1 vextec technology marketing plan aashish bapat, april boldt, jason deaner, grainger greene, dani...
TRANSCRIPT
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VEXTECTechnology Marketing Plan
Aashish Bapat, April Boldt, Jason Deaner, Grainger Greene, Dani Shuck
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Technology Marketing Plan
I. Capabilities Analysis II. Technology Marketing Intelligence III. Marketing Segmentation IV. Leverage and Resistance Points V. Industry Analysis VI. Value Proposition VIII. Interviews
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Capabilities Analysis
VEXTEC is a Product Leader Unique technology, patented
Core competency is modeling the physics of failure
VPS-VIEW with VPS-MICRO performs this
VEXTEC also excels in Customer Intimacy Does not translate into
Medical Device sector, unknown in this industry
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Technology Marketing Intelligence
Important Questions: What is the current method by which prosthesis manufacturers
perform reliability analysis, if at all? How much does this method cost? Capital costs and recurring costs
per unit? How satisfied are you with your current method? Can a virtual physical testing method possibly become approved by
medical safety boards such as the FDA in the U.S. or ISO in Europe? How much money and time can VEXTEC save a company on
reliability analysis, and how much can they improve a company's product?
Is the prosthesis market large enough and interested enough to bother entering this market?
Have you considered alternative approaches to reliability analysis, and what conclusions did you draw?”
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Technology Marketing Intelligence
Future Contacts: Ossur Endolite Ottobock Medi Fillauer Freedom Innovations Ohio Willow Wood Smith-Global Bulldog Tools DAW
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Future contacts continued
Meeting with Prof. Burcham Owen Business School faculty Health care specialist CEO of Paradigm Health a health care
provider for specialty care Consultant to healthcare and venture firms
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Market Segmentation
3-Screen Technology Market Scan Figure 2: Importance-Advantage Map
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Three-Screen Technology-Market ScanThree-Screen Technology-Market Scan
Need Screen
Economics Screen
Time Screen
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Needs ScreenNeeds Screen
Feasibility - Will it work in the intended application? (Can we deliver?)
“Criticality” - How critical is this application to the overall mission or financial performance of the customer organization?
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Economic ScreenEconomic Screen
Performance/Value AdvantagePriceEase of UseReliability
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Time ScreenTime Screen
Readiness to solve problem Cognizance (“shopping”) vs.
precognizanceReceptiveness to new technology
e.g, early vs. late adopters
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Time Screen (ctd)Time Screen (ctd)
Compatibility with customer operations Word processors vs. nuclear reactors
Dependence on other technologies Market Concentration/Heterogeneity Customer Buying Practices Competitive Intensity
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Importance-Advantage Map
ImportanceAdvantage
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The “Winner”The “Winner”
ImportanceAdvantage
Important to Market/CompetitiveTechnology
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Strategy for the WinnerStrategy for the Winner
ImportanceAdvantage
GO
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Technology Ahead of its TimeTechnology Ahead of its Time
ImportanceAdvantage
Unimportant to Market/CompetitiveTechnology
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Strategy for Technology Ahead of its TimeStrategy for Technology Ahead of its Time
ImportanceAdvantage
DevelopMarket
RedeployAssets
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VEXTEC VPS-MICROMedical Device Market
Readiness
Funding/ PartnershipsLiab. Risk
Competitive IntensityBuying Prac
Mkt Conc
Compatibility with Customer Operations
Receptiveness to New Technology Price Sensitivity
Avail Complementary Tech
Reliability
Ease of Use
Performance/ Value Advantage
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1.5
2
2.5
3
3.5
4
4.5
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1 1.5 2 2.5 3 3.5 4 4.5 5
Relative Importance
Rel
ativ
e A
dva
nta
ge
Superior but Unimportant in thisapplication- Develop market- Search for other markets
Important but Inferior- Invest in Improvement
Important and Superior- Deploy
Inferior but Unimportant- Reallocate resourcesto other factors.
