Marketing plan for launching abbott CMR in vietnam master project in business and marketing management

Figures and Tables Page Figure 2.1: Performance graph of Abbott Laboratories in 2004-2009 Figure 2.2: Sales growth of ADD Vietnam in 2005-2009 Figure 3.1: Relative Risk of Cardiovascular

TutorỖs Name: PGS.TS Nguyễn đình Thọ

Ho Chi Minh City (2010)

Commitment

This is the first marketing plan I have created based on the knowledge I gained from interesting marketing subjects in the Master Business & Marketing Management 2009-

2010 course of Solvay Brussels School and HCM city Open University

I commit that the project is completed with my high honesty I fully take responsibility for

any mistakes or incorrect information given in this project

useful information to set up the marketing plan

I also want to say thank you very much to all professors for useful marketing knowledge in

the Master Business & Marketing Management 2009-2010 course

Finally, I would like to send special thanks to my darling husband who has heartily

supported me to complete this project successfully

Tutor’s comments

CONTENT

Page

1 Executive Summary 8

2 General Introduction 10 2.1 Vision and Objectives of the project 10

2.2 Company 1611

2.3 Product 1016

3 Situation analysis 18 3.1 External analysis 18

3.1.1 The Vietnamese IVD market overview 18

3.1.2 Environment (SLEPT) analysis 19

3.1.3 Competition analysis 26

3.1.4 Target market analysis 27

3.2 Internal analysis 829

3.2.1 Profitability 29

3.2.2 Product analysis 30

3.2.3 SWOT analysis 32

3.2.4 Key success factors of Abbott CMR 32

4 Marketing strategy 33

4.1 Targeting 33

4.1.1 Segmenting criteria 33

4.1.2 Choosing the target 34

4.1.3 Target customers 35

4.2 Re-Positioning strategy in VN market 37

4.3 Objectives of the marketing plan 41

5 Marketing planning 43

5.1 Marketing program 43

5.1.1 Product 43

5.1.2 Price 46

5.1.3 Communication (Branding) 46

5.1.4 Distribution 48

5.1.5 Convincing target customers 49

5.1.6 Customer relationship management 50

5.2 Budgeting 50

5.3 Implementation and control 51

6 Biliography 57

7 Appendixes 58

7.1 Market research design 58

7.2 Results 61

7.3 Orginal questionaires 66

Abbreviations

ADD Abbott Diagnostics Division

CMR Cardiac/Cardiovascular, Metabolic, Renal

IVD In vitro diagnostic

KOL Key opinion leader

SWOT Strength, Weaknesses, Opportunities, Threats

SLEPT Social, Legal, Economic, Political, Technical

Figures and Tables

Page Figure 2.1: Performance graph of Abbott Laboratories in 2004-2009

Figure 2.2: Sales growth of ADD Vietnam in 2005-2009

Figure 3.1: Relative Risk of Cardiovascular Disease Associated with

Metabolic Syndrome Figure 3.2: Diabetes prevalence map

Figure 3.3: Vietnam real GDP growth rate and Inflation rate in 2007-2023

Figure 3.4: National Medical budget in 2000-2008

Figure 3.5: International aid in 2000-2008

Figure 3.5: BMI short-term political stability rating – Asia Pacific 2010

Figure 3.6: Clinical CMR review of a complex patient

Figure 4.1: Volume percentage of main segments in the Vietnamese IVD

market in 2008 Figure 4.2: The segmentation criteria based on potential customer’s characteristics

Figure 4.3: Value curve of Abbott CMR vs competitor (Roche)

Figure 4.3: Re-positioning strategy

Figure 4.4: Objectives of the marketing plan

Figure 5.1: Abbott CMR’s major characteristics

Table 3.1: The qualitative research’s data interpretation

Table 5.1: Budget for the communication campaign

Table 5.2: The implementation plan of Abbott CMR

1 Exe utive Summary

- Company: introduce Abbott Corporation’s history, reputation, branding values and business figures

