Central European countries, which includes Germany, offer markedly less growth potential than other countries. This is one reason why manufacturers increasingly cease their activities (especially marketing activities) and channel their resources into other countries. Therefore, for some products, health care providers and retailers are definitely missing allies who will intentionally turn their attention to the market and also represent their position to the payers. On the other hand, competition in capturing the market is missing, too, which is a problem for the payer because the price competition is becoming increasingly one-dimensional.
We believe that over the next few years more and more manufacturing companies will reduce their business activities to simply offering the products. In some business segments of modern wound care where there are more than two dozen competitors, not enough potential for competition remains to trigger a genuine, long-term contest for market positions. All manufacturers situated at position ten or lower will have to examine whether they want to service the market long-term with this type of positioning.
For this reason a trend towards consolidation will result which will affect those product areas in which the market is not growing, where the price is already or will be under a lot of pressure and where there are many competitors. What are the alternatives for the manufacturers? The alternative involves newly industrializing countries and as such, emerging markets like those of Brazil, India and China. These markets are growing at a rate three times as strong as those of Central European countries. In these countries growth results in market potential which is easily tapped. In contrast, in Germany one has to compete for a comparatively small, already allocated market – with the result that the profit margin for the manufacturer and health care providers becomes narrower each year.
From the viewpoint of the health care provider the following question particularly has to be asked: In future, who will be my partner and who my competitor?
Manufacturers, however, should ask themselves: Can I be involved in shaping the future of the German market and generate sufficient growth (sales, profit)?