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Industry Analysis
Michael Porter’s industry forces model
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Five Competitive Forces
that Determine Industry Profitability
Suppliers Buyers
PotentialEntrants
Substitutes
IndustryCompetitors
Rivalry amongexisting firms
Bargainingpower
Threat of substituteproducts or services
Bargainingpower
Threat ofnew entrants
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Analyzing Porters Forces(Strengths are on a 1-3 scale, with 3 the strongest)
1. Industry Competition / Rivalry (Rating 2) Cutting edge technology, unique approach No direct competitors In house reliability testing methods
2. Potential Entrants (Rating 3) Proprietary rights High R&D costs and time
3. Supplier (Rating 2) Device Testing Databases
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Porter forces (contd…) (Strengths are on a 1-3 scale, with 3 the strongest)
4. Buyer (Rating 1.5) Lack of confidence/ Inexperience in medical device
industry
5. Substitutes (Rating 1) More expensive, theoretically weaker but age-old
proven industry norm : physical testing Statistical analysis providers like Relex & Reliasoft
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Industry Analysis
Identify key competitors
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Direct Competitors: Reliasoft
Founded in 1992 Product Base: Weibull++ Software
Family “Industry standard in statistical life data
analysis (Weibull analysis)" Services: capabilities technology
marketing consulting
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Direct Competitors: Reliasoft
Methods: Failure Mode and Effects Analysis and Fault Tree NO physical testing
COST: Weibull++ 7, a single user software package is $995.00
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Direct Competitors: RELEX
Reliability services for 20 years Product base: Relex Reliability Studio
2007 Methods: FMEA and Fault Tree Analysis
No physical testing Support Oracle/Microsoft SQL server for
scalability
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Direct Competitors: RELEX
Cost: sequentially purchase software “modules” to build and grow with a business plan
Services: 30 day eval/money-back guarantee
Customer Relationships: Broad portfolio of working relationships:
from Dell to Boeing
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Leverage and Resistance Points
What role does the product play in the customer's value chain?
What concerns (leverage points and resistance points) might they have, and how could you address them?
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Ultimate Goal
Matching of what customers want versus what vendors claim of their services
1) Customer assessment
2) Market segments
3) Customer value models
4) Flexible market offerings
5) Competitive advantage
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Discussion Question:Customers Needs vs. Vendor Claims
What CUSTOMERS WANT for their business Increase sales Improve quality/reliability of
product/process/service Maintain/build reputation Reduce time (to develop, build,
process, respond, etc.) Increase resource productivity Reduce costs (direct,
overhead, fixed) Reduce uncertainty (sales,
inputs, investments, etc.) Minimize disruption (customers,
workforce, processes) etc.
What VENDORS CLAIM for their products and
services Performance Reliability Cost of Use Ease of Use Compatibility Support etc.
Do they match???
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Pin-pointing Customer Values
Heath-care industry concerns:
• Product quality
• Reliability and uncertainty (liability)
• Time
• Resource productivity
• Overhead = fixed costs + operational cost
• Financial liabilities
• Ease of use
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VEXTEC Advantage
Embedded in automotive/aerospace = brand name? Product advantage
Reliability: reduce physical prototype testing Cost advantage: stronger reliability statistics = more cost
savings Design process:
Reduced uncertainty Warranty clarifications Recall and redesign repercussion forecasting Time = speed FDA approval = $$
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Resistance Points
Common barriers technologies in infancy: disruption of existing operations threat to owners of current solutions fear of the unknown
Discern resistance point before adoption = weapon against competitors
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VEXTEC Resistance Points
1) Resistance to change: hesitancy to radical innovation in implant sector, liability of manufacturer brand
2) Government barrier: FDA and proposed reliability methods
3) Health Care Industry Brand Names: lack of specific relevance/Brand in medical device industry
4) Transferability of field experience: proven success in automotive/automobile to prostheses manufacturers
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Value Proposition
Develop a qualitative value position Simple spreadsheet model showing how
a typical customer would benefit from the product
How value proposition will be of value to the target market
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Core Competency
Unique software reliability analysis platform unmatched in 1) its ability to accurately forecast the most
robust product design 2) project modes for improvement based
on outputs such as cost savings
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Assume an “average buyer”Re-engineer your offering for every buyerRe-engineer your offering for every buyer
Design flexibility into the offeringDesign flexibility into the offering– (80:20 rule)(80:20 rule)
Focus on one segmentFocus on one segment
– Going “vertical”Going “vertical”
Options for Coupling Your Value Proposition to the Market
