Competitive Analysis for Bioresorbable Vascular Scaffold (BSV) Market

1 Competitive Analysis for Bioresorbable Vascular Scaffold (BSV) Market Introduction Several medical companies operate in the Irish market, which particularly deal with the design, manufacture, and selling of bio-medical devices, such as Bioresorbable Vascular Scaffold (BSV). Among the companies operating in this industry include Terumo UK Ltd and Lombard Medical Technologies. This paper seeks to analyse the Irish market with particular focus on the external and internal capabilities of the players and the industry at large.

Competition The main competitors in the BVS industry in Ireland include Lombard Medical Technologies and Terumo UK Ltd. These companies cover the entire United Kingdom as well.

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2 PESTEL Analysis: Lombard Medical Technologies Political The Irish government has set up policies which aim at subsidising medical devices manufactured or sold in the country (European Commission 2012, para 6). This has made it possible for Lombard Medical Technologies to easily operate in the market.

The government has also instituted quality regulations which aim at ensuring that all medical devices sold within Ireland meet specific quality levels. These regulatory measures force Lombard Medical Technologies to incur costs in ensuring that the quality stipulations and regulations are met.

Economic Fiscal features such as interest rates and foreign exchange rates keep on fluctuating throughout the financial periods in Ireland. These factors affect the operations of Lombard Medical Technologies in a number of ways. Rising interest rates negatively affect the company’s revenues as well as its profit levels. Fluctuating foreign exchange rates also affect the ability of the company to import goods, thus forcing the company to adjust prices in order to accommodate the situation.

Taxation rates introduced by the government on a yearly basis also affect the company’s profitability. When taxation rates are raised, the company is forced to charge expensively for its devices so as to recoup the extra amount paid to the authorities as taxes. This affects the company’s market performance negatively because increase in prices lowers the demand.

Social Ireland is experiencing a changing demographic pattern in which case the number of the old is increasing while the number of children and the young are slightly decreasing. This has

3 also seen an increase in endovascular related problems. These changes have provided Lombard Medical Technologies with a steady market throughout Ireland.

Technology Advancement in technology has enabled Lombard Medical Technologies to reduce the cost of operation it incurs on an annual basis. The company has improved its efficiency on performance, enabling it to make profits.

Legal The Irish government has introduced consumer protection laws which require all medical devices manufacturers to adhere to them. These laws require players in the industry, such as Lombard Medical Technologies, to pay special attention and ensure the laws have been strictly observed.

Market competition laws also exist which govern the way players in the industry, such as Lombard Medical Technologies, carry out their general marketing activities. These laws include ethics in advertisement and disclosure of information. Companies must ensure that they observe these requirements to the latter.

Employment of workers must also be conducted within the specified legal framework.

Companies must not contravene such laws as the minimum age of employment or even dismiss workers without following the laid down regulations.

PESTEL Analysis: Terumo UK Ltd Political The government has introduced subsidy policies that mainly aim at supporting medical devices industry. Operations by industry players, such as Terumo, have been sustained by the existing subsidies which basically eliminates existing business barriers.

4 The government regulates the entire industry through policies that it formulates. These regulations are mandatory for all industry players. They include trade licences and other operation licences granted before a company can legally be allowed to operate.

Economic External economic features such as foreign exchange rates and interest rates charged affect the operations of Terumo UK Ltd in the Irish market. These factors are not fixed and therefore, they keep on fluctuating. These also force the company to revise its prices regularly so as to ensure that the costs of operation do not exceed revenues earned. Increase in interest rates implies that the company pays more for services such as banking and loans rendered to it. When the local currency also loses value with respect to other foreign currencies, the total cost of operations also becomes expensive.

Variation in taxation rates affects profits. When the government increases tax rates, the company is forced to increase its prices so that it can maintain the same profit margins as before.

Taxation decrease, on the other hand, provides an opportunity for the company to lower its prices.

Social Most developed countries in Europe, including Ireland, have a similar demographic pattern where the majority of the population are adults while children are fewer. This provides market opportunity for medical companies dealing in endovascular equipments. More adults are likely to suffer from such related illnesses as compared to children.

Technological

5 Technological advancement in Ireland has enabled Terumo to improve on the overall efficiency of its performance. The company has managed to maintain its cost of operations as low as possible.

