GIA Conference Presentation October-12

www.smiths-medical.com © 2012 by Smiths Medical: Proprietary Data

Embedding Market Intelligence in Strategic Planning and ImplementationNadia Smulian Director, Market IntelligenceOctober 2012

© 2012 by Smiths Medical: Proprietary Data

2

Nadia Smulian Oct-12

Smiths Group: how it all began

1851…

Early 20th century…

1930s…

…and now

Clocks & Watches

Avionics

Car Speedometers & Odometers


3


FY 2012 sales £3.04 Bn

Headline op profit £554 m

Operating margin 18.2%

EPS 92.6

Market cap ~£4.3 Bn

FY2012 Sales


4


Smiths Medical: Bringing Technology to Life

Deliver Medication Provide Vital Care Keep People Safe

• Reduce programming & delivery errors with intelligent pumps

• Relieve acute & chronic pain

• Treat cancer

• Manage acute and chronic airway conditions

• Maintain correct body temperature

• Monitor vital signs

• Assist reproduction

• Provide safe treatment access

• Prevent needle stick injuries

• Reduce cross infections

Our mission is to help healthcare professionals make every intervention successful.

Vision: Save lives by becoming the most valued global provider of innovative interventional medical devices in our chosen markets

Vision: Save lives by becoming the most valued global provider of innovative interventional medical devices in our chosen markets


5


Market Intelligence is part of the Global Strategy team…because we asked to be!

Director

Strategic Planning & Business

Development

Nadia Smulian

Director

Market Intelligence

Director, Strategic Project

Management Office

Director, Business Intelligence

Michael Munro,

Market Intelligence

Analyst

Kathy Surry,

Manager

Market Intelligence

• Competitor tracking

• Strategic Analysis

• Economics

• Market modelling, news & trends

President,

Smiths Medical

VP, Strategy

& Business Transformation

Clinical Marketing & Scientific Affairs

• Clinical & technology trends

• Voice of customer

• Sales performance

• Customer segmentation

• Sales targeting


6


Our activities support Smiths Medical’s strategic growth drivers

Global & Local Market Intelligence

•Competitor activities

•Market related

•Product related

1 2 3 4 5

Competitor performance tracking

•Benchmarking vs. major competitors

•Opportunities & threats

•Competitor views of our markets

1 2 3Strategic analysis

•Strategic Direction

•Identifying & prioritising opportunities

1 2 3 4

Economic & market trends

•Integrated Business Planning

•Strategic planning

•Benchmarking vs. market

1 2 3 4 5

Market mapping

•Prioritising opportunities

•Support for investment

1 2 3 4

12

3 4

5

Market modelling

•Emerging markets

•Adjacencies

2 3

Smiths Medical’s Strategy Gears:

New products

New markets

New call-points

Market penetration

Efficiency


7


Mapping the Strategic Landscape

Strategic Planning

Know the Market

• Size and growth

• Competitive landscape

• Drivers & trends

• Customer needs & behaviours

• Adjacencies & other opportunities

Know the Competition

• Where are they being un/successful – and why?

• What is their strategic direction?

• How are they/might they impact us?

• What do they think about the market?

Know Yourself

• Portfolio strengths & weaknesses

• Capabilities

• Stakeholder expectations


8


Synthesis & discussion


9


Continuous monitoring Continuous discussion & insight generation

Competitor performance tracking

News monitoring

Macroeconomics,Healthcare activity, etc

News alerts with insights/ questions

Ql’y competitor performance

& trends reports

Monthly market trends reports

Synthesis


10


Know the Market: The Global Market Map

Competitor earnings calls, investor presentation, press releases etc

3rd Party Reports

Analysts Reports

Internal knowledge

Market monitoring


11


Know the Market: The Global Market Map

By major product segment:

Market Size

Market Growth rates:

• Historic & forecast

• Organic & other

Market Shares

• Smiths Medical

• Main Competitors

Franchise 1 Franchise 2 Franchise 3 Franchise 4


12


Understanding growth drivers & restraints

Growth opportunitiesRisk assessment

Products:Clinical trendsTechnology adoptionLegislation…

Regions:Economy DemographicsHealthcare investmentRegulation…

Competitors:LandscapeWinners /losersActions… & reactionsNew entrants& fast movers…

