Ambu develops, produces and markets diagnostic and life-supporting equipment and solutions to hospitals and rescue services. The largest business areas are Respiratory Care, Cardiology and Neurology in which the most important products are ventilation products for artificial respiration and single-use electrodes for ECG tests and neurophysiological mappings. 8% of the Group’s products is sold on export markets through Ambu’s foreign sales companies or distributors.
The total number of employees is 1216 of whom 313 work in Denmark and 903 in Ambu’s sales and production companies outside Denmark. Ambu’s strategic development Since 1996, when Ambu posted the first deficit in its 60 years of operation, change has been the keyword. In 1999 a new strategy set out to develop the business on the basis of, among other things, a wish to ensure sizeable growth in turnover and earnings, and a considerable improvement of production efficiency, development activities and marketing.
In November 2000 Ambu acquired Agepharm2, a French company who produces first aid products for burns. The same year Ambu took over the following companies:
- Dynasty (Xiamen), the plastic production and assembling company in China;
- NAJO Emergency Products3 in USA, the manufacturer of innovative spinal immobilization products.
The acquisition of Medicotest and its electrode business in 2001 meant a doubling in size of the original Ambu business and a considerable strengthening of the product range. In the summer 2002 the Strategy-2005 was presented.
The strategy involved focus on selected product categories and markets capable of contributing high growth and satisfactory value creation. Problem issues Ambu’s current strategy4 In October 2005 Ambu reached the end of the Strategy-2005. This strategy was well executed and Ambu reached most of its objectives that were set up. The solid platform for further growth was established. Through continued growth, Ambu has achieved a position as the leading player within selected segments in the medico-technical industry.
The Ambu’s new strategy, Strategy-2008, can be characterized as an ambitious further development of Strategy-2005, and is based on Ambu’s current foundation. Ambu has successfully realised a number of the objectives laid down in the strategy 2008. The result has been continuous growth in revenue, but in the past two financial years, the combined growth has not reached the desired level. The overall growth in the past two years has not met the expectations set out in Strategy 2008. As Ambu states in its Annual report 2006/2007 5 the revenue in the USA fell by 10% after an 11% increase the year before.
In the past year, Europe has seen growth of just over 8%, and in several important markets growth in revenue has been even higher. Ambu is pleased with these developments, but believes that growth potential is even greater. The company sees the following possibilities for the optimizing growth potential: The largest markets are Europe and the USA. Ambu should also focus on strengthening Ambu’s position in other attractive markets. The market potential is far greater in the USA, and Ambu must therefore become an even stronger brand in this market.
New markets – living standards in many less wealthy countries are set to improve in future, which will spur demand for medico-technical products. Problem statement According to the Strategy-2008 Ambu considers a possibility to optimize growth potential, and increasing its turnover through the international expansion. The aim of this project is to prepare a decision base for Ambu’s international marketing strategy. The following questions will be discussed/ answered in order to work out the strategy: Initial screening assessing the countries economy, political and social indices.
More detailed assessment of the selected country/group of countries on the remaining markets assessing criteria such as industry analysis and organization environmental analysis. Field research (market research) is employed to answer specific questions as required by the business decision makers (4 P’s). The final stage is to produce estimates of sales potential and work out suggestions on the strategy implementation plan Delimitations There are many countries which can be defined as ‘less wealthy countries’, where living standards are set to improve in future.
This research will focus on the specific geographical and political area: Eastern European countries, which joined the European Union in 2004 and 2007: Bulgaria, Czech Republic, Poland, Hungary and Romania. As the medical device market is ambiguous and much segmented (e. g. tools, materials, apparatus, equipment and other devices and even special software), this research focus on the product range relevant for Ambu A/S(enclosure)6: diagnostic and life-supporting devices for hospitals and rescue services, focusing on single-use products.
This research project is a preliminary ‘desk research’ with practically oriented basis for the company decisions. We will apply a set of models for the analysis of Ambu’s strategic current and make projections for expected future situations and give the analysis of the factors that can influence the choice of internationalization strategies. We do market screening where we will investigate general market potential in the countries of interest and market screening relating to the products of interest. Based on the screening results we will choose a country or a group of countries which present the best potential for Ambu.
We will use PESTLE analysis model to understand the context of the chosen country where Ambu will operate in future. Thus we can asses the main milestones and get close insight of what Ambu should take into the consideration before moving into the country. Porter’s five forces framework will help to better understand the industry context and industry attractiveness in which Ambu operates. By studying the structure of and dynamics between these the industry forming forces, we can come with the suggestions upon best strategic choice for future internationalization.