Legal There are legal requirements which govern the operations of medical companies in Ireland, such as Terumo UK Ltd. These legal requirements include consumer protection laws, employment laws, and market competition laws. All companies in the industry are requires to observe these laws strictly.

SWOT Analysis: Lombard Medical Technologies Strength Although Lombard Medical Technologies is a UK registered firm, the company operates globally with operations spreading in numerous countries. This gives the company competitive advantage ahead of its competitors within the Irish market (Lombard 2012, para 3).

Weakness The company does not have a wide product portfolio. Its only business focus is the manufacture of endovascular stent grafts. This means the company has not spread its risk widely.

Opportunity With its global scale of operation, Lombard Medical Technologies has a widespread opportunity in form of international market. The company may not necessarily need to rely on one market.

Threat With the company focusing on a global market, it is possible for it to fail to concentrate on a specific national market and therefore, meet intense competition.

6 SWOT Analysis: Terumo UK Ltd Strength Terumo UK Ltd deals in a very wide range of products. The company has managed to spread its risk over the wide range of products, making it more stable.

Weakness The company’s size is relatively smaller to effectively serve the whole of UK, including Ireland. Its workforce size is 37 employees, which is relatively smaller for the market. Terumo UK was established only in 2003, making its market experience relatively less strong (Terumo 2012, para 2).

Opportunity Terumo UK Ltd enjoys huge expertise and market experience from the parent company, Terumo Europe. This implies the company can comfortably borrow support from its parent company and use it to compete with its rivals.

Threats The wide range of products and services offered by the company could affect its focus on total quality and efficiency. This may pave room for rivals to exploit its market.

PESTEL Analysis: Bio-reburgeon Ltd Political Government policies in Ireland provide market subsidies that can be able to support the operations of players in the industry. These subsidies will particularly assist Bio-reburgeon Ltd in strongly establishing itself in the market.

Economic

7 Factors in the economy, such as interest rates and foreign exchange rates will affect Bioreburgeon Ltd operations, especially its pricing strategy.

Social The company is likely to serve a growing market in Ireland due to the demographic structures of the country. The population increases in number as it advances in age, which is mostly affected by endovascular related diseases.

Technology Ireland’s level of technology use in the medical industry is at an advanced level. This will provide a chance for Bio-reburgeon Ltd to improve its efficiency in operation and maintain costs at a minimal.

Legal There exists legislation in the industry which generally controls the operations of players and other stakeholders. The legislation includes consumer protection laws, market competition laws, as well as employment laws.

SWOT Analysis: Bio-reburgeon Strength The company boasts of a wide experience amongst its workforce. This ensures the quality of its products and services are maintained at very high standards.

Weakness Bio-reburgeon has only been launched into the Irish market. This puts it at a weaker position relative to its competitors who have been in the market for longer durations of time.

Opportunity

8 The company has introduced a range of products and services which potentially spreads its risks across a wider portfolio.

Threat Bio-reburgeon Ltd has only focused on the Irish market. The company has not established other markets outside Ireland (Ferrell & Hartline 2011, p. 122).

Conclusion The Irish market of Bioresorbable Vascular Scaffold (BVS) comprises of several players who manufacture and sell medical devices. The companies include Terumo UK Ltd, Lombard Medical Technologies, and Bio-reburgeon Ltd. The government controls the industry through setting of policies that mainly provide subsidies for the players. The main economic factors that influence operations of the players include fluctuating interest rates and foreign exchange rates.

This forces the companies to adjust prices so as to maintain costs as low as possible.

9 List of References European Commission 2012, General government expenditure statistics, [web] Available at http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/General_government_exp enditure_statistics [Accessed Nov 5 2012] Ferrell, OC & Hartline, M 2011, Marketing strategy, South-Western, Mason, OH Lombard, 2012, Lombard Medical Technologies Plc, [web] Available at http://www.researchandmarkets.com/reports/697867/lombard_medical_technologies_plc [Accessed Nov 5 2012] Terumo 2012, Company profile, [web] Available at http://www.terumo-europe.com/terumo/branches/terumo_united_kingdom.php [Accessed Nov 5 2012]