- Product: introduce Abbott CMR characteristics and its global business strategy

- Internal: it gives some details about the company Profitability, Brand awareness

& identity and Product Then the SWOT analysis and Key success factors of Abbott CMR gives very important strategic information as a background for the marketing plan described in the following part

This part also provides the smart objectives of the marketing plan which are required to achieve in the first 3years

4 Marketing planning

This is the key part of the project It provides all information about the marketing plan which is created based on the situation analysis and the marketing strategy The plan includes 3 steps: Marketing program, Budgeting, Implementation and Control, in which marketing program will cover 6 parts: Product, Price, Communication, Distribution, Convincing target customers and Customer relationship management

2 Gene al Introduction

2.1 Vision and Objectives of the project

Abbott Diagnostics is a division of Abbott Laboratories, an American broad-based healthcare company having 120+ year history and approximately 83,000 employees around the world, with products that span the continuum of care—from prevention and diagnosis to treatment and cure, and leadership in technologies and businesses across the spectrum of health care Abbott Diagnostics is a global leader in in vitro diagnostics (IVD) and offers a broad range of innovative instrument systems and tests The signature “A Promise for Life” is a commitment that the company wants

to bring to customers who care about their health and life At Abbott, leading science and innovation are the key words to develop new products

Not like the pharmaceutical or nutrition division, the business of Abbott Diagnostics division is B2B with target customers are hospitals, reference labs, blood banks, physician offices and clinics Moreover, as a kind of healthcare products, the IVD product is regulated by the Ministry of Health in most of countries in the world Therefore, the marketing of this product is limited to scientific activities like symposia, seminars, sponsoring for scientific studies… The new scientific application and innovative technology is the most important core differentiation of an IVD product An IVD product can be “alive” in the market until a new scientific application/ technology is discovered to improve health care, and it can be several years to several decades

And Abbott CMR is a typical example for that, it is developed by Abbott Diagnostics to bring a new value to the diagnosis of CMR diseases for complex patients It is one of key products of Abbott global marketing strategy to strengthen Abbott’s top position in global IVD immunochemistry market in the coming time

By launching Abbott CMR, Abbott Laboratories has ambitions to be recognized as

a leader connecting cardio-metabolic and renal care from prevention and diagnosis

to treatment and monitoring In this project, I will introduce you a marketing plan

to launch Abbott CMR in Vietnam in 2011 The marketing plan for Abbott Diagnostics’ new IVD products is usually set up for 3-5 years which will cover whole growth stage of the product life cycle before declining in the market (there

will be a substitution then) Moreover, the first year – the launching year always plays a decisive role to the success of the marketing plan

Abbott Diagnostics is a global leader in in vitro diagnostics (IVD) and offers a broad range of innovative instrument systems and tests for hospitals, reference labs, blood banks, physician offices and clinics With more than 69,000 institutional customers in more than 100 countries, Abbott's diagnostic products offer customers automation, convenience, cost effectiveness and flexibility Abbott has helped transform the practice of medical diagnosis from an art to a science, helping to create the modern diagnostics industry through the company's commitment to improving patient care and lowering overall costs

The resident representative office in Vietnam of Abbott Laboratories was established

in 1995 Operating for more than 15 years, Abbott Diagnostics Division (ADD) has still maintained the leading position in The Vietnamese IVD market, especially in immunological segment and kept growing strongly The Representative Offices in Hanoi and Ho Chi Minh City cover the IVD market throughout the country from North to South

Company reputation & values

Company branding

Abbott Diagnostics brand is one of 19 business lines of Abbott Corporation and it follows the Abbott Corporation Branding system Abbott Corporation Branding identity has a unique “A” logo with the signature "A Promise for Life"

• Brand promise: "A Promise for Life - Turning Science into Caring "

Caring is central to the work we do and defines our responsibility to those we serve:

- We advance leading-edge science and technologies that hold the potential for significant improvements to health and to the practice of health care

