Synthes' origins are located in the non-profit Swiss research group, Relationship for the analysis of Internal Fixation or, AO, as it is referred to by the Swiss. The AO was made by several doctors including orthopaedic doctors, metallurgists and other researchers, whose goal was to find other means restoring complicated fractures because the techniques used around enough time, the 1950's, was either left patients suffering a few months of treatment or with long lasting disabilities. AO was built around three basic principles research, education and development, the building blocks for just about any R&D company. Based on the education aspect of the organisation AO, would frequently offer multi-courses for other orthopaedic surgeons to enlighten them on the new interior fixation techniques.
AO began to work with other non-profit organisations, distributing implants to "a specific region" in the world, with exclusive privileges. Synthes was given exclusive rights to THE UNITED STATES, and its counterparts Stratec and Mathys were given exclusive rights to Western European countries and Eastern Europe Asia and Africa respectively. Synthes Itself was split into four different companies, Orthopaedics, Spine, Maxillofacial and Canada. For the intended purpose of this report the key focus will be Synthes Orthopaedic; they are the leader in US orthopaedic stress implant market with a domestic market share of approximately 50%.
The question posed is whether or not Synthes should invest in bioresorbable devices, they are pins or screws or other fixation devices that degrade as time passes and are ingested by the body instead of being removed physically. The obvious benefits is to the patients, because they'll a smoother recovery process, the major problem that companies face however is locating the formula to keep the fixation devices for a long enough period of time to ensure full restoration.
One of the primary reasons why Synthes should get into bioresorbable devices is the fact they are a R&D company and growing new products is their center function, it is one of the major worth of the business. There is also the actual fact that any lapse in the R&D of the company can lead to their competitors producing a like product, finding a patent and increasing market talk about and identification at the trouble of Synthes. With companies such as Johnson and Johnson and Boimet fighting to achieve the same goal Synthes needs to continually be one step forward. In most cases it is best to be the first mover in an industry, for example when Phizer created the Viagra tablet, albeit accidentally, they retained a patent on the medicine for several years and the exclusive production rights allowed those to corner the marketplace. First movers sometimes even create an industry standard, such is the case for Microsoft. Many people still assume that Windows is the foremost and only operating-system, even though there are many other, far better OS's on the globe. Furthermore Johnson & Johnson have previously crept forward by producing the second era of polymers for the industry, even although success is still much less great as it could be, they still have that expertise. Synthes can use that knowledge to keep the research and possibly produce the third technology of polymers, the "game changer", the the one which works as well as they industry expectations. A key function that is required is not only research or develop the merchandise, but also to market it and another reason Synthes should consider the bioresorbable market is because they have a hugely competent sales team, the case says they will be the most experienced in the industry.
There are reasons however why Synthes should not go in the forex market. Key among these is the fact that the market is growing very little by little and is still highly unstable according to the case. The study into steady polymers is certainly going at a snail's pace, it can be argued however that slow growth is better than no development. Take the example of Apple who experienced in the shadows of Microsoft for quite some time, but one respite with the start of the iPod and the iPhone is assisting to push these to the top of the technology market, their persistence paid. The other main reason is seen in the case of Johnson and Johnson in the event, although these were one of the first movers in to the bioresorbable market, they failure of the product to execute on par with the metallic fixation devices has kept them behind Synthes due to that.
The four options mentioned by the Synthes professionals were to either disregard the bioresorbables completely while concentrating on the improvement with their metallic implants or even to "wait-and-see", where-by they might monitor the improvement of the other manufacturers and learn from them as they perform assessments. During this stage Synthes will still commit heavily into the creation of bioresorbables, this way they can easily enter the marketplace if indeed they it started turn into a sounder means of income. THE 3RD method was to develop and market their own line of bioresorbables with the current polymers on the marketplace first developing plates and screws for hand, foot, wrists and ankle joint fractures and then they plan proceed to paediatric fractures. The ultimate option is to keep research and development in to the 3rd technology of bioresorbables implants, to increase the polymers in order to strengthen them and increase their stability. The industry is convinced that progress can be made in the development of the polymers but is nearly sure how much progress can actually be made. As with any commercial level decisions there are extensive advantages and or down sides connected.
If Synthes thought we would completely ignore the bioresorbables market their major benefits is that they can have the ability to focus more closely on their core competence, the development of metallic implants and improve it faster than their competitors as all their concentrate will be on that facet of the market. Ignoring the market completely is also a means of lowering the potential risks included, because this is already their central function and because that sector of the market is a lot more secure than that of the bioresorbables market these are assured sustainable short-term success. However this short-term success is not conducive to growth.
Synthes will, in place, be restricting their growth leads by not wanting to develop their bioresorbables sector. As risky as it can be they if indeed they were to take part and it became successful the rewards would heavily out-weigh the risks. They are essentially a study and development company and as previously mentioned R&D is one with their core values, not wanting to research the probable of bioresorbables would be undermining the type of the business itself. Their experts and research workers may potentially become frustrated if they're prohibited to even touch what to them may be the future of fracture repair.
