Required Readings
Chapter 15
Lancaster, G., & Massingham, L. (2018). Essentials of marketing management (2nd ed.). Routledge
The final component of your marketing plan is a breakeven analysis report that also includes a schedule for implementation, any needed control measures, and a contingency plan.
Present your breakeven analysis in a table that includes the following details about your client:
- forecasted total number of units sold (for a service industry, products could be service contracts or the number of customers served)
- forecasted average unit price (AUP)
- forecasted total sales (in US dollars)
- forecasted average unit variable cost
- forecasted fixed cost
- breakeven point (units)
- breakeven point (in US dollars)
Read about breakeven analysis to assist your calculations.
In addition, use the following guidelines as you develop your implementation, controls, and contingency plan:
- Decide on the team that is going to implement the plan.
- Determine the time frame for implementation.
- Secure the financial and human resources needed.
- Distribute the tasks among team members.
- Periodically check and communicate performance against the marketing plan metrics (benchmarks) to ensure that implementation is on track.
- Make changes if there are any deviations from the key performance indicators (KPIs) for those metrics, preferably using a dashboard. KPIs may include the number of sales calls, the number of new customers, sales, profitability, growth, etc.
- Contingency plans should deal with severe deviations from productions plans, sales figures, market share, profitability, changes in government regulations (e.g., increased taxation), and drastic competitors’ moves (e.g., launching a competing product or service or an offering that may render your offering obsolete or less attractive to the market).
Deliverable: Early in Week 10 submit a report that explains your breakeven analysis. Also, include a table at the end of the report that highlights your financials. In addition, explain your schedule for implementation as well as the controls you intend to put in place and how you intend to proceed when your benchmarks are not met (contingency plan).
Your breakeven analysis and implementation report should be three pages, excluding cover page, the reference list, and appendices. Your report should have one-inch margins and be double spaced in 12-point Times New Roman font. The report should be organized using headings and subheadings to improve its readability.
Support your work with scholarly sources and reliable nonscholarly sources such as Reuters, Bloomberg, Yahoo! Finance, Barrons.com, Morningstar.com, Money, Forbes, Fortune, Financial Times, Wall Street Journal, and Harvard Business Review, as well as the UMGC Library databases such as Hoover's and ABI/INFORM. All sources need to be cited using APA formatting, both within the text and in the reference list.
2
Final Marketing Plan
University of Maryland Global Campus
MBA 640: Innovation Through Marketing and Technology
Dr. Gyongyi Konyu-Fogel
Date
Table of Contents
1. Executive Summary
2. Situation Analysis
2.1 Mission
2.2 Product or service description
2.3 Value proposition
2.4 Internal environment scan (SWOT analysis)
2.5 External environment scan (PESTEL & Porter's five forces analyses)
2.6 Critical issues
3. Market Analysis
3.1 Marketing research
3.2 Market size and growth
3.3 Market trends
3.4 Customer analysis (including needs analysis)
4. Strategic Analysis
4.1 Marketing objectives (including financial objectives)
4.2 Market segments
4.3 Target market
4.4 Positioning strategy
4.5 Product and branding strategy
4.6 Pricing strategy
4.7 Distribution and supply chain strategy
4.8 Integrated marketing communications strategy
5. Financial Analysis
5.1 Breakeven analysis
5.2 Sales forecast
5.3 Expense forecast
6. Implementation, Controls, And Contingency Plan
6.1 Implementation
6.2 Controls
6.3 Contingency plans
Appendices
References
Executive Summary
Situation Analysis
Siemens Healthineers is a medical technology firm which manufactures and sells diagnostic and therapeutic machinery primarily to clinics, laboratories, universities, and other business organizations. The company also provides assistive services to its clientele, including consulting, design, maintenance, and educational services. Siemens Healthineers has contracted this team to develop a marketing plan to help the company increase its sales to other businesses in the United States, in service of its primary goal of increasing revenue.
