Wound Market Analysis, A Case Study in Understanding the Context for Opportunity

See pending report #S251, “Worldwide Wound Management, Forecast to 2024”, Report #S251.

Analysis is a funny thing. If done thoroughly, accurately and carefully to represent a subject from all relevant angles, it can reveal very important considerations by those with a vested interest (e.g., in support of expensive investment).

Analysis is often driven by assumption. (“It seems to me that the relative significances of different wound management products vary from one country to another, or one region to another.”) So, analysts go looking for data that would support or reject that assumption. Here, one would be interested in the relative values of different wound product sales in different countries.

Ah, we have that data. Let’s plot the sales, as a percent of each region’s total, for the different categories of wound management products in the Americas, European Union, Asia/Pacific and Rest of World:

Screen Shot 2014-03-26 at 1.57.46 PM

 Source: MedMarket Diligence, LLC; Report #S249.

What striking results, the analyst says. Clearly, negative pressure wound therapy is much more common in the Americas than it is in the Rest of World. Other small-to-significant differences are seen in other product areas.

However, the better analyst would challenge the assumption or at least consider its relevance to important decisions (again, e.g., expensive investment).

This relative data was presented because it answered an assumption, that relative use of different wound management products varies by country/region. Of course, this is indeed true.

But that’s not the whole story.  Here, we have engaged ourselves in a careful analysis of deck chairs on top of a magnificent, unsinkable luxury liner.

The bigger picture, the more relevant context into which this analysis must fit is not simply the relative difference, but the absolute difference. If we take this question of wound product sales by geography and consider not the relative but the absolute differences, the picture changes considerably:

Screen Shot 2014-03-26 at 1.59.06 PM

Source: MedMarket Diligence, LLC; Report #S249.

Which analysis is correct?  Of, course, they both tell the truth, but neither tells the whole truth. One can gain a more comprehensive understanding by considering both and recognizing the significance of actions based on one or the other analysis.

But size and growth are not the only dimensions that factor into the potential interest by manufacturers. There is, of course, the degree to which the market is fragmented — how many competitors are carving up that high volume or high growth niche?  Here are some of the (3^3=9) combinations (of which many are possible):

  • High volume, low growth, fragmented: traditional wound dressings
  • High growth, low volume, unfragmented: growth factors
  • High growth, low volume, fragmented: bioengineered skin and skin substitutes
  • High growth, high volume, unfragmented:  ???

The opportunities available to manufacturers of wound management products clearly derive from each manufacturer’s strengths (technology, market presence, time-to-market, etc.), but the value of those opportunities and whether they should be pursued are factors that are dictated entirely by how each of those strengths match up against others in the market.  The wound management market has a highly diverse makeup of technology types, competitor types, clinical applications, clinical challenges, market forces and, ultimately, different competitive niches for product suppliers.

1 thought on “Wound Market Analysis, A Case Study in Understanding the Context for Opportunity”

  1. It is worth noting how easily very hard data can accurately represent a half-truth, such as the statement that, “recent data indicates that 50% of the U.S. population has below average IQ.”