Sulabh Singh Chauhan Synthes Assignment
Synthes Case
Out of the three main threats to the sustainability of competitive advantage i.e. imitation, substitution and hold-up the main threat to Synthes metallic internal fixation devices is substitution by bioresorbable implants. The main competitive advantages of Synthes are:
i. R&D education and link with AO’s knowledge about internal fixation devices ii. Extensive product line iii. Most experienced sales force having close working relationship with surgeons
The first two competitive advantage would be affected greatly by the threat of substitution. Although the 2nd generation bioresorbable is unstable but there is high probability that in the 3rd generation the problems will be solved and competitors like Jhonson & Jhonson, Biomet, etc. may come up with better bioresorbable material. Hence, this new technology capable of replacing metallic implants would represent technological discontinuity.
Figure 1 showing indicative technology curves for metallic and bioresorbable implants technology
The current position of Synthes on technology S-curve, shown indicatively by red point in figure 1 is heading towards the maturity. Currently the second technology (bioresorbable implants) has lower performance as compared to the incumbent technology (metallic implants), shown indicatively in figure 1 by green point. A little successful effort or investment in bioresorbable technology would cause higher returns and technological discontinuity. The new firms and doctors (installed base) will switch to the new technology and Synthes will face difficulty in extending life of its metallic implants.
Also in case the competitor who introduces better bioresorbable material patents it then it would be difficult for Synthes to enter this technology and the winner will take all. In case there is no patent issue and Synthes enter the market at later stage then the market share of Synthes would be less and it won’t be able to take the benefit of first mover advantage albeit of its
Out of the three main threats to the sustainability of competitive advantage i.e. imitation, substitution and hold-up the main threat to Synthes metallic internal fixation devices is substitution by bioresorbable implants. The main competitive advantages of Synthes are:
i. R&D education and link with AO’s knowledge about internal fixation devices ii. Extensive product line iii. Most experienced sales force having close working relationship with surgeons
The first two competitive advantage would be affected greatly by the threat of substitution. Although the 2nd generation bioresorbable is unstable but there is high probability that in the 3rd generation the problems will be solved and competitors like Jhonson & Jhonson, Biomet, etc. may come up with better bioresorbable material. Hence, this new technology capable of replacing metallic implants would represent technological discontinuity.
Figure 1 showing indicative technology curves for metallic and bioresorbable implants technology
The current position of Synthes on technology S-curve, shown indicatively by red point in figure 1 is heading towards the maturity. Currently the second technology (bioresorbable implants) has lower performance as compared to the incumbent technology (metallic implants), shown indicatively in figure 1 by green point. A little successful effort or investment in bioresorbable technology would cause higher returns and technological discontinuity. The new firms and doctors (installed base) will switch to the new technology and Synthes will face difficulty in extending life of its metallic implants.
Also in case the competitor who introduces better bioresorbable material patents it then it would be difficult for Synthes to enter this technology and the winner will take all. In case there is no patent issue and Synthes enter the market at later stage then the market share of Synthes would be less and it won’t be able to take the benefit of first mover advantage albeit of its