2.1 Mission
Per its website, the mission of Siemens Healthineers is to “pioneer breakthroughs in healthcare. For everyone. Everywhere. Sustainably.” Company materials expand on that concept, explaining that approximately three billion people, nearly half the Earth’s population, lack access to modern healthcare, and therefore many are suffering from curable illnesses; Siemens Healthineers’ vision is to rectify that, ensuring that every human being has access to high-quality, curated healthcare. The company’s strategy for addressing this problem consists of developing a broad-scale system of solutions to each of the factors which individually limit healthcare access, including technological, infrastructure, geographical, and workforce-related factors, in addition to the rising challenges in access caused by extreme weather events related to climate change. In service of these goals, the company works to develop an internal culture of inclusivity, openness and transparency, and respect toward environmental sustainability; it also values being at the leading edge of product innovation.
2.2 Product or Service Description
Siemens Healthineers designs, manufactures, and distributes innovative technologies in the areas of medical imaging, laboratory diagnostics, and point-of-care testing (Products & Services). Its medical imaging products aid healthcare providers in early detections, increasing the chances of complete recovery, potentially enabling prevention, and reducing healthcare costs at both the system and patient levels.
The company also provides services associated with the products it sells, including training, machine maintenance, and optimization consulting. Services offered by the company are divided into three categories: service plans, which are offered as an optional add-on to medical equipment purchases, and include educational services, IT support, and performance plans; connect platforms and smart enablers, which allow customers to connect to digital platforms maintained by Siemens Healthineers, known as Connect Platforms, in order to access service experts, equipment information, and supportive education with technologies that expedite service delivery to the most efficient degree possible; and “up” services, which are designed to sustain the quality and usefulness of the machinery, and provide remote technical assistance from live equipment and technical application experts.
2.3 Value Proposition
The company's 2023 annual report describes its value as follows: “With holistic system competence, we develop, manufacture, and sell a diverse range of innovative diagnostic and therapeutic products and services… this comprehensive portfolio supports customers along the entire care continuum, from prevention and early detection through to diagnosis, treatment, and follow-up care.” (Annual Report 2023). The company provides value to its customers by constantly innovating, introducing advanced medical technologies which predict and solve the problems faced by its clients and their patients; it distinguishes itself from competitors by offering its expertise in the form of services connected to the entire patient life cycle, from prevention and detection onward. Customers have constant access to the company and its specially crafted set of services from the time they purchase a set of equipment, providing convenience, comfort, and improved patient outcomes. The company also offers tailored solutions individualized to customer needs based on the market in which the customer is located.
Internal Conditions
Siemens is headquartered in Erlangen, Bayern, Germany, and has operations across the Americas, Europe, Australia, the Middle East, and parts of Africa. The company sells medical diagnostic and therapeutic technologies, which primarily include “medical imaging, ultrasound, point-of-care testing, healthcare IT, clinical specialties and consulting, and laboratory diagnostics systems and devices”; the company also provides “consulting, design, maintenance, operational management, training, and education services" to its business clients (Siemens Healthineers Course Resource). The company’s operations comprise four distinct segments: imaging, diagnostics, Varian (a subunit of the company focused exclusively on oncological servicing), and advanced technologies (Annual Report 2023).
In 2023, the company’s overall revenue was 21,680 million USD, and its revenue from operations which took place in the Americas was 8,863 million USD (Annual Report 2023). Total current assets at the end of the 2023 fiscal year were listed at 1,115 million USD. At the time of publication of the 2023 Annual Report, the company employed just over 71,000 employees, as compared to the previous year’s 69,500, and held just over 75% of its own shares, the same percentage as in both of the previous two years.