Customers:RequirementsBuying behaviourSatisfactionwith suppliersCall-points…

Supported by continuous monitoring and synthesis


13


Opportunity ranking

“The essence of strategy is choosing what not to do.” – Michael Porter


14


Market Growth

0

Market Attractiveness Competitive Strength

Profit potential

0

Market concentration

0

Barriers

0

0

Skills & Capabilities

0

Cost position

0

Competitive position

0

Product position

0

Opportunity ranking: existing & potential new initiatives


15


Opportunity ranking: existing & potential new initiativesM

arke

t attr

activ

enes

s sc

ore

Competitive strength score

= Market size

Develop/acquireStrategic partnerships

Why bother? Maintain


16


Franchise Capabilities Customers Market Competitors

Initiative 1

Initiative 2

Risk assessment

• Current activities

• Capabilities

• Potential reaction

• New legislation

• Regulatory bodies

• Changing practice

• Hospital economics

• Benefits?

• Technology?

• Routes to market?

• Credibility?

Can we win?


17


Regional investment

Market size modelling

Market parameters:

• Patient numbers

• Bed numbers

Clinical knowledge:

• Product usage

• Replacement frequency

Local factors:

• Healthcare spend

• Local practice

Estimated Market

Potential


18


Regional investmentEmerging markets comparator: Which countries are best for investment?

Portfolio Gap Analysis: Which products are under-penetrated in a country?

Country Market SizeHistoric Market Growth

GDP Growth Import SpendHospital Beds

per 1000 Population

Private % of Total

Healthcare

Population Growth

% of Population

over 60 Years

% of Upper-Middle/Rich

Class

Corruption Perception

Index

Intellectual Property

Rights Index

Ease of Doing Business Index

Ease of Registration

Overall Rating

A £5,883 -3.7% 9.9% £365 0.8 11.0% 2.8% 4% 9.8% 2 125 172 1 2.6B £647 7.0% 2.7% £137 0.4 44.8% 2.7% 4% 3.8% 2 117 183 4 1.5C £2,499 17.4% 4.9% £2,255 1.2 23.1% 1.9% 5% 24.7% 3 NA 170 4 3.5D £16,826 10.2% 5.9% £281 1.4 66.2% 2.7% 4% 15.0% 5.1 100 109 1 4.7E £1,693 -0.4% 4.0% £257 0.3 32.9% 2.9% 5% 3.0% 3 107 137 4 1.4F £5,168 2.3% 6.9% £99 1.1 26.4% 3.1% 5% 1.7% 3 75 127 1 4.2G £104,505 7.2% 2.3% £765 2.8 59.9% -0.4% 7% 15.5% 5.1 32 35 2 5.9I £3,735 26.3% 6.3% £145 1.9 40.5% 2.1% 5% 30.5% 3.2 84 84 4 3.7


19


Measuring success

Organic growth vs. major competitors

Source: Competitor Quarterly/Annual Reports and Investment Analysts’ reportsAll growth figures are at constant currency and exclude acquisitions/divestitures

Competitors’ Quarterly Growth (%) in Competing Segments

Quarter

% organic revenue growth

Competitor averageAdjusted for H1N1

Historic Forecast

“However beautiful the strategy, you should occasionally look at the results.” – Winston Churchill

Share trends


20


How to Communicate Strategic Intelligence to Top Level Executives

• Answer the questions that they get asked

− How are we doing compared to our major competitors?

− What is happening to market growth …and what will happen?

• Be first with the news – and add insight

• Be part of the schedule

− Regular inputs to monthly Divisional Board meetings and Quarterly Board reviews

• Don’t be afraid to communicate directly – as long as you have something useful to say


21


The “Market Intelligent” Company

• MI team proactively creating and sharing global competitor & market insight

• Core part of strategic planning & performance review

• Culture of MI-driven decision making

• Part of everyone’s mindset & something everyone does

• Network of trained local intelligence co-ordinators

MI that is global and local

Deeper & broader insight

• Closer integration of customer insight

GIA Conference Presentation October-12

Documents

Transcript of GIA Conference Presentation October-12