As illustrated in a previous post, wound management products are a spectrum from the simple to the complex:
Source: MedMarket Diligence Report #S254.
Generally, the longer the product has been around (e.g., gauze), the less complex it is compared to emerging technologies…
…BUT simpler is easy to adopt and, with well established sales, growth on a percentage basis will be low (see area in red)..’
Generally, new technologies incorporate rarer materials, have more complex construction, and may cost considerably more…
…BUT complex technologies may be far more effective clinically than older technologies and may allow treatment where no older technology could, and with low initial sales (penetrated potential), growth on a percentage bases will be high (see area in green).
Country and Regional Variation in Growth Rates
While this size-to-growth dynamic exists for most product types, the dynamic varies from one geographic region to the next. The time point at which a particular product/technology starts to be more rapidly adopted — or the rate at which use of established products are use starts to decline — can vary considerably from country to country.
As a result, there will be variability in sales growth rates for a product in one country/region versus another.
For example, the 2017 to 2026 compound annual growth rate in sales of Alginates in wound management range from a low of 5.3% in one country to a high of 24.3% in another country. (If you make alginates, in which country would YOU like to compete?)
Regionally, as in USA versus Europe versus Asia/Pacific, etc., there is less variation in growth rates for any given product in that region. For alginates:
- country-to-country variation in CAGR: 19%
- region-to-region variation in CAGR: 7.8%
In other words, the difference between the countries with the highest and lowest CAGRs for alginate sales is 19%, while the difference between regions shows one region with a 7.8% higher CAGR for alginates than the lowest growth region.
Source: MedMarket Diligence, LLC; Report #S254.
Before chasing after that high growth rate, it is important to know the underlying volume. (Sales of $1 in year 1 and $2 in year 2 is a 100% growth rate, but it’s absolute growth of only $1.)