A STRATEGIC FRAMEWORK FOR START-UP MEDICAL DEVICE MANUFACTURERS IN SOUTH AFRICA

Ishan Maharaj,Bernadette Patricia Sunjka

doi:10.7166/30-3-2243

Abstract

An exploratory, qualitative study was conducted to establish why local medical device manufacturing firms are not starting up in South Africa. Semi-structured interviews were conducted with local medical device manufacturers to understand the market and the competitive environment in which companies operate, as well as elements of strategy implemented within these companies. The study concluded that local medical device manufacturers were not starting up in South Africa due to the high capital investment required, the prohibitive and unaligned regulatory framework, brand representation and the unwillingness of end users to switch to smaller brands, and cash flow and liquidity problems. Recommendations were made for start-up medical device manufacturers to mitigate any potential problems that might be faced, as well as for future policy development of medical devices. Included in this was the suggestion to realign South African medical device regulations with other successfully implemented regulations across the world.

Highlights

Healthcare is a critical area for service delivery in South Africa, yet 90 per cent of the market value of medical devices is still imported into South Africa [1]
Six semi-structured interviews were conducted with local medical device manufacturers around South Africa
To achieve the objective of this research, and to understand the competitive forces faced by medical device manufacturers, the strategies implemented in that industry and the competitive forces faced by start-up companies and small to medium enterprises in South Africa were identified

Summary

Introduction

Healthcare is a critical area for service delivery in South Africa, yet 90 per cent of the market value of medical devices is still imported into South Africa [1]. While the industry was forecast to grow at a compound annual growth rate of 7.74 per cent from 2013 to 2018, medical devices imported into South Africa were forecast to grow at almost twice that rate — 12.65 per cent — during the same period [2]. Dawar and Frost [4] suggest that competing with industry leaders is the most significant challenge for start-up manufacturers which rely on protectionist trade barriers or other governmental support to survive. As a result, they become subordinate partners to multinationals, or sell out and leave the industry [4]

Methods

Results

Discussion

Conclusion