A N A L Y S I S O F T H E B I O M E D I C A L I N D U S T R Y

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Information about A N A L Y S I S O F T H E B I O M E D I C A L I N D U S T R Y

Published on January 28, 2008

Author: saverio4zanetti

Source: slideshare.net

ANALYSIS OF THE BIOMEDICAL INDUSTRY: THE MIRANDOLA DISTRICT CASE

Definition of biomedical three different business units: pharmaceutical biotechnologies medical device technology industry (MDTI) (Mirandola)

three different business units:

pharmaceutical

biotechnologies

medical device technology industry (MDTI) (Mirandola)

MDTI – Industry Structure 9000 companies in EU 6000 in USA 400 in Canada In all areas companies are for 80% small-medium sized

9000 companies in EU

6000 in USA

400 in Canada

In all areas companies are for 80% small-medium sized

MDTI – Products Areas Complex technological products: the most profitable (x-rays, dental care, hortopedics, electromedical devices, etc) Disposable: accessories, contact lens, canulas, DNA tests

Complex technological products: the most profitable (x-rays, dental care, hortopedics, electromedical devices, etc)

Disposable: accessories, contact lens, canulas, DNA tests

MDTI – Market Value: about 190 bln$ 100 bln$ in USA 66 bln$ in EU 24 bln$ in JAPAN

Value: about 190 bln$

100 bln$ in USA

66 bln$ in EU

24 bln$ in JAPAN

HEALTH AREAS RENAL area: Renal healthcare: (45 bln$) major deamand source, especially USA Dialisys products: (8.3 bln$) sub-sector, involves directly Mirandola. 3 competitors (Gambro, SWE; Fresenius, GER; Baxter, USA)

RENAL area:

Renal healthcare: (45 bln$) major deamand source, especially USA

Dialisys products: (8.3 bln$) sub-sector, involves directly Mirandola. 3 competitors (Gambro, SWE; Fresenius, GER; Baxter, USA)

HEALTH AREAS – 2 CARDIOVASCULAR area: About 14 bln$, high concentration in cardiovascular products market TRANSFUSIONAL area: 1.4 bln$, growth rate 5%

CARDIOVASCULAR area:

About 14 bln$, high concentration in cardiovascular products market

TRANSFUSIONAL area:

1.4 bln$, growth rate 5%

MIRANDOLA: FIGURES 35 direct-to-consumer companies and 35 intermediate product companies (6% revenues on final sales 16% biomedical devices, 84% disposable 2001: 560 mln euros revenues 3941 employees

35 direct-to-consumer companies and 35 intermediate product companies (6% revenues on final sales

16% biomedical devices, 84% disposable

2001:

560 mln euros revenues

3941 employees

MIRANDOLA: COMPANIES 5 multinational groups control 5 major companies, which earn alone about the 80% of total sector revenues. Multinationals compete in both renal, transfusional and cardiovascular areas, hence the demand of biomedical devices and disposables produced in Mirandola district. The groups are: GAMBRO: (21000 employees, swedish, 40 countries) leader in renal products and healthcare. Owns all over the world about 700 clinics where about 55000 patients are given treatments. Total revenues: 3.2 bln$ GAMBRO DASCO, Medolla, 710 employees

5 multinational groups control 5 major companies, which earn alone about the 80% of total sector revenues. Multinationals compete in both renal, transfusional and cardiovascular areas, hence the demand of biomedical devices and disposables produced in Mirandola district. The groups are:

GAMBRO: (21000 employees, swedish, 40 countries) leader in renal products and healthcare. Owns all over the world about 700 clinics where about 55000 patients are given treatments. Total revenues: 3.2 bln$

GAMBRO DASCO, Medolla, 710 employees

MIRANDOLA: COMPANIES - 2 B BRAUN: (29253 employees, german). 4 core divisions: anestetic products and services, rianimation and infusions (Hospital Care), surgical products (Aesculap), in-house patient care products (Outpatient Market), dialisys systems and products (MedTech). Tot rev: 2.7 bln$  B BRAUN Carex, Mirandola, 111 employees TYCO: (260000 employees). American multidivisional company, healthcare sector counts for 6.7 bln$ in revenues  MALLINCKRODT DAR, Mirandola, 331 employees

B BRAUN: (29253 employees, german). 4 core divisions: anestetic products and services, rianimation and infusions (Hospital Care), surgical products (Aesculap), in-house patient care products (Outpatient Market), dialisys systems and products (MedTech). Tot rev: 2.7 bln$

 B BRAUN Carex, Mirandola, 111 employees

TYCO: (260000 employees). American multidivisional company, healthcare sector counts for 6.7 bln$ in revenues

 MALLINCKRODT DAR, Mirandola, 331 employees

MIRANDOLA: COMPANIES - 3 FRESENIUS: (66000 employees, German), mostly in USA. Fresenius Medical Care, 43445 employees, treats about 120000 patients. Tot rev: 5.5 bln$  FRESENIUS Hemocare Italia, Cavezzo, 143 employees SORIN GROUP: (4841 employees, Italian) cardiac rhythm control, cardiac surgery and vascular care. Tot rev: 671 bln$  BELLCO, Mirandola, 404 employees  DIDECO, Mirandola, 654 employees

FRESENIUS: (66000 employees, German), mostly in USA. Fresenius Medical Care, 43445 employees, treats about 120000 patients. Tot rev: 5.5 bln$

 FRESENIUS Hemocare Italia, Cavezzo, 143 employees

SORIN GROUP: (4841 employees, Italian) cardiac rhythm control, cardiac surgery and vascular care. Tot rev: 671 bln$