Production and product development primarily take place in the United States, Germany, China, India, Great Britain, and Slovakia, and the company maintains sales operations in upwards of 70 countries, with corporate purchasers in over 180 countries. The company’s manufacturing and operations facilities are comprised of both company-owned sites, such as its new MRI-processing facility in Oxford, England, as well as those in Germany and India (Taylor, 2024), and leased sites, several of which the company operates in Delaware, USA (Medical Technology Leader, 2021). The company sources its raw materials from global supplying partners, and its procurement process heavily prioritizes sustainability, the circular economy, and respect to diversity and human rights (Sustainability); highlighted suppliers include ATTL Advanced Materials Co. Ltd. (headquartered in Beijing, China), the Sanmina Corporation (California, USA), Thermo Fisher Scientific, Inc. (Massachusetts, USA), and Wurth Industrie Service GmbH & Co. KG (Baden-Württemberg, Germany).
According to the company’s 2023 Sustainability Report, two thirds of its 71,000 staff were located in Germany, China, India, Japan, the US, or the UK, with the remainder based across Eastern Europe, Africa, and Oceania (its Managing Board members primarily based in Germany and the United Kingdom, with one member based in the United States). The company maintains a number of what it refers to as “value partnerships” globally with its distribution and other partners, which it describes as strategic relationships which allow the company and its partners to address industry-wide obstacles, including workforce shortages, cost containment, access to care, and technology optimization. (Value Partnerships). The company is partnered with a number of National Health Service facilities in the United Kingdom, including the Southampton NHS Trust, the Bolton NHS Foundation Trust, and Airedale Hospital NHS Trust, among several others (Customer References); it is partnered with the William Osler Health System in Canada, and the Rush University Medical Center in Chicago, and has partnerships with clients of similar caliber in Spain, the Netherlands, Germany, and other countries.
Market Conditions
The company’s primary competitors include the Atrion Corporation, Boston Scientific Corporation, GE Healthcare Technologies, Inc., and Hologic, Inc. Per the 2023 annual report, healthcare trends globally remain relatively unchanged by the global COVID-19 pandemic, inflation, and ongoing geopolitical events. The market has been influenced by a number of other factors, including the aging population of many nations, which has caused significant strain to many local healthcare systems; the increasing costs associated with providing healthcare to an aging population has limited the economic ability of many locations to invest in new medical technologies. However, the trend may also be conducive to the company’s purposes by increasing demand for cost-efficient health services. In tangent is the growing trend of noncommunicable diseases associated with both aging and lifestyle factors; this trend has resulted in a higher number of patients experiencing comorbidities, which is driving up demand for predictive medical technologies. The healthcare market is also impacted by economic growth in developing nations, which drives market growth and increases the availability of healthcare services for many. New policies regarding healthcare service provision, specifically, regulations aimed at increasing the quality of healthcare and decreasing costs at the point of service, have resulted in the implementation of new pilot services. Finally, the market has in recent years been influenced by political and macroeconomic factors, such as required localization and increasing protectionism and other barriers to cross-border trade.
2.4 Internal Environment Scan (SWOT Analysis)
Strengths
Global Presence
Siemens Healthineers has a strong global presence and network of sales in worldwide markets. Their markets are found in America, Europe, Africa, the Middle East, Asia, and Australia. Siemens Healthineers’ broad presence in geographically diverse markets helps to mitigate the risk of relying on one geographic region for growth. The company’s sales representatives are located in upwards of 70 countries, and it has near-global sales reach, with buyers in more than 170 countries, as noted in the 2023 annual report. Significant presence in geographically diverse markets enables the company to offset the risk of depending on a single geographic region for growth (Siemens Healthineers A.G., 2024).
R&D
Siemens Healthineers prioritize research and development (R&D) to lead in technological advancements. Its R&D focuses on innovative digitalization and artificial intelligence (AI) solutions (Siemens Healthineers A.G., 2024). The company aims to enhance its current products and services in a way that transfers to digital platforms to enhance and support customers in their transition to digital healthcare uses. In 2023 the company had 24,00 intellectual property portfolios and 15,00 patents and is dedicated to growth. 8.6% of its revenue was used for R&D, which highlights how much the company values the development of new products and services.
