Paul DiCarlo, Bridgemedica
Things change quickly in this day and age. For example, the PC you bought three to six months ago is outdated. Software that you purchased for it may have had multiple service patches that needed to be installed, and the hardware is no longer the fastest available. Some would argue that technological changes in the medical device industry happen at a similar speed. Indeed, technology seems to move at the same pace no matter the industry. The question is: are you aware of your competitors' technology?
Forging a competitive advantage is a continuous and a renewable process, and one method of building such an advantage is through technology assessment. The term technology assessment may sound sexy, but it is simply a way to identify strategic and technological trends in the competitive landscape. This article details methods of technology assessment and how such assessment enables a medical device company to enhance its business and intellectual property portfolio. It also discusses how these elements can improve customer relationships with minimal impact on corporate structure.
How often should a company review competitive products? In a typical organization, this review often occurs during a development program for a next-generation device. However, this is a reactive assessment of competitive products—and often is not enough to understand the competitive product landscape that makes up the market a device company wishes to enter, not to mention how a product compares within that landscape (see Table I). A product landscape should examine each competitive product. It should consist of a minimum of the following:
• Competitor name.
• Web page (identify the Web page of the competitor where the product is displayed and defined, creating a quick reference link).
• Product image.
• Key product specifications.
• Stated market advantages.
This basic road map allows a company to see not only how it stacks up to its competition technically, but also how its product claims compare with those of competitors.
Research a competitor's product via the Internet and in the field to obtain information about the company's products and R&D pipelines. As this information becomes available, use it to build a database. Once information is added to this competitive landscape, it must be reviewed by a management team for a strategic response or adjustment based on the new information.
A technology assessment can also be helpful for acquisitions (see the sidebar, “Conducting Due Diligence on a Target Acquisition”) and new technology because it may provide an indication of where a particular market segment is headed. For example, in 1993, Cook Inc. became the first manufacturer to introduce coronary stents to the United States.1 However, its leadership in this segment has slipped, and Cook is not currently one of the top three coronary stent market leaders. An active technology assessment—performed as an ongoing, regular process—can help a company develop more-effective product life cycle planning and help it develop increased business and market awareness.
Core Technology Landscaping
Companies tend to take core technologies (e.g., circuit boards, LCDs, power supplies, polymers, etc.) for granted, but such proprietary technology should also be reviewed. Device firms should ask themselves
Table II. (click to enlarge
) A sample technology landscape for a complementary metal oxide semiconductor (CMOS) image sensor.
• Are we monitoring supplier companies and their technology?
• Do we monitor our core technologies for the latest trends and advances?
Answering no to either question may effectively put a company's future at risk. The key is for a company to develop a landscape for its core technologies and not just wait for new competitive technologies to appear (see Table II). This may include contacting key vendors and their competitors to discuss R&D projects in their pipeline each quarter. Companies should also monitor other sources of similar applicable or emerging technologies, such as start-up firms.
Understand Intellectual Property
Many companies have patents and intellectual property (IP), but few of them seem to understand the importance of IP, and more importantly, how to harness and leverage its power. Firms looking to maximize the value of their IP should analyze their patents, build on the patents, and look for opportunities to sell or license them. There are three primary functions of IP, and companies should understand what role they play (or can play) in their business models.
Product Protection. Protect a company's product from being knocked off or copied, or prevent others from developing patents to block the company's future iterations or improvements.
Blocking Patents. Block others from expanding their product or improving it by patenting around their design. (These patents don't just happen; they are strategic. To write blocking patents, a company must understand its competitor's patent landscape and actively set out to write these types of patents.)
Financial Gain. As a business growth opportunity, patents drop dollars directly to the bottom line through the sales or licensing of corporate intellectual assets. Over the past two decades, extracting value from a company's intellectual assets has become a popular business strategy.2
Some firms think that IP is a topic better left to the lawyers. Lawyers do play a key role in the process, but conducting brainstorming sessions with various team members is also helpful. The first step is to select one innovative, high-spirited engineer from each of the company's various disciplines (e.g., mechanical, electrical, chemical, and project engineers, programmers, etc.). Inventors, technicians, a marketing specialist, and an internal project team working on this or with similar projects should also be included.
Consider bringing in a professional consulting group to facilitate or participate in the brainstorming sessions, or to help train the engineers and team on how to maximize their IP productivity. Companies may find it helpful to hold meetings like this on a quarterly basis, with key topics being some of the company's own products and some related competitors' products (see Table III). These meetings should not exceed two or three hours.
