Growth Environment: Internal Challenges & Opportunities 

• A Visionary Understanding of the Industry:  The CEO and the CEO’s Growth Team™ must work together to identify, analyze, and synthesize industry issues that, taken together, provide a holistic and far-reaching understanding of the industry. Few executive teams have developed this visionary perspective.
• Accurate Benchmarking with Best-In-Class Companies:  Benchmarking with the fastest-growing companies inside and outside the industry will unearth many insights that can be directly applied to your organization’s strategies, opportunities, and challenges.  Many management teams suffer from not-invented-here-syndrome or corporate arrogance, which prevents this kind of open-mindedness. 
• Generation of Ideas and Opportunities:  The majority of companies do not leverage all 10 of the growth processes that increase successful growth, and lack the CEO’s 360 Degree PerspectiveTM needed to generate their pipeline of growth opportunities.  To optimize the flow and quality of growth ideas, management must leverage a number of disciplined processes to optimize the potential of the growth pipeline. 
• The CEO's Growth Team™:  Developing a visionary understanding of the industry, benchmarking the growth processes and implementing a growth strategy, is far too overwhelming for the CEO alone to handle.  It requires the help of an integrated Growth Team.  Our experience reveals that for most companies, the CEO and the core departments supporting the CEO operate relatively independent of each other -- teamwork and collaboration have not been cultivated to drive successful growth. 
• Opportunity Evaluation System:  A disciplined system for evaluating ideas, prioritizing winners, and eliminating losers is critical to success.  Typical opportunity evaluation systems (provided they exist at all) are often clouded by politics, emotions, and guesswork.  Significant growth acceleration can easily be achieved just by eliminating the losers from the growth pipeline and focusing on those with the highest probability of success – which can only be accomplished through an unbiased, principled evaluation system. 
• Consistent Growth Strategy Implementation:  Many great growth strategies fall apart in the implementation phase.  Implementation depends upon best-practice performance across all the key organizational functions within the company.
• A Culture of Growth, Innovation and Leadership (GIL):  As mentioned previously, best-in-class growth companies actively cultivate and celebrate a culture of growth, innovation, and leadership.  This culture can be either a result or symptom of having an effective Growth Acceleration System in place.
• Vision Alignment among the CEO, Management Team, and Staff: CEOs report that their companies are well aligned on vision and strategy, while staff typically cannot articulate the vision and do not understand their role in the strategy.  This lack of alignment seriously undercuts any organizational attempt to accelerate growth.

• Increasing Competitive Intensity:CEOs consistently rate the competitive environment as their number one challenge. Key issues highlighted include: competitive strategy, pricing, M&A, outsourcing and strategic partnering, margin pressure, and market share and growth.
• Increasing Customer Volatility:The following key customer issues must be constantly measured: customer demand trends, perceptions, loyalty, satisfaction, service, new applications, unmet needs, competitors’ customers, and purchasing processes.
• Industry Convergence and Integration:Few companies know how to consistently predict areas of industry convergence and anticipate the consequences of those convergences. Mega Trends research is mostly considered a "nice to have." This singular focus on their own industry renders them blind to any number of emerging growth opportunities.
• Impact of Globalization:Business is accelerating the trend toward globalization. The world may be flatter and smaller, but it is also faster and more fluid. As a result, it is increasingly difficult to monitor the Mega Trends that impact global markets, government involvement, society, labor flows, capital, and intellectual property.
• Emerging/Disruptive Technologies and Increasing Product Innovation Demand:To thrive in today’s economy a company must monitor not only emerging and disruptive technologies, but also licensing, application, and strategic partnering trends. Additionally, your company’s competitiveness depends on its ability to develop 10-year-out scenarios to predict which innovative products will be in line with the customer’s rapidly changing needs.
• Economic Uncertainty, Capital Raising and Regulatory/Government Hurdles:Most companies become passive victims of the economy rather than victors; global Mega Trends in currency, trade, inflation, deflation, spending, regulation, politics, and economic output can be leveraged to a company’s advantage if management knows what to do and how to do it.
• Best Practice Perspective: For each functional role in your company, productivity improvements can be stimulated by better leadership, strategies, innovation and/or technology. Functional best practices must be monitored and adapted as relevant for all key careers.

