The Pacemaker

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Andy Kach
Principal
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Brian Chapman
Principal
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Home vs. Away: Lessons on Customizing Your Go-to-Market Game Plan

Posted by Lukas Grabner on March 9, 2018



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During my time with ZS, I’ve had the opportunity to live and work both in Europe and the U.S. Once I returned to Europe last year after spending two years in our San Francisco office, I reflected a bit on the differences between the two markets and the typical challenges that our clients encounter when entering them.

In our work, we’ve seen some common success factors and challenges associated with accessing the U.S. or European market. Any new entrant has to familiarize itself with the local market and the legal/regulatory environment, and very often tackle barriers associated with competing against established players with a home-field advantage.

However, companies looking to gain market entry into the U.S. face a different overarching challenge than those looking to enter Europe:

  • Companies trying to enter the U.S. need to find ways to build up scale in order to quickly establish a presence in such a big, uniform market.
  • On the other hand, success in Europe depends much more on the ability to adapt to the idiosyncrasies of many independent countries and on finding ways to succeed with a more customized route to market.

Success in the U.S. requires a significant mindset shift for organizations that historically have built their business by accessing markets in Europe via a country-by-country approach. For example, many European pacemaker companies have had difficulty when trying to establish themselves in the U.S. They’ve struggled with the right level of investment to build critical mass for their commercial organization and often made suboptimal channel choices as a result (such as a reliance on under-resourced distribution channels to cover for a lack of direct investment). They often didn’t provide the same service and support level to customers to create an attractive alternative to incumbents, and they came to realize that pricing alone isn’t sufficient to establish a strong foothold and advocacy among clinicians.

Moreover, some of them came to realize that their more conservative European compensation philosophies weren’t attracting top talent or retaining high performers in the sales organization. As a result, after various unsuccessful attempts, the companies continue to lack the market share and presence that they enjoyed in their European home markets, and some decided to give up the U.S. market altogether.

Success in Europe, on the other hand, is less dependent on a big, resource-heavy initial move but involves considerable deviations from a successful U.S. model. And it requires significantly more deliberation about local preferences and individual market differences, and how to address them.

One medical equipment company tried to buy its way into the European market a few years ago by acquiring a local competitor as a means for building up European presence and distribution. While this can be a viable strategy if executed well, this organization made the mistake of abandoning any established legacy and best practices very quickly. The company started by closing local manufacturing facilities and switching product lines to introduce the U.S. portfolio at the cost of established products. The organization also ran into early challenges with local trade unions by trying to force change too quickly, which eventually resulted in a confrontational relationship and difficult negotiations when it came to aligning on important organizational changes for the future go-to-market model. As a result, it garnered negative press, which substantially damaged the organization’s brand because it was seen as a hostile invader in the local markets.

To make matters worse, the organization lacked insights on the key metrics that local buyers across different European markets used to make purchasing decisions, and how those metrics differed from those in the U.S. market. Also, the company didn’t invest in understanding the local procurement procedures, and it eventually was excluded from some of the largest southern European tenders as a result. In essence, the company’s initial years in the European market were tough and relatively unsuccessful, and it required significant effort and resources over time to reset the organization on a more promising growth path.

Both situations (access to the U.S. and Europe) provide unique challenges, and we’ve seen companies effectively address them in the past when they avoid a “what works well at home” mindset and instead invest in building up local expertise quickly. The effort required can’t be understated, but the investment will pay off in the mid- to long term and help medtech companies build a truly global presence.


RELATED CONTENT

ARTICLE: Conquering the West: How European Medtech Firms Can Penetrate the US

ARTICLE: Making Cents of Europe's Fragmented Medtech Market


 

Topics: go-to-market strategy, globalization, medical devices, MedTech Europe, Europe, global strategy, medtech manufacturers, medtech commercial model, local markets

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AUTHORS
Brian_Chapman_thumbnail
Brian Chapman
Principal,
ZS Associates
Tobi_Laczkowski_thumbnail
Tobi Laczkowski
Principal,
ZS Associates
Will_Randall_thumbnail
Will Randall
Manager,
ZS Associates
Matt-Scheitlin-London_thumbnail
Matt Scheitlin
Associate Principal,
ZS Associates
Andy-kach_thumbnail
Andy Kach
Associate Principal,
ZS Associates
Bhargav_Mantha_thumbnail
Bhargav Mantha
Associate Principal,
ZS Associates
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