Value creation and competitive advantage in the context of the B2B medical device industry will be analysed by applying the value chain analysis . The basic idea behind the value chain model is the analysis of firm-level competitive advantage. We will apply SWOT analysis to identify strengths, weaknesses, market opportunities for the company, and threats to Ambu’s business. It will help us in determining marketing strategy that will minimize the affect of weaknesses on Ambu’s business while maximizing their strengths.
We assume that not all the data will be available, especially data on consumer behaviour in specific segments. That data we will collect ourselves with the help of questionnaires through contacting potential buyers or decision makers. The last tools that we will apply are a marketing implementation plan and cost estimations. These are probably the most important models. They establish a roadmap for the sales and marketing planning, maximizing the resources. Potential cost expenses will help us to determine where the money will be going to and how it is going to be spent.
Deciding which markets to entry/screening Screening This research provides a strategic insight into the medical devices markets in five selected countries in Eastern Europe and analyses their attractiveness for Ambu A/S in terms of expansion. This screening study looks at the impact of the various relevant factors to gauge the level of opportunities present.
Medical device market features market outlook market size estimation rate of market growth Having gone through the mentioned above variables we got the markets outlook chart that can be found in enclosure 1 ‘Markets outlook’. We have analysed the information in the chart and came to the following conclusion: Eastern European countries offer a strong growth potential for Ambu A/S that can be seen both as an opportunity and a great challenge. There can be noticed a wide span between countries, although they are all moving in the same positive development direction.
Czech Republic and Poland are the largest and fast growing markets, but we can see that Poland depends more on import of medical devices than CR. Bulgaria, Hungary, Romania are expanding markets with less potential Aging population indicates direction of future medical devices market Choice of a specific country As Ambu A/S does not have experience of working in Eastern Europe we will suggest choosing only one country in Eastern European region, Poland: Among world’s top twenty markets Imports a vast majority of its medical devices Local production cannot meet demand Remarkable growth in imports
We have chosen to provide the overall market description in enclosure 10 in order to get deeper and better understanding of the overall polish market for medical devices. The external environment PESTLE analysis PESTLE analysis allows identifying and summarising environmental influences on the organisation. Political factors: Poland is a country with many business opportunities available; many companies are looking to directly invest in Poland’s growing economy. The government offers good prospects for political stability, at least in the short term.
It has also announced its intention to enact business-friendly reforms, lower taxes, and accelerate privatization. The government is positive about adoption of the euro, but is unlikely to rush to join ERM2. An inefficient commercial court system, a rigid labour code, bureaucratic red tape, and persistent low-level corruption8 keep business development low. Rising demands to fund health care, education, and the state pension system present a challenge to the Polish government’s effort to hold the consolidated public sector budget deficit under 3. 0% of GDP, a target which was achieved in 2007.
Economic factors: Current situation9 Poland has pursued a policy of economic liberalization since 1990 and today stands out as a success story among transition economies. GDP per capita is still much below the EU average. Since 2004, EU membership and access to EU structural funds have provided a major boost to the economy. Foreign trade: after a bumper 2006, increases in foreign trade turnover were less spectacular in the first half of this year (2008). The value of Polish exports grew by 13. 5% (in current prices) in 2007 compared to a year ago, while imports increased by 16. 6%.
Import of medical devices in 2007 was 78% of its medical devices. Unemployment is falling rapidly, though at roughly 11% in December 2007, it remains well above the EU average. In December 2007 inflation reached 4. 1% on a year-over-year basis, or higher than the upper limit of the National Bank of Poland’s target range. Projections of future economic situation10 Economic growth will slow from 5. 1% in 2008 and 4. 3% in 2009, as external demand weakens and a tighter monetary policy weighs on domestic demand. Rapid wage growth and higher food prices will push up consumer price inflation from 2. % in 2007 to 4. 2% in 2008.
Weaker demand pressures should allow inflation to drop to 3. 5% in 2009. The current-account deficit will continue to widen gradually, rising from 3. 7% of GDP in 2007 to 4. 1% of GDP in 2009. Socio-Cultural factors: Population/current situation and socio-cultural changes11. Poland has the eight-largest population in Europe and the sixth-largest in the European Union. An average inhabitant of the country is today almost 37 years old. In comparison to other European countries, Poland is still young in demographical sense. Since 1999 the population growth has been negative.