- We value our diversity – that of our products, technologies, markets and people – and believe that diverse perspectives combined with shared goals inspire new ideas and better ways of addressing changing health needs

- We focus on exceptional performance – a hallmark of Abbott people worldwide – demanding of ourselves and each other because our work impacts people’s lives

- We strive to earn the trust of those we serve by committing to the highest standards of quality, excellence in personal relationships, and behavior characterized by honesty, fairness and integrity

- We sustain success – for our business and the people we serve – by staying true to key tenets upon which our company was founded over a century ago: innovative care and a desire to make a meaningful difference in all that we

do

The promise of our company is in the promise that our work holds for health and life

• Brand values:

“Pioneering” - Leading-edge science and commercialization

“Achieving” - Customer-focused outcomes and world-class execution

“Caring” - Making a difference in people’s lives

“Enduring” - Commitment and purpose

Business Week Named one of the “Best Places to Launch a Career.”

DiversityInc Named one of the “Top 10 Companies for Diversity.”

Forbes Ranked 118th on the Forbes Global 2000 list (ranked by

2008 sales, profits, assets and market value)

Fortune Ranked 1st among the “Most Admired Companies” in the

pharmaceutical sector

Ranked 80th on the Fortune 500 list of the largest based corporations (ranked by 2008 revenue)

U.S.-The Scientist Named one of the “Best Places to Work in Industry.”

Working Named one of the “Top 10 Best Employers Mother for

as their dedicated laboratory partner who offers innovative science, diagnostic solutions and services For laboratory professionals and clinicians, they will see that ADD provides the tools necessary for them to excel as scientists in their field Our offerings ultimately help our customers provide better patient management

Business figures

Product portfolio

Our broad range of diagnostic instruments and tests are used

worldwide in hospitals, reference labs, small size laboratories

and clinics to aid in the diagnosis of a range of serious health

issues such as infectious diseases, cancer, and diabetes, as well

as monitor other important indicators of health

Source: Abbott Laboratories – www.abbott.com

Automation: ACCELERATOR Automatic Processing System (APS)

Software: Instrument Manager, Informatics Services

Transfusion: ABBOTT PRISM, Commander, Quantum II

Hematology: CELL-DYN Family instruments have provided efficient, flexible and dependable hematology products and solutions to laboratorians world wide for over

25 years

Immunochemistry: The ARCHITECT family of analyzers magnifies the impact of sophisticated technologies by delivering the first truly integrated portfolio of immunoassay and chemistry instruments Featuring unique technologies like the Robotic Sample Handler, FlexRate and CHEMIFLEX, ARCHITECT systems make it easier to get to the science that really matters Ask your Abbott representative about our growing portfolio

Abbott Diagnostics offers comprehensive assay menus:

Cancer Cardiac Drugs of Abuse/Toxicology Fertility/Pregnancy

General Chemistry Infectious Disease Congenitals Hepatitis

Retrovirus Metabolic Renal Special Chemistry Specific Proteins Therapeutic Drug Monitoring Thyroid

Transplant

Sales figures

Performance Graph

The following graph compares the change in Abbott’s cumulative total shareholder return on its common shares with the Standard & Poor’s 500 Index and the Standard & Poor’s 500 Health Care Index

Source: Abbott Financial Report 2009 – www.abbott.com

Figure 2.1: Performance graph of Abbott Laboratories in 2004-2009

Assuming $100 invested on 12/31/04 with dividends reinvested

Abbott’s revenues are derived primarily from the sale of a broad line of health care products under short-term receivable arrangements Sales in international markets are approximately 50 percent of consolidated net sales

ADD Vietnam sales figures

Being a leader in Vietnam IVD immunological market for over 10 years, since the market was immature, ADD Vietnam has been being kept growing strongly along with the market growth During the past 5 years, ADD Vietnam’s sales growth has been achieved double digits of percentage per year

