When we finally emerge from the chaos of Covid-19, how will medtech’s competitor landscape shake out? Bain research shows that some companies are more likely to outperform their peers during and after the crisis. These winning firms are category leaders. Companies with a high Category Leadership Index® score seek to excel in the targeted segments in which they play as opposed to applying a broader brushstroke. They strategically concentrate on markets deﬁned through the eyes of the customer, including patients, surgeons, and payers. By developing products for a defined set of end users, category leaders avoid complex, wide-ranging portfolios that undermine focus.
After the 2008 global financial crisis, from 2010 to 2015, category leaders grew at a 5% compound annual growth rate (CAGR) compared with zero growth among other medtech players. What’s more, from 2007 through the decade following the downturn, leaders grew at an average 8% CAGR while the others stalled at 4%. As medtech executives face the persisting economic shocks of Covid-19, the advantages of pursuing category leadership will raise important questions on how to manage their product portfolios and make M&A decisions.
Category Leadership Index® is a registered trademark of Bain & Company, Inc.
A targeted, category-based strategy correlates directly with profitability and winning in a downturn.