Poland is currently experiencing population aging and greater longevity, with life expectancy reaching 79,23 for women and 70,95 for men12. Media views and consumer attitudes. Communication channels (media, internet, etc) have impact on that the public is now far more responsive for healthcare than ever before. Greater media coverage has raised awareness of the medical equipment available and stimulated increase in awareness over personal health issues. Consequently, patient expectancy has risen placing the responsibility on the providers to deliver quality and value for money.
Current health policy13 reforms are primarily aimed at: tackling the demographic challenges of population ageing; reducing hospital debts; restructuring the health sector and introducing alternative sources of revenue for health care financing. The “greying population” is beneficial for the industry as people over 60 have more need for some medical procedures as those under, suggesting that firms should focus R&D on the aged market. The future pace14 of population aging will be affected by changes in mortality, fertility, migration, and the variable occurrence of the baby boom and the baby bust.
The largest increases are projected for 2010 and 2015. Fertility has the strongest impact on the aging process. The share of the oldest age group is expected to increase to 38% in 2010. This will impact on many issues and one of them is increase the dependency of the elderly on the working age population. Technological factors: Technology involved15. Information and Communication Technology (ICT): the primary objective of information technology is to create, store, exchange and use information in its various forms. E-commerce allows products/services to be purchased directly from the manufacturer, cutting out the middlemen, disintermediation.
This can reduce cost to customers. Internet and information technologies have increased communication, information sharing and exchange of knowledge. Future implications of technology: In the near future would appear Artificial Intelligent Mechanical Devices, implantable microchips and sensors that will continuously check the health of patients and may even treat. Robotics will be used for tele-surgery applications. We assume that there could be more inventions and implications, but our knowledge is limited in this field. Legal regulations:
When doing business in Poland there are always legal aspects1617 that has to be taken into consideration. Medical devices legal regulations are found in “The Medical Devices Act of 20th April 2004”, which contains definitions and laws concerning requirements for medical devices, conditions of use, testing, registering, classifications and some other. See enclosure 6 for the explanations to the Act. This Act was prepared shortly before Poland’s accession to the European Union and adapted Polish regulations to the relevant EU directives.
In Poland medical devices can be sold only in predefined types of retail and wholesale which are determined by The Pharmaceutical Code (Act of 6 September 2006)18 Environmental factors19 In 2003 Poland has begun investing heavily in environmental technologies and cleaner production processes in line with greater integration of the EU economy with the global economy20. Poland, by joining EU was obliged to adjust its legal regulations regarding packaging and packaging waste to the EU requirements. It follows the European Packaging Law21.
Concerned about the increasing effects of environmental pollution on people’s health, the Commission adopted a European strategy for Environment and Health22 in June 2003. The strategy focuses on the following diseases: childhood respiratory diseases, asthma, allergies; neuro-developmental disorders; endocrine disrupting effects. Porter’s 5 Forces Analysis We are going to analyze the company’s strategic current situation and give the analysis of the factors that can influence the company. Porter’s Five Forces is a framework that models an industry as being influenced by five forces.
It works by looking at the strength of five important forces that affect competition. We have decided to make the detailed analysis of the buyer power, competitive rivalry and substitutes in the main paper as we consider these competitive forces most relevant exactly for this project. They deal more with the market and customers issues. Supplier power deals more with the issues like switching to another supplier or considering the number or the size of suppliers. Threat of new entry deals with such issues how easy or difficult it is for the new entrants to start to compete or which barriers do exist.
The other two forces-suppliers and new entries will be provided in the enclosure 12. They are less relevant for this project but without them the ‘full picture’ will be lost. Such choice of priority will give us possibility to have deeper insight into most essential parts of the model in the project and supply with the other parts of analysis in the enclosure. Industry The medico-technical industry is embossed of innovation and product development/improvement (which is also a part of Ambu’ vision).
Companies in this industry consider research and development as one of the most important keys in gaining success. The industry is characterised by growth, and this trend is expected to continue in the coming years. Growth will be determined by the general demand made by citizens to health care and the resulting increase in funds allocated to the health care sector, and by the ageing of the population. Ambu has not been severely affected by the general recession in the world economy, because the medico-technical industry is only moderately affected by this.
Ambu position on the world market is as follows. In North America the breakdown of sales are 31%, in Europe it is 58%, in Denmark it is only 3% – and other countries have a breakdown of sales at 8%. The company is doing great in the world market in some areas according to market shares, market growth and size compared to competitors. At the market for Ventilation products for artificial respiration Ambu has a market share in Europe/USA at 13% and a market growth at 8%. Ambu is the market leader in this specific market (no. 1 – Size compared to competitors).
