1.
CASE STUDY
SIZING THE MARKET
OPPORTUNITYIN BRAZIL
METHODOLOGIES USED:
1. Qualitative Interviews
2. Quantitative Surveys
3. Market Sizing

2.
The following case study and data is from a
actual CLIENT project, however the data has
been de-identified to avoid sharing any sensitive
or confidential client information and is intended
for general information only.

3.
First….let’s meet the CLIENT

4.
CLIENT NEEDED TO MAKE A CORPORATE
STRATEGIC DECISION ABOUT ENTERING THE
BRAZILIAN MARKET
A large manufacturer of…..
1
2 CLIENT WAS DEBATING ACQUIRING A
LEADING BRAZILIAN MANUFACTURER TO
GAIN A FOOTHOLD IN THE MARKET OR
ENTERING THE MARKET DIRECTLY
BEDSIDE PRODUCTS AND CONSUMABLES

5.
The CLIENT wanted to know…..

6.
Research Objectives
CENTRAL RESEARCH QUESTION:
Is there a big enough and favorable market opportunity for our bedside
product and its consumables in Brazil and should we enter the market directly
with existing products or acquire a local leading competitor?

7.
Research Objectives
CENTRAL RESEARCH QUESTION:
Is there a big enough and favorable market opportunity for our bedside
product and its consumables in Brazil and should we enter the market directly
with existing products or acquire a local leading competitor?
What is the size of the market opportunity for bedside
products and consumables by hospital segment and by
hospital bed-size?
1.

8.
Research Objectives
CENTRAL RESEARCH QUESTION:
Is there a big enough and favorable market opportunity for our bedside
product and its consumables in Brazil and should we enter the market directly
with existing products or acquire a local leading competitor?
What is the market size and installed base of different
manufacturers and brands?
What is the size of the market opportunity for bedside
products and consumables by hospital segment and by
hospital bed-size?
1.
2.

9.
Research Objectives
CENTRAL RESEARCH QUESTION:
Is there a big enough and favorable market opportunity for our bedside
product and its consumables in Brazil and should we enter the market directly
with existing products or acquire a local leading competitor?
What are the customer perceptions and
strengths/weaknesses of the leading
manufacturers?
What is the market size and installed base of different
manufacturers and brands?
What is the size of the market opportunity for bedside
products and consumables by hospital segment and by
hospital bed-size?
1.
2.
3.

10.
PHASE Qualitative Analysis

11.
7 IN-DEPTH INTERVIEWS
Chief Nursing Officers
Directors of Pharmacy
Mix of Private and Public Hospitals
GOALS
Determine factors that
drive installed base of
bedside product and
utilization of consumables
Identify key purchasing
drivers
Assess awareness of
leading manufacturers
PHASE Qualitative Analysis
1
2
3

12.
BASED ON INTERVIEWS WE DETERMINED
THE FOLLOWING FACTORS WOULD NEED
TO BE USED TO “QUANTIFY” THE SIZE OF
THE PRODUCT MARKET IN BRAZIL:
• Avg. Patient Length of Stay
• # of Consumables Used Per Patient
Stay
• Hospital Bed Occupancy Rate
• # of Hospital Beds
In-Depth Interviews Key Findings 1
Determine factors that drive installed
base of bedside product and utilization
of consumables
1
GOALS

13.
IDENTIFIED big DIFFERENCE in purchasing methods BETWEEN
public and private HOSPITALS for bedside product and consumables.
In-Depth Interviews Key Findings 2
1. Public sector focused on cost and “open” bidding
2. Private sector focused on product quality and
purchasing the “right” product
Identify key purchasing drivers
GOALS
2

14.
In-Depth Interviews Key Findings 3
Assess awareness of leading
manufacturers
GOALS
3

15.
In-Depth Interviews Key Findings 3
2BRAZILIAN
MANUFACTURERS
Assess awareness of leading
manufacturers
GOALS
3

16.
In-Depth Interviews Key Findings 3
2BRAZILIAN
MANUFACTURERS
3 INTERNATIONAL
MANUFACTURERS
Assess awareness of leading
manufacturers
GOALS
3

17.
PHASE Quantitative Analysis

18.
PHASE Quantitative Analysis
115 SURVEYS
Chief Nursing Officers
Directors of Pharmacy
GOALS
Quantify installed base of
bedside products and annual
consumption of consumables
in Brazil
Forecast installed base growth
Calculate installed base
market share for the 5 leading
brands
1
2
3

19.
The survey was designed as a
bottom up analysis that segmented
survey respondents by hospital
bed-size and by public vs. private
which enabled us to extrapolate
survey results to the entire
Brazilian hospital market.

20.
Surveys Key Findings 1
92% of hospitals in Brazil
have fewer than 300 beds.
However 53% of bedside
products are installed in the
8% of all hospitals with more
than 300 beds.

