Medical Equipment Market in the USA - Dissertation Example

?Research Proposal Table of Contents Research Proposal Table of Contents 2 Research Topic 3 Background and Academic Analysis 3 The Medical Equipment Market in USA 3 Market Trends 7 Academic Theory 9 Research Objectives 10 Research Methodology 10 Research Ethics 11 Time and Scale Resources 11 Reference 13 Bibliography 14 Research Topic The research would be based on the market development of a small medical equipment firm in USA. This research paper will evaluate and assess the strategies of market development to best suit the medical equipment industry. It is pretty significant to evaluate the market and the requirement of the customers before framing up market development strategies. Medical instrument industry is a significant component of an entire health care system. The proposal has started with a background analysis where the entire medical equipment market has been discussed. It is quite important to understand the market itself before entering into a specific market. In the later segments the research methodology would be discussed with research objectives. A brief discussion of the supporting theories has been also provided in this research proposal. Background and Academic Analysis The Medical Equipment Market in USA The medical and dental instrument industry in USA is diverse in nature and technologically dynamic in its operation. The medical devices come up in an extensive range of products used in the health care. The devices can range from mere tongue depressors to some extremely sophisticated diagnostic devices. The US medical and dental apparatus and supplies industry can be segmented in five different products segments including surgical appliances and supplies, surgical and medical instruments, dental equipment and supplies, electromedical equipments, x-ray apparatus and tubes (AASBEA, n.d., p.1-2). The products of this industry are articulated as follows. Surgical instruments such as clamps, syringes, suture needles and hypodermic, laparoscopic devices, stethoscopes, catheters and blood pressure measuring devices. Appliances such as wheelchairs, bandages, implantable devices and prosthetics. Dental equipments such as hand instruments, drills, plaster, cements, amalgams, dental chairs and sterilizers. X-ray tools and tubes. Electromedical apparatus like patient monitoring equipments, pacemakers etc. Diagnostic tools like ultrasonic scanning instruments, magnetic resonance imaging equipment. Ophthalmic goods like sunglasses, contact lenses and eye-glasses (Shippey, 1995, p.149). The growth of this industry would depend on the expenditures in national health care including the expense to come up with new regulatory norms to ensure effectiveness and safety in the instruments and appliances. Even the changes in the insurance coverage drive the growth in the medical instrument and appliances market. It is pretty significant to analyse the macro environment of the players operating in this specific industry. The macro environmental driving forces are determining forces to shape up the company’s strategies to place itself in the market. Macro Environment Analysis – PESTLE Analysis Political and Legal Environment – The medical instrument industry in US is governed by several regulatory norms; some of them have been quite influential to the industry itself. Such a norm, 1990 Safe Medical Devices Act, redefined the processes to bring in medical instruments to the respective market. This norm was established to ensure the safety and effectiveness of the products pouring into the market. For an instance, manufacturer of certain medical instruments must include the safety and effectiveness data in the premarket notification applications. As per the law, the high risk apparatus which had been introduced after the year 1990 are required to have post market surveillance. Furthermore, the insurance programs flaunted the necessity of capital stuffs like expensive radiology products such as computed tomography scanners. The post market surveillance of the medical instruments is at the discretion of the Food and Drug Administration (FDA). The post market surveillance of any medical instrument can be required to happen if the agency assumes this to be necessary to ensure safety of the public health. There are some more provisions for the hybrid products including drug, device or biologic. Some of the regulations re related to the distribution channel and tracking of end use of the devices. There are a number of norms which demand that the hospitals as well as the other end users must report the faulty medical devices. In US the relevant law in this specific industry is quite stringent in nature. The manufacturers who are not in compliance with the specific norms and practices can face the civil penalties or even the termination of their shipments. Furthermore, the major end users of this medical equipment, hospitals, can experience tremendous pressures from the government as well as some other third parties to reduce the increasing health care expenses. This pressure to curtail the cost has adversely affected the entire financial state of the health care industry. As a consequence, the profit margin in the specific medical equipment industry is expected to shrink with incorporation of changes in the delivery of the health care instruments. This, in turn, is expected to determine the instrument types which would be purchased by the hospitals as well as other specific end users. There are regulations which shape up the import of the medical devices to USA. The foreign manufacturer of the medical instruments and appliances which emanate radiation and are imported to United States must comply with the required norms. The norms are required to be followed before, during as well as after importing the devices to US and the including territories. The authorisation to allow the importing of the devices, which discharge radiation into the United States, lies with FDA. The agency does not recognise the regulatory grant from some other countries. Economic Environment – The recent recession has put further pressure on the medical devices industry. With the declining US economy, some hospitals have curtailed their costs to increase their profitability leading to putting on pressure on the medical device industry. The small manufacturers of medical instruments are more affected rather than the larger ones. Social Environment - The social environment of US has enhanced the requirement of sophisticated medical instruments with enhanced quality and improved effectiveness. With the enhanced lifestyle of the people in US, the requirement of medical instruments with high quality has surged high. Technological Environment – UA is known for its innovation and its ability to introduce new products. The medical device industry in US continues to devote growing amount of resources to come up with new and enhanced products with high quality. The technological advancement has just accelerated the new product development as well as marketing of the same. As the internet users are growing in numbers, worldwide web has come up as an innovative and string platform for the manufacturer to advertise and market their products to the companies across the globe. This has emerged as an enhanced opportunity for the small players dealing in this industry. This can be seen as a mean to explore the opportunities outside US. Environmental Factor – In the wake of the recent environment