At the Single-use electrodes for ECG tests Ambu has a market share in Europe/USA at 10% and at the same time a growth at 10%. They are no. 3 in the market – size compared to competitors. On the Single-use electrodes for neurophysiological mappings-market their market shares are 7%, but they have a growth at 10%. Unfortunately they are only no. 4 – size compared to competitors. Ambu has chosen to outsource some of the production of technically easy products to countries where the labour cost is cheap. In general we think that most companies operating in this industry have the same strategy.
However, the development and production of more technically advanced products – would often stay in highly developed countries where the know-how is much higher. Buyers The customers of Ambu are hospitals and emergency organizations. They operate on the B-t-B market. The main focus of the company is the European and American market. In many countries authorities demand increased health care sector efficiency which pressurises prices of medico-technical products. This forces Ambu to demonstrate the value the products add to customers. The market for medico-technical products is undergoing structural change.
Recent years a restructuring of the hospital market has happen. The result is that many hospitals have joined major hospitals procurement groups that have been set up at national as well as international level. The hospital sector is expected to continue its direction of fewer, but larger customers, with suppliers of medico-technical products being met with demand for increasingly wider product portfolios. The same development is forecasted for the pre-hospital sector. Substitutes Ambu consists of several different products, but the purpose of all the products is to heal patients.
It depends on the illness of each individual patient whether or not there is a substitute of Ambu’s products. In general I would say that there are no substitutes to these products. Sub conclusion In this industry innovation and product development are important factors to survive. The growth is an opportunity which is to be exploited by companies on the market. It is important that Ambu uses this opportunity to gain market shares and turnover. They could improve their position in some of the areas such as Single-use electrodes for neurophysiological mappings where they only hold 7% of the market and are no.
Ambu is situated at the B-t-B market and their customers are hospitals and emergency organisations. Recent years a restructuring of hospital market has occurred. The result is that many hospitals have joined a major hospital procure which means fewer, but larger customers that demand wider product portfolios. Such customers have great bargaining power, the prices for medico-technical products are being pressured, which forces Ambu to demonstrate the value added to customers. Forces of new entrants and substitutes can be considered to be weak forces in the industry.
But Ambu should not ignore them as they can become a threat with the time. The Internal environment Porter’s Value Chain Analysis To analyze the specific activities through which Ambu creates a competitive advantage we are going to use the value chain model. We have decided to use a simplified version of the value chain to analysis as we are going to constrain our analysis only to the primary activities study According to Ambu’s vision23 they want to be perceived as the company closest to their customers thereby helping them to do their jobs better and improving patient care.
Research and Development Ambu has changed their strategy regarding research and development and now focus on a streamlining of the existing product range, assessing and prioritising the individual product categories to determine the composition of the future product programme. The new business system (product development and marketing work as one single unit/department) has resulted in several advantages (the product development and production time have decreased).
The development activities at Ambu are concentrated at the plant in Olstykke (DK). Ambu’s development resources are channelled into:
- Ventilation products for artificial respiration
- Single-use electrodes for ECG tests
- Single-Use electrodes for neurophysiological mappings
Production Ambu has 5 production plants: Two in Denmark (Ballerup and Olstykke), one in Sweden, one in China, and one in Malaysia. The last two plants mentioned deal with wage intensive products (Benefit of outsourcing production). In Denmark the more technologically advanced products are manufactured. Ambu has utilized the opportunity of outsourcing the production and reduced costs through labour cost (in China labour is 17-20 times less expensive than in Denmark).
Further more Ambu has chosen to outsource unwanted processes – a part of Ambu’s rubber production is outsourced to Codan Gummi (they rather focus on core competencies). In July 2001 Ambu relocated its Danish production plant and Group Head office to Ballerup. The result of the relocation of production is the reduction in Danish staff. Ambu has introduced a concept called “Lean Manufacturing”, which means strong customer focus and an effort to minimize all waste (also a part of their vision).
At the production in Olstykke (production of electrodes) a new implementation of production groups has now been introduced and is expected to result in increased productivity. New machines have been designed and constructed for this particular part of the production. Sales and Service Ambu has a total of 8 sales companies worldwide (USA, Japan, UK, France, Germany, Italy, Spain and Sweden). The sales companies do direct sales of Ambu products to hospitals and rescue services. In those countries where Ambu do not have direct sales, product sales are handled by distributors.