Increase in Cash Reserves
The company has shown significant growth in the cash reserves sector of their business. From FY2022 there was a .9% increase in the company’s cash component. Additionally, there was a 5.7% increase in short term investments and cash reported from FY 2022 to FY 2023, the company accredits this growth from operating activities. The German medical technology company's comparable revenue growth was at 4.7% for the year ended Sept. 30, slightly missing analysts' forecast of 4.8%, according to a Vara Research-compiled consensus (MarketScreener, 2024).
Existing Customer Relationships
As referenced above, the company maintains a series of “value partnerships”, existing relationships with major spenders and influencers in the industry, which can be wielded both for the purposes of achieving the company’s stated goals regarding creating a more equitable, accessible global healthcare infrastructure, and in service of the company’s more internal goals of increasing market share, overall revenue, and funding available to be paid to shareholders in the form of dividends. These partnerships are developed in support of addressing and resolving concerns related to staffing and workforce development, operations management, access to healthcare, and technological innovation. For example, Siemens Healthineers currently has an active partnership with the University of Missouri, under which a program has been developed to address the “growing shortage of qualified service engineers” by co-developing one of the first online certification programs for clinical engineering (Value Partnerships). These partnerships bring value to the company by stabilizing variable market forces, like the supply of trained labor, and by ensuring positive relationships with sizable corporate buyers, encouraging high customer retention rates, customer loyalty, and further collaboration efforts in the future.
Existing Supplier Relationships
The company not only has relationships with suppliers of critical raw materials from across the globe, but it also maintains partnerships with some of the most awarded suppliers on the market in key areas of sustainability (Suppliers). Because of the scale of the company’s purchasing volume, these suppliers are likely to prioritize the business of Siemens Healthineers. This fact is crucial in ensuring an uninterrupted supply, particularly during major global events such as the COVID-19 pandemic, which slowed production globally. Favorable relationship conditions like this allow the company to provide unparalleled service to its customers, further solidifying the company’s relationships with its consumers, which leads to increased revenue and a more stable position within the market.
Weaknesses
Despite its strengths, Siemens Healthineers faces challenges inherent to operating in a highly regulated industry. The stringent approval processes, such as those required by the FDA in the United States, can delay product launches and increase development costs. Another notable weakness is the company’s vulnerability to market perception. Any negative perception regarding the quality or efficacy of its products could harm its brand reputation and sales, especially at a time when the healthcare industry as a whole is looked upon with deep skepticism. Furthermore, maintaining its global operations and investing heavily in R&D comes with significant financial and operational costs. These high expenditures could strain resources, particularly in periods of market uncertainty or economic downturns.
Opportunities
Artificial Intelligence Technologies
The healthcare industry’s growing demand for digital and AI-driven solutions presents Siemens Healthineers with significant opportunities for expansion. The company is well-positioned to capitalize on these trends by enhancing its digital platforms and AI capabilities, which align with the shift towards precision medicine and digital healthcare.
Ingrained Sustainability Practices
Siemens Healthineers have an existing, demonstrated commitment to manufacturing and operating in a way that has as light an environmental impact as possible. The company partners with raw materials suppliers, who themselves demonstrate a commitment to sustainability, and release a yearly sustainability report detailing the ways in which it has incorporated ideals of sustainability into its yearly operations. The global focus on sustainability provides an opportunity for Siemens Healthineers to reinforce their commitment to environmentally friendly practices, improving its appeal to socially conscious stakeholders.
Emerging Markets
Emerging markets in developing regions of the world, where healthcare infrastructure is rapidly growing, also offer untapped revenue potential. Collaborations and partnerships with healthcare institutions and research organizations can further enhance the company’s ability to innovate and expand its market reach.
Shifting Global Demographics
As indicated in the company’s 2023 annual report, the aging population of several nations provides both opportunities and challenges. With an aging population comes an increase in age-related health concerns in a population, and an increase in demand for technologies and service providers capable of addressing those concerns. This serves as an opportunity for the company to increase its level of service provision and overall sales in the many nations presently undergoing this demographic shift.
