Simon-Kucher & Partners study shows lower overall business expectations for Europe's Medtech Firms
According to key findings from the 2019 MedTech Barometer*, a study conducted by the global strategy and marketing consultancy Simon-Kucher & Partners, more than 50 percent of European medtech companies expect business to be stagnant or weaker compared to 2018. And while companies expected profit growth of seven percent in 2018, 2019 expectations have fallen to 2.8 percent, representing the most significant anticipated profitability decline since 2014.
“Over the past year, the majority of industry leaders changed their positive views to negative ones,” says Joerg Kruetten, Senior Partner and Head of the Global Life Sciences Division at Simon-Kucher & Partners. “While there are several factors contributing to this troubling development, the primary cause appears to be negative global trade dynamics and increased economic uncertainty around the globe.”
Innovation becomes difficult
The negative outlook of the study participants can also be attributed to increasing budget constraints that limit providers’ ability to invest in innovations. “Due to narrowing innovation gaps, and the desire to reduce spending, the industry won’t be able to continuously develop more-advanced equipment and technologies, which have proven to drive growth and revenues,” explains Kruetten.
In addition, medtech companies must manage increased competition on the supplier side, as well as ongoing price pressure resulting from procurement centralization. With fewer individual buyers procurement groups are able to apply much greater price pressure. This is supported by the industry’s 2019 price expectations: Study participants anticipate a price decrease of 0.4 percent, continuing a two-year trend of the previous two years.
Concentrating on revenue focused profit improvement
To overcome these market challenges, medtech companies must emphasize revenue-focused profit improvement measures which have a broader, more significant impact than cost-focused measures. “Although nearly 80 percent of companies have dedicated resources in place to systematically drive and monitor profit improvement measures, less than half of them have the necessary tools and mindset to do so,” says Kruetten.
Industry conference: MedTech Strategy Forum
The complete MedTech Barometer results were presented on January 29th at the Simon-Kucher & Partners Annual European Medical Technology Strategy Forum in Zurich. The event theme was “Enhancing Profitable Growth in MedTech”. Key forum presenters and topics included:
*About the MedTech Barometer:
The MedTech
Barometer is an annual medtech-specific online survey of business
expectations conducted by Simon-Kucher & Partners among C-level
executives and board members, functional heads and managers, and private
equity investors in Europe. With approximately 45 top-level participants
in 2019, the study reveals current commercial trends and challenges in
the medtech industry, and shows how industry influencers are addressing
specific trending topics. This year’s emphasis was on revenue-focused
profit improvement measures.
The study and forum presentations are available on request.
Simon-Kucher & Partners, Strategy & Marketing Consultants:
Simon-Kucher
& Partners is a global consulting firm with around 1,300 professionals
in 38 offices worldwide focusing on TopLine Power®.
Founded in 1985, the company has more than 30 years of experience
providing strategy and marketing consulting and is regarded as the
world’s leading pricing advisor.
View source version on businesswire.com: https://www.businesswire.com/news/home/20190206005711/en/
Douglas Jensen (Public Relations)
Tel.: 617-231-4556
Email: douglas.jensen@simon-kucher.com
www.simon-kucher.com