Distributors account for 21% of Group turnover Sales by product group are divided as shown below: Electrodes 45% Ventilations 30% Training solutions 11% Other products 14%. Sub conclusion In this line of business it is obviously that a lot of resources and capital are to be spent on research and development. Ambu focuses on a streamlining of the existing product range, assessing and prioritising the individual product categories to determine the composition of the future product programme. Ambu has also decided to channel their development resources into three different areas, which makes the overall focus easier and more coherent.
A lot of focus was put into their production: how to minimize costs and increase productivity. They have outsourced parts of their production to gain competitive advantage and relocated the production plant and Group Head office to Ballerup. During the relocation of the production a new concept was also implemented – “Lean Manufacturing”. Ambu both have sales companies and distributors worldwide to handle the sales. Electrodes have the highest sales. SWOT The SWOT analysis will be used mostly for driving the process of creating a sound country-specific marketing plan.
Fewer, but larger customers, demanding for increasingly wider product portfolios. In many countries prices on medico-technical products are pressured. In future they should continue this direction and utilize opportunities of external environment and turn them into their own strength. They should neither look at threats as a barrier, but more like opportunities. Ambu should focus on how to adapt to threats and make it a part of their value chain.
Find the potential in each external factor and use them for their own benefit. One of the external factors/issues is the restructuring of the hospital market which results in fewer, but larger customers. Customers are pressuring prices and demanding for increasingly wider product portfolios. Due to this change in buying behaviour from customers, it might be a good idea to add marketing as a more visible part of their value chain. Ambu could use marketing as a way to demonstrate the value of Ambu’s products towards customers (positioning). End-User Analysis We will collect data on consumer behaviour ourselves with the help of questionnaire.
We will use this data for understanding consumer behaviour and further on preparing suggestions for marketing mix. Defining the objectives of the survey The main objective of this questionnaire is to provide the informational inputs necessary for effective planning of marketing activities and to support the decision about positioning of marketing mix elements. Research objectives are to to collect data for: Understanding customer needs Decision upon product/factors that influence the decision to choose a certain type of product Where do buyers look for the information about new products
Market assessment: nature of competition the approximate level of demand for the product sales potential of market segments (private or governmental) Determining nature of relationships with the supplier factors that influence the choice of the supplier level of satisfaction with the current supplier factors that would be required for the customers to consider switching supplier Assessment of distribution channels Where do buyers look for the product Who are the main distributors Survey methodology The Survey24 consisted of 10 questions. 1)Fixed-alternative questions were used in questionnaire:
Determining the sampling group By “population” we denote the organization representatives, who are responsible for purchasing the medical equipment for the hospital. Population size is 781 hospitals25. As the data collection from the whole population is a costly procedure, which takes much time for collecting as well as for the analysis, we have chosen to obtain data for a selected subset of a population, rather than the entire population. Type of sample drawn from the population: a simple random sample.
We choose this kind of sample as it is free from sampling bias. Statistical calculations can be found in enclosure 7. sample group. Questionnaire analysis There are 54 answers were collected and analysed. Results were analyzed and presented in the form of percentage26. As we were not allowed to contact any real organization, we used help of polish medical students, 5 year, who were interns in hospitals in Poland. We asked them to fill in the questionnaire self, as though that was them, who are responsible for purchasing equipment. Results interpretation
Ambu’s main competitors (different products) on the Polish market are: GE Healthcare, Vital Signs, Inc. , Oridion Systems, MAQUET GmbH & Co. KG and Cardinal Health, Inc. While making the decision about choice of the supplier customers pay attention to the product quality, low price and delivery time. Analysis showed that customers will definitely consider changing the supplier if they get better quality, price, and wider product range.
The last one indicates that customers prefer having one supplier or 2 in stead for many, or one supplier for each product. 4% of the respondents stated that they are satisfied or very satisfied with their present suppliers. The additional information provided by hospitals showed that hospitals are most unsatisfied with the suppliers of ECG sensors and ECG surface electrodes (almost 60% for each product). This can be the products that AMBU should introduce first to the market. The respondents stated that they get acquainted with the new equipment mostly through recommendations of other professionals (doctors), at the exhibitions and internet and through sales agents. Products are mostly bought through wholesale and sales representatives.