Similarly, many nations are experiencing economic growth, resulting in more leisurely lifestyles for citizens of these countries. Increased wealth is often associated with an uptick in noncommunicable diseases resulting from behavioral factors. A higher number of people experiencing these illnesses will result in increased demand for healthcare services and equipment, which the company can provide, and, if necessary, develop.
Threats
Siemens Healthineers operates in a highly competitive market, facing pressure from major players such as GE Healthcare and Boston Scientific. This intense competition necessitates continuous innovation and can create pricing pressures that impact profitability. The growing integration of connected technologies into healthcare systems exposes the company to cybersecurity risks, which could result in data breaches or disruptions to critical services. Economic volatility, including fluctuations in foreign currency exchange rates and the impact of inflation, poses additional challenges, particularly for a company with substantial international operations. Lastly, clinical trial challenges remain a persistent threat, as delays or failures in trials can impact product development timelines and erode investor confidence.
2.5 External Environment Scan (Pestel & Porter's Five Forces Analyses)
PESTEL Analysis
Political Factors
Political factors impact the introduction or expansion of a new product in the US market. Regulations from agencies like the FDA make the approval process time-consuming. Trade and taxation policies directly affect product profitability. Companies in the Medical Equipment and Supplies industry, such as Siemens, are impacted by international trade policies and tariffs, influencing costs and revenues. Political changes can affect public policies and regulations, potentially impacting the company's renewable energy sector. In addition, corporate tax rates and policies for research and development significantly influence investment decisions and profitability. Finally, major sociopolitical events like the war in the Ukraine can impact the company’s ability to manufacture and transport its goods across borders. The company currently has no manufacturing facilities in Ukraine, but upheaval in neighboring nations such as Slovakia, where the company does have significant operations, has the capacity to significantly disrupt the company’s operation capacity.
Economic Factors
Economic factors, including the general economic climate, fiscal and monetary policies, economic trends, growth, and government funding, can significantly impact businesses. Moreover, currency exchange rate fluctuations can substantially affect the company's revenues and profitability, given its extensive international operations. It is also important to note the impact of inflation in the United States, as a moderate level of inflation is considered beneficial for a growing economy. The central bank aims to maintain an annual inflation rate of 2% ( Inflation (PCE) n.d.).
Social Factors
Regarding social factors, consumer preferences and tastes significantly drive the demand for imported products. These social factors impact consumers' attitudes, interests, and opinions, influencing sales and revenues. Adapting to changes in the social environment of the United States and offering products that resonate with US consumer behavior is essential for businesses. Social trends and movements can also impact imports. For instance, increasing ethical and environmental concerns may lead to a greater demand for sustainable technology products, necessitating their importation from other countries. Social media is another noteworthy factor currently influencing US businesses due to its growing importance and role in rapidly disseminating trends.
Technological Factors
Technological advancements, such as innovation, communication, and engineering excellence, influence the healthcare industry. Siemens Healthineers invest in research and development and collaborate with start-ups and research institutions to drive innovation. The company has also established a Corporate Technology department, and an independent unit called Next 47 to expedite the time-to-market for new products and innovations (Hans-Joachim Fiedler, 2018). Additionally, technological advancements in the US have strengthened intellectual property protections, creating opportunities for companies to import products protected by intellectual property rights. Leveraging these technologies can give companies a competitive advantage and help them expand their presence in the US market.
Environmental Factors
Factors like geographical location, weather, and global climate change impact the environment. As the world focuses more on global warming and climate change, there is a growing need for sustainable and energy-efficient solutions. Siemens is well-placed to benefit from this trend because it focuses on renewable energy technologies and energy-efficient infrastructure. The company is committed to developing sustainable products and ensuring the sustainability of its entire supply chain (Admin, 2024). Additionally, while environmental regulations are intended to protect human health and the environment, they often lead to higher production costs for companies. Despite the costs, these regulations offer improved air and water quality, disease prevention, and reduced gas emissions.
