Published on November 22, 2013
Opportunity Analysis for EMS Providers in the Medical Industry EMS providers competitive positioning at a crossroad Kiran Unni, Research Director Measurement and Instrumentation November 2013 © 2013 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of Frost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.
Market Overview World EMS Medical Market: Market Snapshot, 2013 Compound Annual Growth Rate Market Stage Growing 10.012.0% Number of Competitors About 100 2013-2019 Strengths Currently, the penetration rate is still less than 15% The medical industry offers significant opportunities for growth and offers the potential for elevated role of strategic partner Key differentiating factor is its ability to convince OEMs that EMS expertise spans much beyond manufacturing services. NAE4-11 Services Offered (2013) Competitive Factors Manufacturing Performance Procurement Price Other Supply Chain Services Reliability Design and Engineering Support Quality Low cost of ownership Service 2
Drivers and Restraints Total EMS Medical Market: Key Market Drivers and Restraints, Global, 2013-2019 Increasing cost pressures Increasing electronic High quality levels Manufacturing challenges content encourages outsourcing boost EMS opportunities Drivers Drivers Access to build inmarket/for-marketglobal footprint EMS design expertise encourages outsourcing potential Restraints Restraints Liability flow down prevents OEMs from outsourcing all services Denotes current impact Denotes long-term impact Reluctance to outsource slows EMS opportunities High Levels of regulatory compliance and investment deters EMS penetration Source: Frost & Sullivan analysis. 3
Key Challenges Transition from a Tactical Partner to a Well-rounded Solutions Provider Changing Mindsets of Traditional OEMs Lack of Infrastructure to Support Expanding Role Privacy Concerns and Regulatory Compliance Long Sales Realization Cycle Changing Competitive Landscape Market Education EMS Medical Market: The Need to change OEM perception is vital for continued success 4
Business Opportunity MARKET OPPORTUNITY Cardiovascular, remote diagnostics, and patient monitoring products are the fastest growing segments in the EMS medical market. The high growth market penetration provide a great business opportunity for existing and potential EMS providers to capitalize on. Integration of wireless communication protocols, robotics, electronic content, convergence with sensors and other key trends provide an opportunity for EMS providers, focused on developing solutions with the potential, for long-term success. KEY SUCCESS FACTORS Existing Asset Ability to Integrate ? Engineering and Design Optimization Manufacturing Bandwidth Develop networked supply chain and solutions to enable seamless transition from first stage of engagement to product launch. Facilitate smart OEMs to improve efficiency and profitability through strategic outsourcing. Develop the ability to combine software and hardware to better capitalize on emerging role as a complete solutions partner as opposed to low-cost manufacturing provider. ? Flexibility BUSINESS CONCEPT Source: Frost & Sullivan 5
Mapping of CAGRs of Key Product Segments High Impact High Growth Impact Patient Monitoring 11.7% Medium Growth Impact Imaging 11.4%% Projected Impact on the Growth Rate of Industry Cardiovascular 11.2% Others 11.2% Low Growth Impact Low Impact High Low Market Potential *Others includes urology, infusion systems, orthopedics, therapeutic, ophthalmology, general surgery, minimally invasive surgery, and hemodialysis markets.. Note: All figures are rounded. CAGR is calculated between 2012-2019 Source: Frost & Sullivan analysis. 6
Mega Trends in the Medical Industry – Medical Devices Are “Disappearing” Medical Industry: Key Trends for Medical Devices, Global, 2012-2020 Disappearing in Size – devices increasingly smaller, biologic and biomimetic Miniaturization Disappearing in Cost – greater customer pricing pressure, reimbursement cuts, excise tax, and higher regulatory hurdles shrinking margins and discouraging innovation focused on premium products Disappearing in Use – more seamless incorporation into existing workflows and care pathways Disappearing Business Model – the data pulled from a device and services associated with it will become a bigger revenue source than the devices Disappearing from the Hospital – increasing innovation occurring outside acute care settings Portability Disappearing Hype – evidence-based technology evaluation and ROI matter more than ever 9840-30 7 7
Future Opportunities and Megatrends for EMS Providers Future Opportunities and Megatrends for EMS Providers, 2017–2025 Minimally Invasive Surgery Robotically-assisted surgery, implants deployed under MIS guidance. Growth Potential High Low Remote Diagnostics Targeted drug Nanotechnologies delivery, cellular Interventional Medicine Wearable sensors, wireless manipulation, in-situ sensing technology, remote surgery, artificial red blood cells, artificial diagnostics and communication immune response through mobile phones, PDAs, system. notebooks. Lab-on-chip, nano Nanobots fluidics, imaging probes, Transcatheter heart valve, anti-microbial coatings, embolization beads, bioactive coatings, in bioabsorbable stents. situ sensors, structural materials Low Market Size High 8
Benefits of an EMS Partnership The ability to address dynamic needs of convergence and collaboration to optimize performance. Key Benefits 1 2 3 Consulting • Achieve faster time to production for new designs • Partnering to meet compliance requirements and sharing cost A Solutions Based Approach: • Ability to leverage flexible and responsive manufacturing 4 • Intelligent partnerships catering to product roadmap support 5 • Elevate strategic and competitive performance Supply chain Design support Services Manufacturing Software The convergence of diverse systems to create solutions meets market requirements at fast turnaround times for time-to-market strategy. Source: Frost & Sullivan 9
Best Practices and Strategies for Success Integrated Strategies Key Success Factors for EMS Providers, 2013–2020 • Growth and complexity • New challenges • New opportunities Integrated customer management Motivate OEMs-Execute decisions more quickly for reduced operational cost and increased production efficiency Product roadmap visualization ability Open communication and real-time data flow Supply chain superiority Integrated Operations Leveraging internal and acquired capabilities To drive… Collaborative environment with OEMs Integrated manufacturi ng for increased flexibility Resource optimization Ramp-up on building design and engineering capabilities Financial stability- for long-term commitmen t Proactive focus Integration of resources, operations, and technology Source: Frost & Sullivan 10
The Last Word—Three Big Predictions 1 Remote diagnostics, patient monitoring, cardiovascular, neurology, consumer medical products, and single use products will spur EMS growth. 2 Consolidations and strategic alliances will be driven by the demand for increasing competitive positioning and design capability in the EMS medical market. 3 Increasing demand for engineering and design support, supply chain services, and complete build will help booster EMS growth in the medical industry. Source: Frost & Sullivan analysis. 11
For More Information: Jeannette Garcia Corporate Communications Measurement and Instrumentation (210) 477-8427 email@example.com 12
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