Estimation of the potential sales ECG Sensor ECG Surface Electrodes 14. 958 pieces x 60% = 8. 975 ( or 897 packages) 9. 311 pieces x 60% =5. 587 ( or 466 packages) Discussion of reliability and validity in the project Always in the forefront of the minds of those planning to conduct a survey should be the question of the quality of data that will be produced. The two traditional measures of survey quality are: Reliability — Is the survey measuring things consistently? — and Validity — Is the survey measuring what it says it is measuring? The results in this project are neither reliable nor valid.
But if it was real project where real professionals answered the questionnaire, but not the students, we would discuss issues of reliability and validity in the way that we presented in enclosure 13. Choice of the strategy. Suggestions Major points: Ambu is new to the Polish medical device market and interested in exporting to Poland. According the Ambu’s own strategy 2008 Poland is not on the list of focus markets where Ambu has direct sales, at least not until 2011. In the countries where Ambu do not have direct sales, product sales are handled by distributors Market Entry
For the mentioned above reasons we will suggest indirect exporting strategy through distributors. Indirect exporting represents the least expensive and lowest-risk method of participating in foreign markets because it is relatively easy to initiate and requires minimal capital investment. Sales/marketing can be done by distributors contracted by Ambu, thus significantly reducing the company’s own required sales/marketing expenditures. The efforts of Ambu’s internal sales/marketing forces will be focused on developing educational tools, and training the distributor sales representatives.
Suggested indirect agents: Export management company/agency with expertise within exporting medical equipment. Export agents, who will represent Ambu and act under its own name, and generally contract for two-three years. Suggestions on marketing mix The marketing mix27 is generally accepted as the use and specification of the four Ps describing the strategic position of a product in the marketplace. Distribution (place) strategy We will suggest that the products are to be distributed through a limited number of distributors (1-2) in a given market area.
That will allow Ambu to support good image as a selected brand. That will allow having a good impact on the customers. Channel motivation. As distributor motivation Ambu will offer a better margin, to tempt the distributors to push the products harder than competitors do. Distributors will have the same sales and support standards as the Ambu’s own sales and marketing staff. Monitoring and managing channels. For variety of reasons we consider that control is a necessary ingredient in running a successful strategy.
Having control is likely to have a positive impact on profits because inefficiencies can be caught and corrected in time. Ambu should have control of how products are presented, marketed and sold (in accordance with the country existing laws). Monitor the distributors’ performance on key performance indicators. Confidential interviews with distributors will be conducted 3-4 times a year, probably on the quarterly basis, in order to identify areas for improvement, as well as existing strengths to be encouraged and good initiatives supported. Possible problems.
Ambu’s selling online is in direct competition with its own channel partners/distributors. E-commerce is a strategy that could possibly cause ill-will with Ambu’s distributors. Conflict may be created when Ambu’s own ecommerce will be in direct competition with distributors whereby distributors will earn less profit for online sales than for offline sales. This possible cross-channel distribution is less likely, as minor percent of potential customers stated that they prefer buying online. Pricing strategy Pricing of Ambu’s products will be similar or even higher than the average price on the Polish market.
But we will not suggest that it will be the highest price on the market. Product Quantity Price (USD) Ambu Blue ECG Sensor 10 in a package 7 per package Ambu ECG Surface Electrodes Neuroline 700 12 in a package 9 per package A 30% discount will be offered to distributors. Quantity discounts are not included but remain possible in negotiations with major customers. Terms of payment are based on an average 45-day collection span. This is our suggested pricing. However, the strategy is to leave price set up and pricing negotiations to the distributors themselves.
Public relations and industry media will help Ambu in over-all industry awareness and product promotion plans. . In promoting Ambu’s products the most important factor will be displaying the superior quality of the products compared to other existing on the market products. Once the attention is acquired, Ambu will be able to generate a demand pull. We could propose two levels promotion strategy. The first level-activities imply the distributor’s own initiatives (advertising, personal selling, sales promotion and direct Marketing) Feature articles and product reviews will help launch awareness.
Direct mail to buying groups and ads in trade publications will help with buyer impressions. Finally, all will be integrated with sample materials and training video materials once the buyers’ attention and awareness has been obtained. We can propose the following magazines and newspapers: Sluzba Zdrowia29 and Puls Medycyny30 The second level-activities imply more responsibilities and activities from the sales and marketing department at the Ambu head office (public relations).