One method that can help a team maximize its IP productivity is to start every brainstorming session with a short presentation of the market, some background information on the medical condition being treated, the competition, and the problem that the team is challenged with. This organizes the meeting so that all of the team members are on the same page. Such practices can also yield dividends of improved morale, teamwork, and productivity. Some companies even reward inventors with a small monetary award for patents filed.
Assessing New Concepts, Ideas, and Product Improvements
A key element in identifying a company's value to its customers is how it identifies and satisfies unmet needs in its target market. For that reason, a company should have a proper conduit for customers to present ideas for new product innovations or product enhancements.
Let's assume that a customer has an idea to improve a product or develop a new one. First, he tells the company's sales representative, who then tells his regional manager, who then adds it to his weekly comment sheets. This information may be bundled with the rest of the regional report, then rolled into the national report, and then circulated among the sales and marketing departments and management. Maybe someone sees the idea, maybe not. But more often than not, the customer has to wait for an answer on the great idea. The longer he waits, the more frustrated he gets. Ultimately, the customer may take his ideas and business elsewhere.
A technology assessment group can provide a proper means of handling and assessing the customer's concept in a timely manner. But developing such a group is a resource commitment and an investment. Start small and appoint one employee as the point person for responding to new product ideas and product improvements, setting up nondisclosure agreements, interfacing directly with customers, and communicating with the sales representatives. If the workload becomes too intense for a single inside person, look to outside resources such as a temporary employee or a consulting group that specializes in this area to minimize expense while maintaining internal controls.
Table IV. (click to enlarge
) Examples of comparative success for selected medical device technologies.
Companies occasionally make significant investments in this area. For example, two very large organizations in the medical device industry have created online service centers with idea submissions and a customer service–style response setup. They both have Web sites that require good navigation skills by the user, but the information provided outlines the companies' methods of handling information and how users can make submissions. Some find this approach to be a bit impersonal, but it depends on how the company typically interfaces with its customers.
Actively Review and Identify Disruptive Technologies
Disruptive technologies are innovations that improve a product in ways that the market does not expect and, because of that, they often go unnoticed. Companies can look for disruptive technologies by clearly identifying the basics of their own technology and examining companies that are developing new devices in that space. Technology assessment can be especially helpful for innovative companies looking to dominate a segment of the device market. By contrast, losing the dominant position in the market can ultimately make a company miss out on significant revenue. Table IV provides some examples of companies that innovated with a particular technology, and other companies that followed with a disruptive technology. These second companies now lead the market. Critics could argue that the companies in the first column continued to iterate and stopped innovating. This concept is discussed in great detail in The Innovator's Dilemma by Clayton M. Christensen.
Identify Technical Opportunities
Another aspect of technology assessment is seeing and identifying technological opportunities from other areas that can be leveraged within your business space. For example, laparoscopy was mainly used by gynecologists when it was first introduced. However, the technology showed potential for tissue manipulation, dissection, electrocautery, and ligation. Eventually it was leveraged for a variety of general surgical procedures by training new physicians as well as by adapting and innovating new instrumentation.
A company can also train its staff to leverage synergies within its own organization to maximize opportunities and efficiency. For example, conduct some cross-pollination: have various R&D groups in the organization share and discuss the technologies that they are working on with one another. Then have them stretch outside their comfort zones into adjacent business areas and, using a synergistic approach, see what can be leveraged. This is an investment in time, effort, and money—but it can add depth to engineering and new business development teams, as well as boost technology awareness and confidence up and down the corporate structure.
Technology assessment is one of the most important and most overlooked investments a company can make. It is a strategy that manufacturers can use to actively evaluate products, IP, and core technologies. It can also be used for IP protection and to block competitors. In addition, a proper technology assessment identifies disruptive technologies and allows companies to discover technical opportunities in other areas. Companies should understand that technology assessment is not a luxury—rather, it is a strategic necessity that leads to a stronger business plan, a better understanding of the dynamics of one's competitors, and an improved IP and technical landscape. Companies can use it to improve their value proposition by engaging customers, vendors, or inventors in a timely manner, which also improves business partnerships and corporate image. In other words, technology assessment has the power to help manufacturers protect and grow their businesses.
1. “Angiotech Pharmaceuticals Inc.: Cook Incorporated Reports First U.S. Implant Of A Paclitaxel-Coated Coronary Stent,” Business Wire (Bloomington, IN: July 16, 2001).
2. R Goldscheider, Licensing Best Practices: The LESI Guide to Strategic Issues and Contemporary Realities (New York: Wiley, 2002).
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