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ePaper created 2015-02-16, 09:59:52 | version 1.33.01
news 15Show Preview IDS Cologne 2015 In 2013, the global dental implant market—composedofthesaleofdental implant fixtures, final abutments and other devices—was valued at over US$3.7 billion. The European market, valuedatnearlyone-thirdoftheglobal market at close to US$1.2 billion, con- tracted through 2014, as uncertain economic conditions continued to re- duce procedure volumes and as more low-cost competitors entered the mar- ket, driving down prices. These factors hampered the ex- pected economic recovery and re- sumption of growth projected for 2013.1 As a result, the dental implant marketwillcontinueitsdeclinebefore stabilising in 2015. Only then will the European market slowly begin to re- cover. Factors such as low gross do- mestic product growth and high un- employmentcontinuetorenderdental implantprocedures—whichareprima- rilypaidoutofpocketbypatients—cost prohibitive, while alternatives, such as bridges and dentures, that are per- ceived as more affordable will repre- sent attractive options. Dental implants were invented in Sweden; as a result, it is not surprising that a great number of premium man- ufacturers are based in Continental Europe. In the past, premium manu- facturers, such as Straumann and DENTSPLY Implants, were able to rely on their long-standing reputations in themarketandthehighqualityoftheir products to command higher prices than did some of their competitors. More recently, however, some of the premium competitors have em- ployed strategies to appeal to increas- inglycost-consciousconsumers.Forin- stance, Straumann has reduced the priceofitstitaniumimplantsby15per cent in Austria, Germany and Switzer- land.Whilethepricechangeonlycame into effect in the first quarter of this year,thestrategyappearstohavebeen effective because the company re- ported a 6 per cent rise in first-quarter revenue2 compared with a 6 per cent decrease in the same period last year.3 The price reduction has come at a perfect time: while economic condi- tions begin to slowly improve, con- sumers are still extremely price sensi- tive. These price cuts therefore allow dental professionals to offer premium implant products to their patients at a reduced rate. Straumann’s price reduction is notitsonlyforayintothevaluemarket. In the first quarter of this year, the company purchased US$30 million worth of bonds from low-cost South Korean dental implant manufacturer MegaGen. The investment, which will be converted to shares in 2016, will help bolster Straumann’s revenue while allowing it to participate in both the premium and value segments, thusappealingtoawiderangeofprac- titioners and patients alike. Straumann is not the only com- panyshakingthingsupintheworldof dental implants. Zimmer Dental re- cently announced its acquisition of ri- val Biomet. While both companies are better known for their orthopaedic products, they are fairly significant competitors in the dental industry as well.Lay-offsarenotuncommonwhen companies merge, especially when the companies in question offer the same types of products. This can have a negative impact on sales in the short term, as the newly conjoined compa- nies’ sale force decreases, leading clients to switch to other competitors. However, this will not be the case with the Zimmer–Biomet merger, at least not in the short term, as the sales teams from both companies are ex- pected to be retained through the merger. The cost of retaining both sales teams has been estimated at US$400 million.4 While the effect of thisacquisitiononthemarketremains to be seen, the fact that the sales force will not be decreasing bodes well for the newly merged companies, likely resultinginanincreasedmarketshare in the dental implant segment. There is discussion of merger and acquisition activity among other com- panies in the segment too, with Nobel Biocare reportedly in talks to sell to privateequityfirmsandstrategicbuy- ers. While these talks are still in the very early stages, what is certain is that there has been a great deal of ac- tivity in the competitive landscape in the past several years. This, combined with the afore- mentioned economic factors, is turn- ing this once stable and mature mar- ketintoadynamic,action-filledspace. With the dental implant market set to rebound in Europe and with revenues expandinginothercountries—particu- larly in the rapidly developing BRIC and Middle Eastern markets—the global industry is poised for even fur- therchange,andthecompetitiveland- scape could look entirely different a few years from now. Editorial note: A list of references is available from the publisher. Dental implant competitors shake things up By KristinaVidug,USA Fast, High-Quality Images IP Size 0, 1, 2, 3 and True 4c Touch Screen with Preview Network and TWAIN interfaces - FireCR Dental PSP System Visit us at IDS COLOGNE at BOOTH B-059 HALL 2.1 AD Kristina Vidug is Market Research Analyst at DecisionResourcesGroup,aUS-basedmarketin- formation provider. © Gajus/Shutterstock.com