The implementation plan is supposed to guide Ambu in developing a successful exporting strategy. There would be proposed most relevant initiatives that Ambu should do in order to ensure the best possible results. We suggest planning the stages out with monthly deadlines and appropriate actions/responsibilities. A plan should be simple and measurable (objective). The implementation plan suggestion and support plan of action to marketing campaign (for distributors) suggestion are to be found in enclosure 10. Conclusion
This chapter presents the conclusions of the market analysis and the findings. Given the conclusions of the research, the chapter ends up with critical self assessment of the paper and recommendations for the other possible analysis that can be done further on. The aim of this project was to prepare a decision base for Ambu’s international marketing strategy. The assessment of Ambu’s international opportunities was done with the help of the screening process that involved gathering relevant information on each country and filtering out the less desirable countries.
The following countries were screened: Bulgaria, Czech Republic, Poland, Hungary and Romania The initial screening was done on the two levels: Macro level research, where general market potential was assessed and Preliminary opportunities, where general market relating to healthcare was assessed As a result of screening we suggested that Ambu A/S should choose only one country in Eastern European region, and that is Poland. Poland is potentially one of the biggest health care markets in the Eastern Europe.
However, the main complaint from foreign companies entering this market can be unstable political environment and negative economic projections, bureaucratic red tape, and persistent low-level corruption. The last two can result in problems regarding registration and certification procedures and requirements. Currently, the Polish government’s policies are aimed at meeting requirements for European Union membership. Polish authorities are being pressured from many sources to adopt European Union standards and to accept, without further testing, all products that are certified in EU countries.
However, it is still difficult to foresee when such a policy change will be in effect. Therefore, one of the best strategies for Ambu, which is interested in selling medical devices in Poland is to find a local partner/distributor who can assist them in responding properly to tender offers and with the existing procedures required to sell equipment in Poland. Price and quality are key factors considered by potential buyers. In Poland, doctors recommend medical products. A good marketing strategy is to keep them well informed about products.
This means that Ambu will need to have a distributor who can raise awareness of new products, attend medical seminars, conferences and exhibitions, and keep doctors informed by direct contact or by mail campaigns. Sales potential for the first year are estimated 897 packages for ECG Sensors and 466 packages for ECG Surface Electrodes, which will give profit of $ 10473. We assume that the first year ROI will show negative results if it could be calculated, but the situation will definitely improve when Ambu is on the market and utilizes its opportunities in best possible way.
The intention of the whole project and its parts was not to provide in depth analysis of the relevant issues but rather to flag the issues raised, as useful entry points for further and deeper discussion. We discussed only key information as we are limited in resources, time, opportunities and have paper space limits. We had to prioritize and sometimes use parts of the models in stead for the whole models. More detailed analysis should have been done in, for example, screening part. We did only macrolevel research, but there could be done microlevel research with analysis of specific factors affecting the products or each product.
Analysis of the survey could be done better if we did more cross tabulations that in its turn could result in better suggestions for marketing mix. We would like to give more explanations to the choice of information and how it could be used. There was lack of information that can be found only internally in the company, like profit per package of the product and production costs. Without this information we could not come with calculations of profits or ROI, but only our assumptions. Other possible analysis Screening on the micro level
The Act describes medical devices as all tools, materials, apparatus, equipment and other devices which solely or jointly with other equipment or software have been designed by its producers to be used on (or in connection to) human beings during the following processes: diagnosing, prevention, monitoring, treating or easing the symptoms of illnesses, diagnosing, monitoring, treating or easing the symptoms of injuries and disabilities, conducting research, remodelling of human anatomy or physiological processes, contraception, where this is not achieved by using pharmaceutical, immunological or Metabolic means (unless they are used as upplements).
The Act mentions three main groups of medical devices: active medical products for implantation – are defined as medical devices which depend on an external source of electricity or energy (not generated by the human body or by force of gravity) and which are permanently implanted into the body during surgery or via medical treatment, medical products which are used for in-vitro diagnosis including vacuum containers for samples and lab equipment for in-vitro research, Multi-purpose medical devices – all other medical devices. What is required to sell a medical device in Poland?
Polish law describes two different ways of bringing a medical device to market: “Placing” – means the first time a medical device is made available (whether for free or sold) for use or distribution, regardless of whether it is new or fully refurbished. This does not apply to medical devices intended for clinical investigations or in-vitro diagnostic medical devices for performance evaluation. “Putting into service” – means the stage at which a medical device is available to the final user (patient or health care professional) as being ready for use.
The law specifies a limited number of bodies that are allowed to register and sell medical devices. It is more important for manufacturers/distributors/sellers to have contracts or agreements confirming their status than to present health authorities with certificates confirming capability and being able to demonstrate experience in trading medical devices.