Source: ADD Vietnam Sales Report 2005-2009

Figure 2.2: Sales growth of ADD Vietnam in 2005-2009

0 2 4 6 8 10 12 14

Each assay will be offered to the customers as a whole reagent set, including Reagent kit, Calibrator and Control The Reagent kit

will have 2-3 packaging sizes based on the demand

of target customers: 100 tests/kit, 500 tests/kit and

2000 tests/kit

Source: Abbott Laboratories – www.abbott.com

Sales ($M in USD)

Year

A complete menu of Quality Biomarkers of Abbott CMR:

These assays are offered to run on Innovative and Quality Abbott integrated systems

Source: Abbott Laboratories – www.abbott.com

IA CC Integration High

3 Situation analysis

3.1 External analysis

3.1.1 The Vietnamese IVD market overview

Market size & growth

In 2010, the Vietnamese market for medical equipment and supplies is estimated at US$515 million, or US$6 per capita It is expected that the device market will continue to expand strongly at 15.3% per annum This will take the Vietnamese market to over US$1 billion in 2015, although the per capita rate will remain low

An estimated 86.5% of the medical device market is supplied by imports, and the sector is growing rapidly Singapore, China and Japan are the leading suppliers, accounting for 43.1% of imports in 2008
The Vietnamese IVD market is small

in Asia, but fast-growing with double digit growth (Source: Espicom Business Intelligence (www.espicom.com) - The Medical Device Market: Vietnam - July 30th 2010)

According to statistics data provided by the department of Diagnosis and Treatment Administration - Vietnam Ministry of Health, in 2009 we have totally 1063 governmental hospitals, 94 private hospitals, and all hospitals have set up the medical testing laboratories; and thousands of medical testing clinics & centers in Vietnam’s diagnosis and treatment system The number of Immunochemistry tests

in 2007 were 80,391,595 of total 195,881,878 in-vitro tests and in 2008 were 100,160,568 of total 234,958,644 in-vitro tests According to the data, 2008/2007 Immunochemistry tests’ growth is 124.6% (Source: The Department of Diagnosis and Treatment Administration – www.kcb.vn)

Market trend

Improving healthcare system is the government focus in the coming years, so there would be a lot of demand for equipments used in medical imaging, intensive care, patient-monitoring, operating theaters, cardiac treatment, laboratory and diagnostics and consumables Improved living standards and income will lead to improved healthcare expenditure, especially increasing the number of Vietnamese people taking regular health-checking courses.

(Source: Vietnam Business news - www.vietnambusiness.asia)

3.1.2 Environment (SLEPT) analysis

(Source: www.asiabiotech.com - Vietnam Healthcare - The Next Growth Frontier?by V.K Sanjeed - Volume 13 > Number 10 > 2009)

 Demand for testing and treating CMR diseases

While global aging represents medical, social and economic triumph over disease,

it also contributes to the increasing prevalence of complex patients with obesity, metabolic syndrome, type 2 diabetes and renal insufficiency

Figure 3.1:

Relative Risk of Cardiovascular Disease Associated with Metabolic Syndrome

Findings from a Meta-analysis by Galassi et.al, Am J med 2006; 119: 812-9

In Vietnam, Economic development and globalization has caused significant changes in lifestyle that have raised the number of complex cardiac disease cases in the country According to research from the Center for Disease Control and Prevention (CDC), around 31% of non-accidental deaths are cardiovascular-related, while an estimated 16.3% of the northern population have been diagnosed with heart disease

Moreover, Vietnam is the sixth ranking of Prevalence of diabetes in the WHO Western Pacific Region with estimated number of 2,343,000 patients in 2030 Vietnam is also one of top countries in the world having high percentage of Prevalence of diabetes (3-4%), especially in Hochiminh city the percentage can be 11% with the age of patients is younger and younger.

