Opportunity for Industrial Companies through Transformation to Medical Technology
In some industrial sectors, such as automotive suppliers, we are experiencing disruptive changes in sales markets and framework conditions.
This is triggering strong transformation pressure for automotive suppliers to open up new sales markets. The medical technology market is just as demanding as the automotive industry, but has some decisive advantages:
- Unlike the automotive or aviation industries, for example, life science has come through the recent crises in a very stable manner
- Medical technology is growing at a very stable rate of just under five percent per year
- With rising energy and raw material costs, the contribution margin of automotive suppliers is quickly eaten up. The better margins for medical products provide greater leeway.
This is why sananet consulting agency sees very good opportunities for industrial companies, e.g. from the automotive industry, plastics processing, aviation industry, etc., through the transformation to medical technology.
sananet consultancy takes the automotive industry as an example here, because it is particularly groaning under the transformation to electromobility and software centricity and many automotive suppliers are on the lookout for another mainstay. The transformation in medical technology is only just picking up speed here and promises growth and reasonably stable remuneration models.
In principle, of course, what has been said here applies to all industrial sectors such as plastic injection molding, microsystems technology, metal processing, etc.
Transformation or diversification into medical technology?
sananet management consultancy makes a distinction between the transformation and diversification of an industrial company into medical technology, i.e. between a fundamental reorientation or rather a necessary change in the sense of an adaptation and expansion towards medical technology.
For example, if you are an automotive supplier currently producing components for car diesel engines, then your sales market will collapse completely in the foreseeable future. In such a case, we recommend a transformation process and the active conversion of your company to medical technology as you are forced to turn away from your old sales market in the automotive industry.
If you are operating in a more stable environment in the automotive industry or in other industrial sectors that are subject to unpleasant fluctuations or if rising energy and raw material costs are jeopardizing profits, then sananet recommends diversifying into medical products as an additional mainstay.
What needs to be considered when transforming an automotive supplier into a medical technology company?
As automotive suppliers, if their traditional sales market is likely to collapse to a large extent, then quick but above all considered and strategic action is required.
Even if they are currently still making good sales with car manufacturers, it is clear that this will probably only last for a while. The money they are now earning in the automotive sector could and should be invested in the transformation to medical technology. Once they no longer have much to do with automotive customers, they won’t have the resources to tackle medical technology as a new market.
Basically, there are two possible paths for the transformation of an automotive supplier into medical technology, which can also be approached in parallel.
Component production for medical technology
This is probably very similar to the current business model of an automotive supplier.
They manufacture individual parts and components for medical device companies, but do not act as medical device manufacturers themselves.
However, there are some important differences between the automotive industry and medical technology:
- The quantities for medical devices are usually smaller than in the automotive industry
- This is offset by better margins
- Often not only individual parts but also more complex components are required for medical devices
- They act more as development partners.
The sananet management consultancy helps automotive suppliers to find medical device manufacturers as customers directly.
This is a good, highly recommended entry, but ultimately more of a diversification into medical technology than a transformation. Whether they will be able to maintain their turnover is rather questionable.
However, the entry hurdle is very low, so you should definitely go down this route.
Transformation of an automotive supplier into a medical device manufacturer
If their sales market in the automotive sector is likely to collapse, then they should move much deeper into medical technology in the medium term. This could go as far as manufacturing their own medical products.
Here, too, they must bear in mind important differences between the automotive industry and medical technology:
- Medical products are even more heavily regulated than products in the automotive industry. However, this is usually not a real problem with the well-developed QM systems of automotive suppliers
- They are much closer to the end customer. They therefore not only need to have technical know-how
With a market analysis, sananet consultancy helps automotive suppliers to find areas in medical technology that match their core competencies and where entry is easier.
In addition, a faster transformation from an automotive supplier to a medical technology company can be achieved by acquiring or investing in a small medical device manufacturer.
Here, sananet consultancy helps industrial companies by scouting for investment candidates in medical technology.
Trade article in Plastverarbeiter: “How to make the leap into medical technology”
MedtecLIVE “Transformation: Companies opt for medical technology”