The right documentation (as far as local law is concerned) is far more important than relevant experience. Bodies mentioned in the Act are: medical device manufacturers, authorized representatives of medical device manufacturers, medical device importers, edical device distributors, Specialized agencies and companies responsible for bringing medical devices to market.
Only medical devices which are compliant with Polish law i. e. both The Medical Devices Act and any other regulations in force that are relevant to a specific device are permitted to be sold. The three major requirements for medical devices are: compliance with the so-called ‘basic requirements’ mentioned in an ordinance issued by the Minister of Health, especially regarding designing, manufacturing, packaging and labelling of such products, a ‘declaration of conformity’,
A ‘CE’ label (in cases of specific medical devices short transitional periods may apply). There are rare exemptions to the above rules, which apply in very specific cases to single device units. It is also very important that the CE marking used for medical devices must conform to the rules described in the ordinance published by the Minister of Health. Prior to launching, medical devices should be tested by a notification body in order to evaluate their conformity with legal requirements.
The notification body must be in possession of an ID number issued by the European Commission and be listed in the Official Journal of the European Communities. A list of the Polish notification bodies is provided at the end of this Paper. Provided local regulations are strictly followed, non Polish notification bodies are also acceptable. All medical devices should be accompanied by a Polish language user’s manual and description (including all markings, labels, etc. ). However, an exemption exists for some medical devices designed to be used by professionals who consent to non-Polish language instructions.
Even for products where the risks associated with improper use are much lower, it is highly unusual for professional companies to offer goods without good quality local language documentation. In addition to controlling the risk of legal action in the event of a “health incident”, local translation helps ensure that the device is properly used and maintained. In Poland medical devices are classified into six groups (four groups of multipurpose medical devices and two groups of specific use medical devices) depending on the potential hazards to human health through their usage.
The list of groups and their description can be found in relevant regulations issued by the Minister of Health. How to register medical devices? Medical devices must be listed in the ‘Register of medical devices and bodies responsible for their launch and usage” prior to marketing the device or its use by patients. This register is run by the Office for Registration of Medicinal Products, Medical Devices and Biocides.
The first step to get the medical device registered is an application supplied by the manufacturer directly or a company authorized to do business with the manufacturer (e. . an authorized representative or distributor) and registered in Poland. A special form should be used for this filing. A fee is payable (equivalent of €80 at the time of writing). Registry staff may require additional documents certifying and confirming statements made in the application. The application form and any attached documents should be prepared in Polish (despite the fact that the application form is bilingual), or translated by an approved Polish legal translator.
Given the speed of local bureaucracy it is recommended to double-check the application before submission to avoid being rejected, or suffering lengthy delays after two-month processing period. The same Office is also responsible for registering ‘medical incidents’ which are described as defects in a medical device’s functioning, a change of specification, improper marking or user’s manual descriptions which might cause hazards to the patient. In each case the manufacturer or their representative is responsible for carrying out an investigation.
Finding your medical device in the ‘medical incidents’ register may result in the product/company being deleted from the ‘Register of medical devices and bodies responsible for their launch and usage’, and as a consequence effectively barred from doing business in Poland. Do you have to register your medical device if it already has CE approval? The law says that ‘if you have CE marking you do not have to have the local approval’. The actual practice shows that most hospitals and doctors will not consider buying products without a Polish PL/DR number.
Thus even if in theory it may be possible to launch a product in Poland without local approval, commercial success very often requires it even if government officials may not. Application forms to take advantage of reciprocal CE recognition can be downloaded from the web site www. bip. urpl. gov. pl. Quality control procedures According to current Polish regulations medical devices which comply with legal requirements should be tested to make sure that using them will cause no harmful side effects. Clinical evaluations are carried out by the manufacturer of a medical device or by an authorized representative.
The evaluation process should be based on three sources: combined data from available medical literature describing the application area in which the device will be used, a written study containing a critical analysis of the above mentioned data, Results of clinical research conducted according to current legal requirements. Both multipurpose and active medical devices for implantation require clinical research. Data obtained from secondary sources (e. g. medical literature) is not sufficient to perform the clinical evaluation.
Such clinical research should be performed in order to: check whether the medical device’s specification described by the manufacturer comply with basic requirements of Polish law, Identify any possible harmful side effects which may occur during normal usage of the medical device. Before starting clinical research works the entity responsible for carrying it out must obtain specific permits issued by a bioethical commission and the Office for Registration of Medicinal Products, Medical Devices and Biocides. Permits are payable within a range of €220 to €1,100.