(Source: http://www.who.int/countries/vnm/en)

Figure 3.2: Diabetes prevalence map

Worldmapper_map239, 2006 - SASI Group (University of Sheffield) and

Mark Newman (University of Michigan)

Legal environment

The governmental management units of the Ministry of Health are currently including the department of Diagnosis and Treatment Administration, Medical Preventive department, the department of Medical Environment Administration, the department of Food Safety and Hygiene, HIV/AIDS preventive department These departments manage the medical testing laboratories based on professional vertical axis, there has not been any department of the Ministry of Health to be in

charge of the management of medical testing laboratories as well as no quality control center, reference laboratories, legal system and documents, standardized testing procedures…

The improvement of medical testing services as well as other healthcare services have not been got the equal & proper care Moreover, there has not been any integration between medical testing professional majors about management and differentiation in their services at different levels

(Source: National Action Plan to improve managerial competence for medical testing laboratories from now until 2020 – Chapter 3)

1060 USD in 2010 (Source: Business Monitor International Ltd (www.businessmonitor.com) – Vietnam Vietnam Business Forecast Report Q3-2010 - Chapter 2: Economic Outlook)

In the coming years, Vietnam can keep this GDP growth rate The Economist estimates that GDP growth rate will stably increase until 2023 as shown in the figure below:

Figure 3.3: Vietnam real GDP growth rate and Inflation rate in 2007-2023

 Personal income

The savings ratio has remained relatively constant in recent years It amounted to 5.8% of disposable income in 2009 Disposable income per capita has increased by more than one third in real terms since 2004 as the economy has grown In 2009, it was VND13,364,055 (US$783) Income varies widely across different regions of the country Per capita consumer expenditure has risen in line with disposable income The indicator was estimated to be VND12,772,047 (US$748) in 2009

(Source: Euromonitor International (www.euromonitor.com ) – Vietnam Country profile – August 2010)

 Healthcare expenditure & investment

According to WHO Statistics Full report on Health Expenditure in 2007, Vietnam has a high Total expenditure on health as a percentage of gross domestic product of 7.1% (58 USD per capita) in the world; in which the General government expenditure on health as a percentage of total expenditure on health is 39.3% This low rate means that total expenditure on health is largely based on private source (60.7%) (Source: http://vietnambusiness.asia/attracting-investment-in-the-healthcare-sector/)

Vietnam has received a large amount of international aid in the form of loans and donated medical equipment A number of small projects are currently taking place

in Vietnam, including those funded by the World Bank and the EU

The government has pledged 45.2 trillion (US$2.5 billion) to build or upgrade specialty hospitals and some provincial-level general hospitals in mountainous and other disadvantaged areas in the 2009-2013 period

The private healthcare sector in Vietnam has expanded since the lifting of the ban

on private practice in 1989 People often choose to use private facilities, if they can afford to do so, as the quality of state healthcare provision is very poor According

to latest data, an estimated 67.6% of healthcare expenditure is private

Therefore, they said Vietnam’s healthcare sector has great potential to develop

(Source: Espicom Business Intelligence (www.espicom.com) - The Medical Device Market: Vietnam

- July 30th 2010)

Figure 3.4: National Medical budget in 2000-2008

Figure 3.5: International aid in 2000-2008

(Source: The Department of Health of HCM city www.medinet.hochiminhcity.gov.vn)

Political environment

The one-party system is generally conducive to short-term political stability (BMI rating of 78.1 reflects), kept in place largely by the ruling Communist Party of Vietnam’s monopoly on power

Figure 3.5: BMI short-term political stability rating – Asia Pacific 2010

(Source: Business Monitor International Ltd (www.businessmonitor.com) – Vietnam Vietnam

Business Forecast Report Q3-2010 - Chapter 1: Political Outlook)

Corruption among government officials poses a major threat to the legitimacy of the ruling Communist Party There is increasing (albeit still limited) public dissatisfaction with the leadership’s tight control over political dissent

Vietnam has allowed legislators to become more vocal in criticizing government policies