The second choice that Synthes professionals reviewed was to "wait-and-see" the actual other makes are doing, making others do the key research and make the major blunders, while Synthes learns from them and develops their own type of bioresorbables but doesn't market them until market conditions are favourable. In this technique Synthes limits their dangers significantly by not committing completely to either the development or marketing of these bioresorbables. They'll only market if conditions are favourable, if conditions stay as unpredictable as they currently are then Synthes can simply pull out of the race. However the intend to spend $20 million into the development of their own bioresorbables; this is a very large and significant investment. If it so happens that the marketplace conditions remain unpredictable and Synthes makes a decision never to go to market, they will incur a $20 million reduction. They also face less risk in the development aspect because they'll be leaving almost all of the work with their rivals; this also restricts the amount of developmental failures they would incur if they were undertaking this independently.
This may seem like a great choice for Synthes, however if their rivals do manage to develop more stable polymers and split the secrets of bioresorbable inside fixation devices, then Synthes operates a patent blockage risk. If for example J & J develop a perfectly functioning polymer and get their solution patented they may have only production protection under the law for that particular formula for approximately a decade. In those years they can create such a foothold in the market as the first movers that it could not only prevent the development of Synthes, however in the worst circumstance circumstance, drive them from the internal fixation device market completely. Inside the pharmaceutical industry, companies that have first mover advantage tend to preserve that advantage for an extremely long time frame, as their products tend to be more trusted than their opponents. The other disadvantage for Synthes is the fact even when a patent does not completely stop them from the industry, they still run the risk of dropping major market share to their many competitors. In the scenario where every one of the opponents develop at the same pace and establish their products at the same time, the marketplace pie will be divided among more players than is really necessary thus limiting the potential market show for Synthes.
The third option of developing and marketing their own bioresorbables is the most high-risk option that Synthes may take. Nonetheless they may gain from the "first-mover" edge mentioned above, there is also the capability to patent their formulas, block out competition and secure their place searching for an extended time frame. This program also offers Synthes the possibility to recuperate their investment into the development of their bioresorbables with the potential dividends from marketing with the current polymers. These advantages however be dependent greatly on the success of the development stage. Therein lays the risk. If Synthes scientists and researchers get it wrong, the results could be disastrous for the business. The investment on development is $20 million, no talk about was made of how much it would cost to really market the product as well, this will drive costs even higher, and also to have a product fail with those additionally costs could be probably fatal for Synthes. This is especially true for the paediatric fracture sector that Synthes is wanting to go into, failed products are bad enough, but failed products for children is nearly irreversible harm for Synthes. No company wants to be branded as unsafe for children; something like this will lead to everlasting scarring for Synthes.
The final option of ongoing research and development into 3rd technology polymers, this once again is highly beneficial to Synthes as it profits them with their center competence of R&D. This method will please their analysts and experts greatly. It is a more well-balanced option because it is less dangerous than expanding their bioresorbables with the current unpredictable polymers available which is far more proactive than disregarding the market completely or letting waiting for their competitors to do the research and testing. The expenses involved however will be higher than most, if not absolutely all of the other methods, but the rewards if indeed they get this one right will be sustained than all the previous methods put together. There are other downsides however, for example even though researchers and other researchers will be very happy to be working on cutting edge new technology, many failures will occur in the interim which can lead to a huge amount of irritation for them, which may be demotivating. Synthes still run the chance of their rivals growing better polymers before they are doing which would leave them in much larger credit debt than the other methods.
The dangers and benefits are great whatever choice Synthes make, but the fact remains that they are essentially an R&D company and should stick to their central competence of research development and education. They can be industry market leaders and need to maintain the high calibre performance they are demonstrating over the years of their life. Ignoring a fresh development, or waiting for their competitors to build up first should not even be a choice for such a company. However at the same time jumping into growing and marketing an unstable product within an unstable market is very fool hardy and much too risky to undertake. Continuing to build up a new and safer means of internal fixation with bioresorbables is the best option for Synthes, the creation of another era of polymers should be their goal.
In the issue of if Synthes will impact on the bioresorbables industry, it's the opinion of the writer they can have an enormous effect on the progress of the study and development facet of the industry. Synthes have been a significant player in the metallic fixation devices sector, they therefore have the knowledge about how the well the devices need to hold bones alongside one another, and also how they need to be molded or made to ensure maximum success. They are researching the effectiveness of the second technology polymers and can also begin to develop the 3rd technology of polymers to catapult the industry into the future. The sheer size and features of Synthes enable those to exert a huge amount of impact unto the marketplace.
There a wide range of ways for Synthes to create resorbables in to the market. They are extremely innovative, with massive amount resources, suitable management and they are capable of avoiding "the valley of loss of life" where many improvements finish up with poor management. Synthes can account their own kick off and therefore do not need aid from venture capitalists as a result. Great care needs to be used when producing resorbables; and it is the opinion of the writer that Synthes should present their resorbables by means of small screws or pins for smaller fractures and breaks first before they commit. This way they could be used on less complex accidents to test just how long they previous, smaller fractures need less time to cure. If Synthes finds that their products are working properly then and only then, as long as they consider to produce for larger more complex injuries. That is far less dangerous but at the same time means that Synthes can be proactive in their research and development.
Use for small fractures only, not major sophisticated broken bones. To make sure that they are steady enough and do no degrade in a brief period of energy.
Merge to contend with other two heavyweights.