Of respondents across the industry, 54% are "more optimistic" about revenue growth for their company over the next 12 months as compared to the previous 12 months. With the current volatile market situation, the medical devices market is expected to register different rates of growth between the developed markets in the US and Western Europe and the emerging markets of Asia-Pacific and Latin American countries. However, strong growth in emerging markets such as India, China, and Brazil, has contributed to an increase in revenue optimism.
The top three key expected changes for 2012 are the introduction of "new products and services," business "expansion in current market and abroad" and "improvement in operational efficiency." Overall, the key expected changes in business structure for medical devices manufacturers in 2012 have not changed considerably from those identified in 2011.
Mergers and acquisitions in the industry is expected to increase in 2012
Industry executives expect to see increased levels of consolidation, with 63% of respondents anticipating either a "significant increase" or an "increase" in merger and acquisition (M&A) activity over the next 12 months.
Incidentally, there has been no substantial change in expectations of consolidation among medical device companies in 2012 when compared to the 2011 survey results. Finally, high operating costs, rising competition, the need to increase geographical presence in key markets, stringent government regulations, high R&D costs, increased time to develop and introduce new technologies, business competence, and pressure on bottom-line performance are the key stimuli for switches to inorganic growth.
China, India and Brazil are the most important emerging markets
Respondents identify that China, India and Brazil will offer the highest opportunities of growth among emerging markets. The expansion of business activities in emerging markets, together with stronger economic growth than other regions of the world, government funding and reforms, changing consumer lifestyles, increasing penetration of medical insurance products, and a rise in disposable income, has increased the demand for quality healthcare services. This, in turn, is expected to increase the demand for medical equipment and other support services.
The US, Singapore, Taiwan and Hong Kong, South Korea, Germany, and Canada are identified as the most important regions for growth among developed regions.
Companies face key challenges in ‘market uncertainty’, ‘responding to pricing pressure’, and ‘regulatory change,’
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