 BELLCO, Mirandola, 404 employees

 DIDECO, Mirandola, 654 employees

DISTRICT STRUCTURE 577 mln Euros revenues within the district Percentage on total group revenues: GAMBRO DASCO: 6.86% DIDECO: 20.79% BELLCO: 12.32% MALLINCKRODT DAR: 0.58% FRESENIUS HEMOCARE: 2.16% B BRAUN CAREX: 0.96%

577 mln Euros revenues within the district

Percentage on total group revenues:

GAMBRO DASCO: 6.86%

DIDECO: 20.79%

BELLCO: 12.32%

MALLINCKRODT DAR: 0.58%

FRESENIUS HEMOCARE: 2.16%

B BRAUN CAREX: 0.96%

DISTRICT STRUCTURE - 2 Among control groups, just Tyco diversifies its activities in sectors different from the biomedical one. The most important productions are biomedical devices and disposables, filter machines for dialisys, apparats and cases in atossic plastic, selftransfusion systems, etc. GAMBRO and FRESENIUS main income area is USA (about 50-60% of total), while SORIN, TYCO and B BRAUN sell more in Europe Controlled Mirandola companies direct sales mostly to controllants, followed by sanitary systems (public/private) and commercial third parts

Among control groups, just Tyco diversifies its activities in sectors different from the biomedical one.

The most important productions are biomedical devices and disposables, filter machines for dialisys, apparats and cases in atossic plastic, selftransfusion systems, etc.

GAMBRO and FRESENIUS main income area is USA (about 50-60% of total), while SORIN, TYCO and B BRAUN sell more in Europe

Controlled Mirandola companies direct sales mostly to controllants, followed by sanitary systems (public/private) and commercial third parts

DISTRICT STRUCTURE - 3 EBITDA: GAMBRO DASCO: 9.41% DIDECO: 18.93% BELLCO: 14.00% MALLINCKRODT DAR: 20.11% FRESENIUS HEMOCARE ITALIA: 18.64% B BRAUN CAREX: 1.91%

EBITDA:

GAMBRO DASCO: 9.41%

DIDECO: 18.93%

BELLCO: 14.00%

MALLINCKRODT DAR: 20.11%

FRESENIUS HEMOCARE ITALIA: 18.64%

B BRAUN CAREX: 1.91%

STRATEGIES Relatively few competitors on global market Necessity of continous innovation, cost reduction and organizational flexibility Central factor: right allocation and management of networks hubs Challenge: increasing capitalistic mentality in far-east could lead to the creation of large-dimensioned asiatic competitors (especially China)

Relatively few competitors on global market

Necessity of continous innovation, cost reduction and organizational flexibility

Central factor: right allocation and management of networks hubs

Challenge: increasing capitalistic mentality in far-east could lead to the creation of large-dimensioned asiatic competitors (especially China)

STRATEGIES - 2 Defending strategies: Protect technologic leadership not in a passive way (positional advantage) but active (overwhelming technologic improvement skills and better human resources Exploit potential advantages resulting from chinese competitive opening  Joint ventures in China aimed at producing disposable (low added-value products)

Defending strategies:

Protect technologic leadership not in a passive way (positional advantage) but active (overwhelming technologic improvement skills and better human resources

Exploit potential advantages resulting from chinese competitive opening

 Joint ventures in China aimed at producing disposable (low added-value products)

GLOBAL SCENARIO FOR MIRANDOLA Increasing demand in sanitary specialistic areas Cost-efficiency and and technologic superiority Exploitation of the network potentiality, especially for R&D centers

Increasing demand in sanitary specialistic areas

Cost-efficiency and and technologic superiority

Exploitation of the network potentiality, especially for R&D centers

MIRANDOLA: OVERVIEW Mario Veronesi: founder and designer (Modena) Pattern of development known as biomedical pyramid: small firms earn and develop thanks to research and innovations sold to larger organizations which exploit them Mirandola  80% comes from disposable (differs from other districts because it is linked to more specific healthcare applications  just a few portion involves complex technologic applications, which require huge investments and continous research, but grants better incomes

Mario Veronesi: founder and designer (Modena)

Pattern of development known as biomedical pyramid: small firms earn and develop thanks to research and innovations sold to larger organizations which exploit them

Mirandola  80% comes from disposable (differs from other districts because it is linked to more specific healthcare applications

 just a few portion involves complex technologic applications, which require huge investments and continous research, but grants better incomes

MIRANDOLA: OVERVIEW - 2 Strategic relevance of European market, but USA stand as the most profitative and attractive market, even if it is difficult to reach and serve Asia acquires importance over years, growing in quantity and quality Good management and satisfying operative results within the district, but dynamically less attractive than former periods

Strategic relevance of European market, but USA stand as the most profitative and attractive market, even if it is difficult to reach and serve

Asia acquires importance over years, growing in quantity and quality

Good management and satisfying operative results within the district, but dynamically less attractive than former periods

DANGERS AND THREATS Lack of physical infrastructures (viability) and economical structures (public and private) Collaboration and presence of laboratories and R&D structures is still too weak if compared to other districts Joined to italian cronic lack of capital and resources, led firms to focus on disposable, the less technologic area (despite it is quite specialised) This entails a future direct competition with China and Far East

Lack of physical infrastructures (viability) and economical structures (public and private)

Collaboration and presence of laboratories and R&D structures is still too weak if compared to other districts

Joined to italian cronic lack of capital and resources, led firms to focus on disposable, the less technologic area (despite it is quite specialised)

This entails a future direct competition with China and Far East

FUTURE AND HOPES Even if never solved, logistic issues have never prevented Mirandola from being competitive Focus on quality of technics, still required by multinational controlling groups New market opportunities (Asia)

Even if never solved, logistic issues have never prevented Mirandola from being competitive

Focus on quality of technics, still required by multinational controlling groups

New market opportunities (Asia)

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