Strategy or Tactics—What Should be the Focus for Medtech in 2022?
Successful business executives know that strategy is important (it’s a given, after all) but they also understand the most effective plans focus on winning methods.
With the events of the past two years, companies are under tremendous pressure to ensure both their strategy and tactics are moving forward. Strategy must be directionally correct and tactics should be laser-focused to foster operational growth and guarantee an organization’s overall objectives are being achieved.
In 2019, many overall business goals were outlined around important purposes, including: core markets, growth opportunities, R&D investments, and adapting to dynamic industry changes. Tactics then were likely to revolve around the execution of those strategies with a focus on sales and marketing, R&D, supply chain, and operational efficiencies to improve profitability.
In just three years, the business climate is dramatically different. C-suite executives now face unprecedented global dynamics that impact every industry, including medical technology.
The relatively easy part of drafting a business strategy is to consider the strategic implications of current market trends. In contemplating the industry’s natural evolution toward digital health, robotics, 3D printing, artificial intelligence/machine learning, wearable technology, and ambulatory surgery centers vs. in-hospital procedures, as well as COVID-19 influences on healthcare, the task can seem insurmountable and challenging, but not impossible to achieve.
However, when those ongoing market forces are combined with “unknown variables” that individual business owners and even the industry itself cannot control, business strategy becomes a significantly more difficult goal to attain. Issues like government policies for newly-discovered COVID-19 variants, uncontrollable inflation, rising oil prices (somewhat related to inflation but its own separate issue now with Russia’s invasion of Ukraine), geopolitics (think China and Russia and their respective spheres of influence), and supply chain “what now” moments are impacting the medtech sector in ways never before seen. It’s a challenging time to lead a device company but perseverance, resilience, and flexibility can help executives survive and thrive in an uncertain world.
The upheaval and change impacting the medtech industry practically on a daily basis should prompt companies to re-evaluate their organizational focus in 2022. One key question to ask: Will a focus on strategy or tactics yield success?
Leaders, of course, know that strategy and tactics are both important. But they also are smart enough to realize a natural gravitation toward one or the other is inherent, based on the needs and opportunities of a particular company at any given point in time.
Certainly, business executives are not about to give up one for the other. Strategy vs. tactical focus is an ongoing battle within any entity. But in today’s environment, medtech companies must identify their most promising opportunities and their most significant threats, and determine which one requires (and/or deserves) more time, attention, and focus from top management.
From a strategic perspective, businesses that do not move forward will eventually slide backward. Yet from a tactical viewpoint, organizations that are focused only on strategy and fail to execute their plans will struggle with future growth and viability.
Fortunately, there are numerous strategic options currently available to companies. While every medtech business varies, these options likely will be taken into consideration:
China—Companies must reassess their current and future presence in the Middle Kingdom, as it is one of the world’s largest medtech markets but now also one of the most difficult in which to participate. Its policies on COVID-19 and partiality for local manufacturing make it difficult for any company not currently producing there to break into the market. At the start of 2020 (pre-pandemic), it made sense for companies to be there and to include Taiwan and Hong Kong in their strategic plans. Does it still make sense now? It’s a good question to ask.
CIS Countries—The Commonwealth of Independent States includes Azerbaijan, Armenia, Belarus, Kazakhstan, Kyrgystan, Moldova, Russia, Tajikistan, Turkmenistan, Uzbekistan, and Ukraine. Many companies have adopted a common sales and marketing approach for this territory but Russia’s recent invasion of Ukraine could impact that strategy. Organizations must determine whether the fallout from that unrest is limited to the warring countries or extends beyond those borders to the entire region.
Brazil and India—These countries were part of the BRIC block (Brazil, Russia, India, and China) until the latter member grew big enough to sustain its own market. Russia was long considered a hotbed for international investment but missed its growth targets over the last 10 years. And now, as the country grows more isolated both politically and economically, Russia’s prospects for capturing a significant share of global GDP looks grim. India’s economic engine has stalled in recent years due to missteps by its leader while the Brazilian market has been hampered by corruption scandals and a detrimental dependency on global commodities for its development. With current world events and BRIC no longer a solid building block to market dominance, companies must decide if these countries still factor into their long-term business strategies.
Data—Although most companies do not control data, they certainly contribute to the volume of it. “Data” used to be a somewhat aspirational and abstract concept but has now become a clear driver of reimbursements, product development, and daily healthcare. Companies must determine their role in producing data and the ways it can shape their business strategies.
Healthcare Delivery Changes—Whether medtech organizations like it or not, healthcare delivery is constantly evolving. An increasing number of procedures, for example, are taking place in ambulatory surgery centers (ASC) rather than hospitals. Similarly, clinicians are gravitating toward remote patient monitoring (RPM) for better outcomes. While these trends may initially seem somewhat benign they nevertheless are impacting medical device manufacturing’s future. Case in point: Products currently sold for in-hospital use may be unsuitable for ASC customers. Likewise, hospital solutions for patient monitoring are different from remote options. These dynamics require companies to adapt to new solutions for new product environments, even if the core product use is similar. Consequently, organizations must be prepared for these new use environments.
Inflation—This is a serious market force with potentially alarming market repercussions.
Supply Chain—The issues vexing the world’s supply chains have never been more complex. From dynamics like geopolitical issues, fluctuating oil prices, shipping container availability, material shortages, natural disasters, and COVID-19 hot spots and policies (regionally and globally), there are many kinks in the supply chain that could impact product development and delivery. Companies must ensure their supply chain solutions sync with their strategic objectives.
There are, of course, more strategic implications to consider but these are some of the high-level macro issues to consider this year. Medtech companies nowadays should always be “sharpening their sword” to adapt and respond to changing market forces that potentially can impact daily operations. These changes also have become more laborious than ever.
With so many market uncertainties swirling about, medtech organizations ought to review their overall business plans to determine whether they should focus more on strategy or tactics this year. While it is always good business practice to consider both, one will eventually win out over the other. Make sure it’s the one that leads to future success.