awareness, the customers may prefer the devices and tools which are in compliance with the environmental regulations. The end users may prefer environmentally safe tools and instruments to be used in the medical industry. Market Trends In the year 1993, the US medical and dental equipment manufacturers were able to fetch US $ 81 billion globally. At that time, the manufacturer used to supply considerable percentage, around 52 percent, of the total global market output. The industry also exports a considerable amount of its output to outside US. In the year 1993, around 23 percent of the industry output was exported to other countries. Demographic trends are also emerging as an opportunity for the medical device manufacturers. The growing number of aging population will be a determining factor to influence the demand for surgical appliances and supplies. Some other factors which have also been influential to promote the demand in the global market are upgraded health care systems and the introduction of one single market in European region. With the growing pressure on the hospitals to curve out the expenditures, the hospitals and nursing homes are expected to favour the products which can offer the patients care for a long period of time. This situation, in turn, ahs increased the demand for wheelchairs, orthopaedic aids and prosthetics which can give greater capacity and mobility for self care. The ophthalmic industry in US is an import oriented industry. This industry majorly relies on the foreign suppliers. The overseas suppliers have dominated the market with low end sunglasses and frames. However, US has always been one of the leaders high end sunglasses, contact lenses and enhanced lens technology (Shippey, 1995, p.148-149). The medical device organisations in US are highly regarded across the globe for their product development, innovation and enhanced technology. Since the 1990s, the investment in the research and development has increased considerably. The medical instruments industry continues to fetch advantages from the introduction of new materials, technology such as micro-electro manufacturing systems (MEMS) and nanotechnology as well as imporved manufacturing processes. The industry is driven by innovation and its continual quest for enhanced means to treat or diagnose the heath care issues would extend the future growth prospective towards a positive way (International Trade Administration, 2008, p.3). Academic Theory To develop a market for any business, it is pretty important to be aware of the requirement of the target customers, the quality and attributes of the product, the price of the same and the distribution channel through which it would reach out to the customers. All these are the significant components of the ‘marketing mix’. The marketing and distribution process is significant as the significance of production gets diluted if the products are not old to the target customers. Marketing mix is a way to design and integrate the different marketing elements in way which would be sufficient to ensure the attainment of the organisational objectives (National Institute of Open Schooling, n.d.). The marketing mix elements would include product, price, place and promotion. The product is required to be safe and secured on the public health as well as it must provide comfort to the health care systems. Price is a significant factor which would determine the sales volume of the specific instruments. Furthermore, the price of the products must be in accordance to the perceived value of the customers (Ehmke et. al., n.d.). Place refers to the distribution channel ad the specific market where the instruments would be offered. Promotion is another significant activity which is important to market the product and to attract the customers. Furthermore, the marketing division must consider the effect of the external factors such as competitors’ strategy, consumer behaviour and the Government policies to frame out an appropriate market development strategy for the market development. Research Objectives The objectives of the research are articulated in the following paragraph. To analyze the macro environment of the specific industry To analyze the competitive environment of the market. To assess the marketing mix of the organization. To assess the micro environment of the company. To analyze the customer requirements with an assessment of the trends in the market. To evaluate the strategies to come out with an appropriate strategy suitable for a small medical device manufacturer. Research Methodology Plutchick R has said that “Research has its origin in a team which means to go around or to explore... And it is a combination of Re+Search” (Khan, 2008, p.2). The research can be seen as a comprehensive way to accumulate relevant data and information and analyse the same to come out with a proper solution to the issue under study. In this case, this research would be based on both the primary as well as secondary research data. The secondary research would be mostly used to understand the past trends in the market, the products and the competitors in the medical device industry. On the other hand, the primary research would concentrate to fetch the requirements and preference of the end users of these instruments. For the primary research, a questionnaire would be made to interview ten hospital and nursing homes to understand their requirements. Analysis would take both quantitative and qualitative approach to frame out the market development strategy of the medical instruments market. Research Ethics As per Scooper and Schindler, “Ethics is made up of norms and standards of behaviour that guide moral choices about our behaviour and our relationships with other” (Herbst & Coldwell, 2004, p.18). The researcher would ensure that no one would suffer from the consequences of this research and its outcomes. Effort would be also given to provide the information at its original form without any personal biasness from individual viewpoints. Time and Scale Resources The Timeline of this research project is as follows. Task-1 Accumulation of relevant secondary data and information Task-2 Interviewing the end users Task-3 Accumulate the responses Task-4 Analyze the responses Task-5 Framing up the marketing development plan Task-6 Report Writing The following figure reveals the required days to accomplish the above tasks. Reference AASBEA. (No Date). U.S Medical Devices Market. [Pdf]. Available at: http://www.aasbea.com/img/How-to-Import-Medical-Devices-into-the-US.pdf [Accessed on April 15, 2011]. International Trade Administration. (2008). Medical Devices Industry Assessment. [Pdf]. Available at: http://www.ita.doc.gov/td/health/Medical%20Device%20Industry%20Assessment%20FINAL%20II%203-24-10.pdf [Accessed on April 15, 2011]. Ehmke, C., Fulton, J. & Lusk, J. (No Date). Marketing’s Four P’s: First Steps for New Entrepreneurs. [Pdf]. Available at: http://www.extension.purdue.edu/extmedia/EC/EC-730.pdf [Accessed on April 15, 2011]. Herbst, F. & Coldwell, D. (2004). Business Research. Juta and Co Ltd. Khan. (2008). Research Methodology. A P H Publishing Corporation. National Institute of Open Schooling. (No Date). Marketing Mix. [Pdf]. Available at: http://www.nos.org/srsec319/319-22.pdf [Accessed on April 15, 2011]. Shippey, C. K. (1995). USA business: the portable encyclopedia for doing business with the United States. World Trade Press. Bibliography Baker, J. 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