21.
The TOTAL BRAZILIAN MARKET for the
bedside products and consumables was
calculated to be $276M annually driven
primarily by the utilization of consumables
and expected to GROW at a 12% CAGR
over the next 3 YEARS.
Surveys Key Findings 2
Bedside Products
Consumables
Consumables = 90%
of the entire market
90%
10%

22.
The hospital INSTALLED BASE is DOMINATED by
3 primary BRANDS including the LOCAL MANUFACTURER
being considered for acquisition by our client who
had 24% market share by installed base.
0% 5% 10% 15% 20% 25% 30% 35%
Int'l Manufacturer #1
Local Manufacturer #1
Local Manufacturer #2
Int'l Manufacturer #2
Int'l Manufacturer #3
Installed Base by Brand
Int'l Manufacturer #1
Local Manufacturer #1
Local Manufacturer #2
Int'l Manufacturer #2
Int'l Manufacturer #3
33%
24%
24%
3%
3%
Surveys Key Findings 3

23.
PHASE Qualitative Analysis
GOALS
1
30 IN-DEPTH INTERVIEWS
With Survey Respondents
Better understand survey
responses regarding:
• Product Costs
• Future Growth Drivers
• Brand Perceptions
Installed Base Drivers

24.
The primary PURCHASING decision FACTORS IDENTIFIED by
respondents for PUBLIC HOSPITALS was…
1. PRICE (bedside products & consumables)
2. ON CONSIGNMENT PURCHASING TERMS
PHASE Key Findings 1

25.
….while the PURCHASING decision FACTORS
for PRIVATE HOSPITALS were IDENTIFIED as…
1. EASE OF USE
2. PATIENT SAFETY & RELIABILITY
PHASE Key Findings 1

26.
In addition, INTERNATIONAL MANUFACTURER #1 (33% market share) and LOCAL MANUFACTURER #1 (24%
market share) are PERCEIVED as the HIGHEST QUALITY and most EXPENSIVE, while…
International Manufacturer #1
₊ Perceived as the market leader
₊ Will continue to lead in coming years
₊ Low maintenance needed
₊ High quality bedside products & consumables
₊ Most recognized brand and most expensive
₊ Strong advertising
₊ Easy to use & program
₊ Excellent service, training & support
₋ More expensive bedside products and consumables
₊ Offers the lowest price consumables
₊ Meets users needs
₊ Strong brand recognition
₋ Some perceived quality problems
₋ False security & safety problems
₋ Bedside product is very large in size (bulky)
₋ Consumables break easily
33% Installed Base
Local Manufacturer #1
24% Installed Base
PHASE Key Findings 2

27.
… the LOCAL MANUFACTURER #2, being considered for
acquisition is PERCEIVED as a LOW-COST provider with
INFERIOR PRODUCT QUALITY…
Local Manufacturer #2
₊ Strong install base
₊ Excellent brand recognition
₊ Ability to win pricing bids with
lower pricing
₊ Appear to have sufficient sales
representative coverage in the
market
24% Installed Base
₋ Their bedside product users may
be more likely to use other
branded consumables
₋ Many perceive product quality as
inferior (faulty alarms, bulky, not
easy to use)
₊ Fast growing bedside product
market provides opportunity to
greatly increase revenues
₊ Increase use of their consumable
sets with own bedside products
through consignment contract
₋ Increased price erosion from
competitors
₋ End user attrition due to
dissatisfaction of product quality
₋ Less frequent use of their
consumables
S W
O T
Their lower prices appear to be an important driver of their market share, however their biggest
risk is the potential of users using other brands of consumable sets & attrition from dis-satisfied
users.
PHASE Key Findings 2
Being Considered for Acquisition by Client

28.
PUBLIC and PRIVATE markets both offer attractive and fast growing
OPPORTUNITIES, however significant DIFFERENCES exist…
There are no significant identifiable differences in purchasing behavior within either market’s sub-segments or by geographic region.
PUBLIC
Hospital
Market
PRIVATE
Hospital
Market
A smaller market, but a market
that may be willing to pay for
higher quality products & a
potentially faster growing
market segment due to growth
in private insurance .
A significantly larger
market with more hospital
beds & capital from the
government, but more
likely with lower margins
& more competitive
pricing bids.
PRIVATE
Hospital Market
PUBLIC
Hospital Market
PHASE Key Findings 3

29.
FINDINGS and RECOMMENDATIONS

30.
FINDINGS and RECOMMENDATIONS
1
2
3
LOCAL MANUFACTURER #2 who is being considered for acquisition is 1 of 3 dominant PLAYERS
in a fast growing Brazilian MARKET, however, their LOW PRICING STRATEGY &
INFERIOR PRODUCT QUALITY could potentially prove to be a long-term WEAKNESS
The >250M bedside products market is driven by the sales
of consumable sets through bedside product consignment
contracts & expected to grow at a 12% CAGR over the
next 3 years:
• Local Manufacturer #2 needs to increase its consignment business to
compete and grow its revenue from consumable sets.
Growth opportunity for Local Manufacturer #2 being
considered for acquisition should not be limited to public
segment where it competes on price:
• Growth is fueled by the addition of new beds, new government mandates
and private insurance growth.
• Public hospitals represent 74% of the overall annual revenue opportunity,
the private market seems less price sensitive and may grow at a faster rate
than public.
Local Manufacturer #2 will need to improve its product
and service to successfully compete with International
Manufacturer #1, who is perceived as the highest quality
market leader.

31.
We recommended that the Client ACQUIRE Local
Manufacturer #2 based on its favorable
distribution reach and current market share, but
to integrate its own product portfolio under the
local manufacturer’s brand in Brazil to
strengthen the quality of products.
FINAL RECOMMENDATIONS
1
2
3
Strong brand recognition & installed base (24%)
Expected growth in the less price sensitive private
market
Perceived product quality weaknesses could be
enhanced under local manufacturer’s brand name
by integrating own products into acquisition
candidate’s portfolio

32.
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