Title: VEXTEC Technology Marketing Plan
1VEXTECTechnology Marketing Plan
- Aashish Bapat, April Boldt, Jason Deaner,
Grainger Greene, Dani Shuck
2Technology 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
3Capabilities 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
4Technology 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?
5Technology Marketing Intelligence
- Future Contacts
- Ossur
- Endolite
- Ottobock
- Medi
- Fillauer
- Freedom Innovations
- Ohio Willow Wood
- Smith-Global
- Bulldog Tools
- DAW
6Future 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
7Market Segmentation
- 3-Screen Technology Market Scan
- Figure 2 Importance-Advantage Map
8Three-Screen Technology-Market Scan
- Need Screen
- Economics Screen
- Time Screen
9Needs 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?
10Economic Screen
- Performance/Value Advantage
- Price
- Ease of Use
- Reliability
11Time Screen
- Readiness to solve problem
- Cognizance (shopping) vs. precognizance
- Receptiveness to new technology
- e.g, early vs. late adopters
12Time Screen (ctd)
- Compatibility with customer operations
- Word processors vs. nuclear reactors
- Dependence on other technologies
- Market Concentration/Heterogeneity
- Customer Buying Practices
- Competitive Intensity
13Importance-Advantage Map
Advantage
Importance
14The Winner
Important to Market/ Competitive Technology
Advantage
Importance
15Strategy for the Winner
GO
Advantage
Importance
16Technology Ahead of its Time
Unimportant to Market/ Competitive Technology
Advantage
Importance
17Strategy for Technology Ahead of its Time
Develop Market
Advantage
Importance
Redeploy Assets
18(No Transcript)
19Industry Analysis
- Michael Porters industry forces model
20 Five Competitive Forces that Determine Industry
Profitability
Threat of new entrants
Potential Entrants
Industry Competitors
Suppliers
Buyers
Rivalry among existing firms
Bargaining power
Bargaining power
Threat of substitute products or services
Substitutes
21Analyzing Porters Forces(Strengths are on a 1-3
scale, with 3 the strongest)
- Industry Competition / Rivalry (Rating 2)
- Cutting edge technology, unique approach
- No direct competitors
- In house reliability testing methods
- Potential Entrants (Rating 3)
- Proprietary rights
- High RD costs and time
- Supplier (Rating 2)
- Device Testing Databases
22Porter forces (contd) (Strengths are on a 1-3
scale, with 3 the strongest)
- Buyer (Rating 1.5)
- Lack of confidence/ Inexperience in medical
device industry - Substitutes (Rating 1)
- More expensive, theoretically weaker but age-old
proven industry norm physical testing - Statistical analysis providers like Relex
Reliasoft
23Industry Analysis
24Direct Competitors Reliasoft
- Founded in 1992
- Product Base Weibull Software Family
- Industry standard in statistical life data
analysis (Weibull analysis)" - Services capabilities technology marketing
consulting
25Direct 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
26Direct 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
27Direct 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
28Leverage 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?
29Ultimate Goal
- Matching of what customers want versus what
vendors claim of their services - Customer assessment
- Market segments
- Customer value models
- Flexible market offerings
- Competitive advantage
30Discussion QuestionCustomers Needs vs. Vendor
Claims
- What CUSTOMERS WANT for their business
- Increase sales
- Improve quality/reliability of product/process/ser
vice - 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???
31Pin-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
32VEXTEC 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
33Resistance 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
34VEXTEC Resistance Points
- Resistance to change hesitancy to radical
innovation in implant sector, liability of
manufacturer brand - Government barrier FDA and proposed reliability
methods - Health Care Industry Brand Names lack of
specific relevance/Brand in medical device
industry - Transferability of field experience proven
success in automotive/automobile to prostheses
manufacturers
35Value 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
36Core 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
37Options for Coupling Your Value Proposition to
the Market
- Re-engineer your offering for every buyer
- Focus on one segment
- Going vertical
- Design flexibility into the offering
- (8020 rule)
38Designing Flexibility into the Offering to
Modulate Your Value Proposition
39Pro-Forma for Manufacturer
40Value 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
41Customer Interviews
42Interview 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
43Interview 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
44Orthotist (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
45Orthotist (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
46Orthotist (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
47Mark 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
48Uncertainty
- 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
49Interview 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 knees
50Interview 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
51Phone 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
52Phone 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
53Questions?