The ministry of Health of Vietnam issued the Directive No 06/2007/CT-BYT on

7th December 2007 about “Improve the quality of diagnosis and treatment for Vietnamese people” The content of this Directive includes “Reduce the overload

of hospitals; Improve competence for local medical system; Force socialization of the diagnosis and treatment; Strengthen medical ethics at medical facilities; Change and modify some legal documents related to diagnosis and treatment activities” Recently, the ministry of Health of Vietnam issued the Decision No 3701/QD-BYT on 5th October 2010 about “Approval of National Action Plan to improve managerial competence for medical testing laboratories from now until 2020”

It shows that the improvement of medical systems is the government focus in the coming time and the managerial competence for medical testing laboratories is also

an important part of this plan

Technical environment

 Current status of medical testing laboratories in Vietnam

In Vietnam, medical testing laboratories at district level often meet the demand on routine diagnostic assays; medical testing laboratories at province level can carry out most of specific diagnostic assays; medical testing laboratories at national level can carry out all routine & specific diagnostic assays but overloaded

Almost medical testing laboratories are poor quality of management of testing quality and lack of resources to meet the demands on the required quality of a diagnostic testing laboratory

Currently, the issues on management of laboratories operation and testing quality are the Ministry of Health’s concern and it is put on the first priority to improve The Ministry of Health has been building the National Action Plan to improve managerial competence for medical testing laboratories by Establishing governmental management units of management of laboratories operation, quality control center, reference laboratories, legal system and documents, technical specifications and national standards, standardized testing procedures

(Source: National Action Plan to improve managerial competence for medical testing laboratories from now until 2020 – Chapter 3)

As a result of this National program, the equipment status at medical testing laboratories in medium and big hospitals has been being improved, especially with the increased installation of automatic testing systems and the high installation rate

of Abbott automatic in vitro immunochemistry systems which are considered as the top quality brandname in the market

At the same time, with the global non-stop scientific development in in vitro diagnostics, the assay menu range has been broadened with new and unique markers to support new diagnosis & clinical treatment algorithm

More and more international in vitro diagnostic companies entering the market like Abbott has provided the professional training and services along with their modern instruments to laboratory technicians that can meet the requirements on quality testing of the National program

3.1.3 Competition analysis

IVD market in Vietnam includes 3 main segments which are based on type of specialized diagnostic service: Immunology, Clinical chemistry and Hematology There are several key players in this market like Abbott Diagnostics, Roche Diagnostics, Olympus, Sysmex…as follows:

1 Abbott Diagnostics is the leader in the IVD Immunological segment, especially dominating in the South

2 Roche Diagnostics and Olympus is still dominating in the North

3 Sysmex and Coulter is sharing hematology business with Abbott in North

4 Sysmex, ABx and Mindray are penetrating market with positioning their brand

at lowest price

With launching Abbott CMR, we focus on the IVD Immunological segment in which Roche Diagnostics is our main competitor

Roche Diagnostics profile

Roche Diagnostics, a division of F Hoffmann-La Roche Ltd, is the world’s leading provider of diagnostic systems and decision-oriented health information Roche Diagnostics supplies a wide array of innovative testing products and services to researchers, physicians, patients, hospitals and laboratories worldwide Roche Diagnostics country organizations have established in 14 Asia Pacific countries, with the regional headquarter located in Singapore Present in Vietnam since 1994 as Representative offices of former Boehringer Mannheim and AVL, Roche Diagnostics is well known to the local end users as one of the leading suppliers for diagnostic products Its representative offices in Hanoi and Ho Chi Minh City cover the diagnostics market throughout the country from North to South The local presence indicates its commitment to provide professional technical and training supports to end users

Roche’s huge penetration with heavy investment to differentiate in cardiac, fertility and endocrine These are the main product portfolio of Roche Diagnostics in Vietnam:

Cobas® 4000 analyser series

The cobas® 4000 analyser series include the cobas c 311 module for clinical chemistry and the cobas e 411 module for immunoassays The combination of the two analysers with cobas IT 3000 solution provides true operational integration for small laboratories

