Biomedical Engineering Reference
In-Depth Information
Similarly, other people involved in the supply chain are often motivated to
better understand the nuances of niche markets. It is possible to find amazing
sales people and therapists with years of experience and understanding within
a particular small market. Such people are a valuable source of evaluation and
feedback for small market innovators and usually come at little or no charge.
A therapist, for example, benefits from the availability of better solutions for
the therapist's clients.
From an economic standpoint, small markets often offer less competition.
Thus, a slow, inexpensive route to commercialization does not carry the same
predatory risks from big companies since the eventual payoff is not enticing
to them. It is also possible to innovate and commercialize a new product
without patent protection in a marketplace with less competition. Innovators
can fly “under the radar” much more easily in small markets.
A successful new product in larger markets may eventually become the
victim of its own success. As a new market matures and becomes mainstream,
the innovative company may be overwhelmed by larger competitors. However,
the nature of most small AT markets ensures that this will not happen -
usually, mainstream growth is simply not possible due to the small population
size of the target consumers.
Large companies can be at a disadvantage due to their size, especially when
developing and introducing new products to big markets. A large company
has an extensive supply chain and ongoing commitments for its own existing
products. Huge inventories of parts and investment in manufacturing can lead
to products that are long overdue for a facelift. Thus, a large company in a
large market may not be able to be responsive to newly identified problems
or product features coveted by customers.
A small market company has two advantages in this case. First, the com-
pany can introduce products without potentially cannibalizing its own exist-
ing product lines. Second, low volume manufacturing enables quick redesign
of specific parts, or even termination of a product in order to introduce a
completely new one.
Larger companies may hesitate to innovate because of the possibility of
confusing customers and partners. This is especially the case in AT, with
numerous people involved with purchasing a product. New, complementary
products, or products with new features too similar to existing products,
create too many messages about the best solution for a particular problem.
Creating more products for the same market may lead to lower volumes for
each product - rendering a large company without its normal advantages
over those used to operating in small volume markets.
Other revenue and cost advantages that are sometimes present in small
AT markets are found in product pricing and marketing efforts. Innovative
products in small AT markets may command higher margins, hence the payoff
for low volumes is a higher per-unit profit. Regarding cost, it may be easier
to introduce a small-market AT product because of the ease of publicizing in
the restricted avenues for a particular niche. Therapists and customers have
