)—and ultimately serve the organization’s financial goals.
re-locate
Prepare for the future by thinking “from the outside in”. By 2030, the external environment will be full of variables, and medical device companies need to reposition in the new competitive landscape to deal with disruptive forces from:
New entrants, including competitors from unrelated industries.
New technology, because technological innovation will continue to outpace clinical innovation.
New markets, as developing countries continue to maintain high growth trends.
Restructure the value chain
The value chain of traditional medical devices will evolve rapidly, and by 2030, companies will play a very different role. After reshaping their business and operating models and repositioning, medical device companies need to rebuild the value chain and establish their place in the value chain. Multiple ways of “building” a value chain require companies to make fundamental strategic choices. It is now evident that manufacturers will continue to connect directly with patients and consumers, or through vertical integration with providers and even payers. The decision to rebuild the value chain is not intuitive and will likely vary according to a company’s market segment (eg device segment, business unit, and geographic region). The situation is further complicated by the dynamic evolution of the value chain itself as other companies attempt to re-architect the value chain and achieve strategic goals. However, the right choices will create enormous value for end users and help companies avoid a commoditized future.
Industry executives need to challenge conventional thinking and reimagine the role of business in 2030. Therefore, they need to re-architect their current organizations from being a value chain player to providing solutions for sustainable healthcare costs.
Beware of being caught in a dilemma
Unbearable pressure to upend the status quo
The medical device industry is expected to maintain steady growth, with annual global sales forecast to grow at a rate of more than 5% per year, reaching nearly $800 billion in sales by 2030. These forecasts reflect the growing demand for innovative new devices (such as wearables) and services (such as health data) as the habitual diseases of modern life become more prevalent, as well as growth in emerging markets (especially China and India) The huge potential unleashed by economic development.