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Designing Flexibility into the OfferingDesigning Flexibility into the Offering to Modulate Your Value Proposition
Your poolof core competencies
Modularity
Market Segments
Scalability
Customer Size
Evolvability
..... 2008 20072006
Life Cycle
Your “base”product
Your value proposition
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Pro-Forma for Manufacturer
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Value of Value Proposition
Increase Quality of Prosthesis Increase Warrantee Decrease Unit Production Cost Increase Price
Why does manufacturer care? Average patient changes insurance every
2-3 years because of company Therefore, focus on government
employees
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Customer Interviews
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Interview with Richard Holmes
Previous employee of Pratt & Whitney VEXTEC capabilities that helped approach
and gain trust in industry: Customer intimacy
Confidence in individual Relationship with industry Heard of VEXTEC personally
Technology advantage
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Interview with Kevin Line
Former employee of Lockheed Martin
Integrate technologies: how to model and predict failure in airplane parts ideal to continuously know the health of
airplane electronics Navy funded VEXTEC incorporated Lockheed
technology electronics into model Electronic leads in pacemakers, etc
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Orthotist (Dr. Gregory Mencio) & Prosthetist (Dr. Mark Watson)
1) What are the most widely used makes/models of above-the-knee prostheses?• Popular makes: endolite, ossur, ottobock• Models catered to individual lifestyle• Work with interface of socket• Exoskeletal: hard crustacean design• Endoskeletal: inside all laminated foam, internal pylon
2) What basic advantages do the most popular models have over others in their design and or materials used?• Steel vs. carbon fiber• Carbon fiber: lighter, enhanced performance, more
comfortable• Steel: more durable• Endoskeletal: lightweight
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Orthotist (Dr. Gregory Mencio) & Prosthetist (Dr. Mark Watson)
3) What is the most common source of failure in these prostheses? Do they differ among models?
• Breakage at knee joint: inevitable, life depends on quality and activity of patient
• Loosening at socket: atrophy causes loosening around the socket
• Selection of prosthetic:• Cost: approx $30,000-500,000• Activity: hydraulic versus geriatric patient• Vets from Iraq receive new prostheses about every 2 years• Cheaper models break down quickly, less comfortable, fewer
“bells and whistles”
4) How common are mechanical failures in these prosthesis?• Set screws often toggle and break• Failure at knee linkage
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Orthotist (Dr. Gregory Mencio) & Prosthetist (Dr. Mark Watson)
5) What kind of warranties (if any) come with above-the-knee prostheses?
• 0-3 years• Most often 6 months – 1 year• Warrantees = improves life of product
6) Do the prostheses manufacturers offer any technical support in your practice?
• New product education• Insight on amputation and fitting for prostheses
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Mark Watson: Orthotist/Prosthetist
7) How much time and money to these manufacturers spend on reliability analysis?
• Endless process for better/more durable models
8) What does their process for reliability analysis involve?• Cheap models break down insurance and prosthetists
pay• Engineers design durable models• Summary: Materials tested, materials combined, models
engineered, models tested, then human testing following FDA approval
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Uncertainty
Mark Watson ultimately unsure about reliability testing Will provide contacts at Otto Bock and
Ossur, others Team will contact manufacturers, design
engineers to determine specific processes
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Interview with Dr. Fitzsimmons
Easier to get devices approved in Europe ISO standards less than FDA Perform physical tests with predetermined forces
Warranties are mostly guesswork Feet – 36 months Knee – 24 to 36 months Medicare recommends 5 year life for prosthesis Ultimately depends on activity level (0-4) 4 level cannot expect for device to last more than a year
Most failures from feet Below-the-knee prostheses more common than above-
the-knee, thus more feet likely to fail than knee’s
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Interview with Dr. Fitzsimmons
List of manufacturers Otto Bock Ossur Endolite Ohio Willowood Medi Bulldog Tools Jim Smith Sales Euro International Fillauer
Otto Bock has 4-5 large facilities within U.S. Provided contact with Otto Bock
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Phone Call to Otto Bock
Spoke with Scott Weber, Marketing Manager for Feet Units at Otto Bock Minneapolis office
Most prostheses exempt from FDA approval, use ISO standards Microprocessor knee unit is not FDA exempt
Physical testing is expensive and time consuming, lots of money wasted on testing incorrect prototypes
Exo-skeletal knee prostheses are vanishing from market Feet units are more customized than Knee units, more failures in
them also
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Phone Call to Otto Bock (contd.)
They do use Finite Element Analysis to some extent in their reliability analysis Do not use statistical modeling, never heard of
Relex or Reliasoft Otto Bock goes above and beyond ISO standards
in their testing ISO would be a good resource for specific force
loads used on prosthesis units. Gave contact at Salt Lake City office
Sarah McCarviell, Head Engineer(?) All physical testing and design engineering done at
Salt Lake City office
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Questions?