Pharmaceuticals/Biotechnology:

• Globalization Raises IP Concerns. Copycat drugs and reverse-engineered medical products create cautionary barriers to global market entry. Products developed in-country often have more patent protection and drive local manufacturing and development strategies.
• Shifting Global Clinical Trial Dynamics. Trials are increasingly becoming outsourced outside of the U.S. to emerging markets such as India, China, and Latin America in an effort to take advantage of issues such as cost savings and the treatment of naïve patients.
• Shift in Growth from Mature Markets to Emerging Markets. Emerging economies could generate up to a fifth of global pharmaceutical sales by 2020. Changing growth dynamics from the West to emerging economies shift developer interest in patient groups, including new growth opportunities for chronic disease indications. Improved regulatory and IP protection promotes innovation, competition, and increased access to safe medications. In addition, it encourages multinational drug companies to expand their global footprint.
• Tighter Regulatory Approval Environment. Following high-profile product withdrawals in recent years, regulatory bodies such as the FDA and EMEA have become more rigorous in their approval procedures. This has resulted in longer times required for product approval, thereby delaying product launches in some cases. Pharmaceutical companies need to be able to ensure better rates of approval, right from the discovery stage, to enjoy market success.
• Consolidation of Major Players. The current economic situation is triggering consolidation through mergers and acquisitions across the entire industry. Recent examples include Pfizer’s acquisition of Wyeth, Merck’s acquisition of Schering-Plough, and Roche’s acquisition of Genentech. This consolidation is expected to result in the formation of a more complete infrastructure.
• Emergence of Distinct Specialty Pharmaceutical Business Models. Companies in the healthcare sector are shifting focus from a fragmented approach that focuses on multiple diseases toward specialized business models, such as niche therapeutic areas and generics. By focusing on specific areas, companies are able to develop expertise, which promotes brand recognition and saves money by allowing the company to consolidate sales teams and R&D.
• Convergence of Healthcare Allows for Personalization. The goal of many healthcare companies is to offer or contribute to a personalized healthcare solution by producing diagnostics, instrumentation, and drugs. This results in a large integrated knowledge base that more easily allows for the development of targeted medicines, novel drug delivery mechanisms, patient-specific drugs, and virtual patient monitoring tools.

In-Vitro Diagnostics:

• Diagnostic companies must be cognizant of global cultural disparities in physician awareness of diagnostic tests. Knowing how a product fits into an existing provider workflow and understanding different cultural settings will prove important for overseas adoption.
• There is a shortage of clinical laboratory workers that perform critical functions in healthcare delivery through the collection and analysis of bodily fluids and tissues. The shortage is expected to worsen in the next decade as older workers retire and new positions are not filled due to an insufficient number of new graduates. Without the highly skilled technical personnel capable of operating sophisticated technology and complex instrumentation, the industry is restricted from realizing the potential revenues associated with new tests.
• Advancements in technology are simplifying esoteric testing for widespread adoption. As more manufacturers look to expand their reach to more hospitals, esoteric testing as we know it today will likely be considered routine testing in the future. Esoteric tests for hospital-affiliated laboratories that are well on their way to widespread adoption include those for hospital-acquired infections, HIV, HBV/HCV, CT/NG, and HPV.
• Next generation sequencing technologies will increasingly be utilized for biomarker discovery for assay development, patient diagnostics, and companion diagnostics-driven applications. These technologies enable high-speed analysis of DNA and RNA as tools molecular tests.
• Reference laboratories that rely too heavily on routine testing will eventually be forced out of the market as pricing pressures increase and hospitals and physician-office labs grow to compete. Manufacturers are likely to develop more sophisticated technologies and expand in the esoteric testing segment to gain market share.
• There is very high demand for diagnostic tests in developing countries. However, the high cost of tests restricts large-scale adoption. Companies focused on capturing this large market must introduce low-cost tests.
• A growing middle class in developing nations provides new clinical diagnostics market opportunities. With increasing purchasing power in the developing world, more people will gain access to private healthcare services, since they will have greater disposable income to afford health insurance coverage.
• The equilibrium between cost-effectiveness and clinical evidence is increasingly an economic driver for new product development and adoption. Despite widespread interest in new esoteric tests, lack of evidence and high cost limit widespread adoption. Testing can be better implemented when enough clinical outcome data is generated to justify the high cost of test.

Life Sciences Research Tools:

• Vendors of drug discovery technologies are faced with a biopharmaceutical customer base that continues to consolidate. As a result, the biopharmaceutical industry is expected to further leverage a strong infrastructure and bargaining power; life science research tools vendors targeting their products to these customers will be subject to immense pricing pressures.
• Austerity measures being implemented in the United States and throughout Europe will result in cutbacks to government-funded biomedical research. Such funding cuts will slow the rate of biomedical research and limit spending on life science research tools.
• Shift from a “best-in-class” to a “one-stop-shop” strategy may backfire on quality reputation. While the drive to deliver complete workflow solutions can add value and convenience to customers when done correctly, it may also cause inconsistencies in quality throughout product portfolios and increase customer dissatisfaction.
• Commoditized markets are under price pressures from APAC companies. Mature markets with few technology barriers or differences may see increasing pricing competition from APAC companies due to low manufacturing costs (e.g., sample preparation kits).
• Quality assurance and quality control (QA/QC) testing is an increasingly significant component of life sciences technology market expansion in countries such as China, Malaysia, Thailand, and India. The Chinese government, for example, has reemphasized its commitment to increase funding for QA/QC after a number of highly publicized cases of contaminated or poor-quality consumer goods or food products produced in China.