Legal Factors
A wide range of laws and regulations heavily influence the business environment, with corporate policies playing a pivotal role in shaping company operations. In the United States, individual state and local governments have distinct laws impacting businesses. Treaties and international agreements are formal accords between countries governed by international law (Treaties and International Agreements, n.d.). In the healthcare industry, strict adherence to government regulations is crucial. For instance, Siemens Healthineers prioritizes adherence to laws, maintains liability insurance, and safeguards innovations through patents, trademarks, and copyrights for sustained success (Admin, 2024.).
FIVE FORCES Analysis
The Threat of New Market Entrants
The US MedTech industry offers substantial opportunities, yet it is accompanied by significant barriers, leading to a moderate to high threat of new entrants. As a result, new companies need to assess their financial needs accurately. Companies aiming to enter the American market must invest substantially in advertising, research and development, clinical trials, and regulatory approvals. The US healthcare system is complex, and strategies that were successful in other countries may not work in the US. Thus, being adaptable and responsive to changes is essential. Also, establishing trustworthy partnerships with hospitals, patients, and healthcare organizations is vital for new businesses to succeed in the MedTech industry.
The Bargaining Power of Suppliers
The bargaining power of suppliers for the US MedTech market is moderate. Suppliers in the healthcare industry include a variety of individuals and companies, such as physicians, healthcare systems, medical supplies, pharmaceutical companies, and billing and insurance entities. According to (Cimasi, 2014), new technologies, care standards, and regulatory initiatives can influence suppliers' competitive advantage. The emergence of new technologies can impact suppliers' bargaining power by altering care standards and efficiency. Furthermore, with fewer providers than customers, suppliers have greater leverage during contract negotiations.
The Bargaining Power of Buyers
Buyers in the healthcare industry, including physicians, hospitals, nursing homes, and households, have relatively low to moderate bargaining power. Several factors influence this classification. First, there has been an increasing consolidation of buying power in the industry, which has resulted in a reduced ability for individual buyers to negotiate favorable terms. Changes in medical reimbursement policies have also contributed to the subdued bargaining power of buyers. These changes have altered the dynamics of pricing and procurement within the industry, further limiting the influence of buyers (Maresova & Kuca, 2014).
Threat of Substitution
The threat of substitutes in the US medical technology industry is relatively low due to the distinctiveness and specialization of its products. However, in some market segments, more alternatives may be available, which could impact pricing and competitiveness. Substitute products face similar barriers to entry as medical devices, such as long lead times to market and significant capital requirements. Although these barriers do not prevent the development of substitute products, they slow down new substitutes' emergence. Despite the presence of products designed to replace others, the overall demand for medical devices remains strong and continues to grow (Maresova & Kuca, 2014).
Rivalry Among Competitors
The intensity of the US medical technology market is significantly high due to various factors contributing to the competitive landscape. Navigating these factors is pivotal for companies to gain a competitive edge. For instance, continuous investment in research and development is essential to keep up with technological advancements. Adherence to healthcare regulations and intellectual property rights is vital for maintaining a strong competitive position. Moreover, establishing strong relationships with business partners and clients early on is crucial for building a solid foundation with critical stakeholders. Anticipated price increases can be managed by offering affordable solutions and fair reimbursement procedures. Additionally, market share significantly influences a company's negotiating power and ability to invest in research and development. A solid organizational structure, reliable processes, foresight, and a skilled team are all imperative for standing out among competitors.
2.6 Critical Issues
In 2024, medical device manufacturers continue to face persistent and evolving challenges. The MedTech industry has faced material shortages, product delays, and disruptions in the supply chain (Doyle, 2024). As a result of material shortages and tight capacity, contract manufacturers tend to prioritize orders from larger customers, potentially leading to backorder issues. Additionally, rising interest rates, economic uncertainty, and global competition impact MedTech spending. Cybersecurity remains a significant