E 170 module for MODULAR ANALYTICS EVO analyser

The E 170 module is an integral component of the MODULAR ANALYTICS EVO platform and offers a tailor-made Heterogeneous Immunochemistry solution for medium to very high workload volume laboratories

(Source: http://sg.roche-diagnostics.com/RocheDiagnostics_vietnam.htm)

3.1.4 Target market analysis

Target market of Abbott CMR product is the IVD immunological segment It is a B2B business with the customers are hospitals, laboratories and clinics

Besides the secondary data from Abbott Diagnostics and other official sources, it

is necessary to conduct a primary market research to collect more data about the customer insights for the marketing plan shown in Chapter 5

A qualitative research was done to explore the current diagnosis and treatment process and the future trend of CMR fields in Vietnam (see Chapter 7 – Appendixes) The interpretation of collected research data about the target market is shown in the table 3.1

Table 3.1: The qualitative research’s data interpretation

Percentage of

complex

patients

- Complex patients are increasing rapidly, especially obesity or diabetes There

is high relation between Cardiac, Metabolic and Renal diseases in the disease progress

- The surgery requires high accuracy so pre- and post-testing plays essential role for a surgery as they impact on the patients’ safety and health

Issues of the

current

- Physicians of Cardiac, Metabolic, Renal department already knew the relation

of these diseases However, they just advise their patients to get further visits to

procedure other departments if possible but not assigning further tests They don’t want to

take more responsibilities and to avoid conflicts with their colleagues The patients have to visits many departments for their treatment

- Low healthcare expenses supported from the government and limited budget

of patients, the diagnostic testing tends to cost saving

- The quality of sub-clinical testing in VN is much lower than in developed countries in the world Therefore, skills and knowledge of physicians are good but there is still high risk of errors

- With more investment from the government, VN hospitals will have opportunities and enough budgets to use the most standardized and best quality tests for patients

- The diagnosis and treatment procedure of Cardiac, Metabolic and Renal diseases for complex patients will be improved to save time and total cost Benefits of

- It is a very good way to save time and total cost

- Early or timely detection can help to reduce cost for treatment, especially serious diseases

- In vitro testing is less expensive than other diagnostic tools If there will be a comprehensive assay menu for diagnosis of Cardiac, Metabolic and Renal, it will save total costs for complex patients

- It will reduce the time for pre- and post- surgery diagnostic testing and avoid extra costs for other testing

Conclusions:

The number of complex patients in Vietnam is increasing rapidly The global trend

in lifestyles and environment change has impacted Vietnamese people Obesity and diabetes are very popular diseases to lead the patient to other Cardiac, Metabolic and Renal diseases in the disease progress

The current diagnosis and treatment procedure for complex patients in Vietnam has many issues and is not updated to global trend There is high demand of a time and cost saving tool for diagnosis of complex patients

3.2 Internal analysis

3.2.1 Profitability

Market share and revenue

In the Immunological segment of the IVD market, Abbott Diagnostics has gained a market share of around 50% in 2009 ($9M of total market $18M)

The Immunological segment is the most important business of Abbott Diagnostics

in the global IVD market as well as in Vietnam, the company has kept the position

as a leader with very strong competitive advantages

In fact, the revenue of this segment brings to 75% ($9M) of total Abbott Diagnostics revenue in 2009 ($12M) And the Immunological business has kept the growth of 20-30% in 2007-2009: 2008 = 29% ($8M); 2009 = 22% ($9.4M)

According to ADD’s 2009 annual Immunological sales report, though C-M-R total revenue is still small, only $0,5M of $9M (~5,5%) but C-M-R assay group has gained the highest growth in 2009 vs 2008 (35-65%) in comparison with the other groups (<30%) in the Immunoassay menu of ADD Vietnam’s Immunological business and it is estimated to keep strong growth in future due to the increase of complex patients (Source: ADD Vietnam Sales Report 2009)

