EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity.
Almeida ShareDifferentiating differentlyFor several years, we have written about two trends in health care that are transforming the medical technology business – an increasing emphasis on value and patient-empowering, information-leveraging technologies (PI technologies).
Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. From the confluence of these trends emerges an additional risk that could affect medtech business models: the threat of commoditization.

For manufacturers, this process fundamentally changes the nature of competition in a business segment.
Strategies to remain competitive could include partnering with companies in emerging markets, reverse innovation or acquiring scale to gain bargaining power with health care purchasers.Move upstream into a higher-value segment, either by innovating within existing product lines or adding new products. This is the preferred approach for companies with products that are already well differentiated and that want to continue to demonstrate that their products add value and merit premium pricing.Create stickiness.
Whether they apply will depend on a range of factors, including the company’s therapeutic focus and stage of development.

Moreover, to be successful, companies may find it beneficial to develop a strategic plan that incorporates multiple differentiation mechanisms.The shape of things to comeIn an effort to stave off commoditization, companies must also rethink their branding strategies.
They will need to move beyond product-specific branding to develop messages that emphasize their customer-centricity, reliability and partnering capabilities.

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