Brand awareness & identity

Awareness: 100% current hospitals and clinics know ADD brand name

Coverage: ADD product brands, especially Immunological instruments and assays have a large coverage in Vietnam’s IVD market Nearly 70 government/private hospitals and clinics in all cities like Hanoi, Hochiminh, Danang, Hue, Nhatrang, Cantho, Haiphong and other big provinces like Binhduong, Dongnai, Soctrang, Binhdinh, Phanthiet…have used/ have been using at least one of ADD product brands

Image: With the strong growth in The Vietnamese IVD market for more than 15 years, as a leader especially in immunological segment, ADD has built its brand image as “ADD brings to the customer the best quality and innovative products with very good after-sales service” Though ADD has a higher price than its competitors, the customers choose ADD product brands based on its guarantee on quality, innovation and customer support service Using ADD product brands, they feel secure that they can serve the diagnosis and treatment mission with the most

accurate testing results and they can meet the new demands on the diagnosis and treatment therapy with the leading-science innovative ADD products

3.2.2 Product analysis

The importance of CMR assays: The increasing prevalence of obesity, cardiovascular

diseases, diabetes, metabolic syndrome and chronic kidney diseases, collectively contributes to an increased prevalence of complex patients Complex patients are difficult to diagnose with traditional tools alone In this new era of affordable health care, less expensive tools are actively being sought as a way to improve patient care Cardiac, metabolic and renal biomarkers play a critical role in diagnosis, prognosis and treatment management of complex patients Novel biomarkers are expected to further elucidate underlying pathologies and allow for earlier detection of disease onset using multi-marker panels of blood and urine, directly improving clinical care

Figure 3.6: Clinical CMR review of a complex patient

Source: Abbott Laboratories – www.abbott.com HF: Heart failure

MI: Myocardial infarction

CVD: Cardiovascular disease

IR: Insulin resistance CKD: Chronic kidney disease AKI: Acute kidney injury

Metabolic Syndrome, Diabetes, Critical

Illness, IR, Obesity HEART

KIDNEY

Glomerular damage CKD

CVD Atheroma

Age Gender

Diet

Life

style

innovative and quality products

including novel markers on flexible

and scalable instrument solutions

OPPORTUNITIES

- CMR assays have a potential very high growth in the Immunological segment (begins “growth” stage in product life cycle)

WEAKNESSES

- Lack of personnel for business

extension

- High margin for distributors due to

cold warehousing costs and

complicated import procedure at

customs

- High price

THREATS

- Strong competitor (Roche)

- Poor infrastructure of healthcare industry in Vietnam (personnel, knowledge level, equipment investment)

3.2.4 Key success factors of Abbott CMR

- Deep understanding in Vietnam

market thanks to long office

establishment time (>15 years) and

experienced & well-trained personnel

- Build successfully brand image and

innovative and quality products

including novel markers on flexible

and scalable instrument solutions

- Potential high growth of IVD market

in Vietnam

- Government focus with increasing investment in healthcare industry

- Premium choice for customers based

on ADD’s guarantee on quality, innovation and customer support service

- High customer loyalty (contract is valid is 5-10 years)

- Clinical chemistry: biochemical tests that measure the presence or concentration

of a substance in body fluids (serum, plasma, urine…) using chemical methods

- Hematology: blood tests to analyze human blood cells including red-blood cells, white-blood cells, platelets (blood-count)

Products in these segments are provided with 3 types: Medical devices, reagents and service; they are not sold separately but they will be included as one package for the customer

E.g When the customer buy an immunological instrument (medical device), they will buy the reagents of immunological assays to run on this instrument and they need to pay service fee for maintenance and trouble-shooting

Figure 4.1: Volume percentage of main segments in the Vietnamese IVD market

in 2008

Immunology Clinical chemistry Hematology Others

The segment is classified based on type of specialized diagnostic service The percentage of each segment is estimated based on the number of tests done in 2008

(Source: The Department of Diagnosis and Treatment Administration – www.kcb.vn)