The Market’s Sellers Through The Looking Glass
The news continues to be filled with stories about failed clinical trials, slashed R&D budgets and the social controversies surrounding cloning, gene therapy and stem cells. This makes it easy to forget that the biotechnology industry continues to be full of promise-an industry whose contributions to science have been compared to the impact of the Italian Renaissance on art, and one whose future contributions can be barely imagined today.
Much attention is placed on that segment of the industry where cutting edge science is focused on discovery-the discovery of new genes, new cellular mechanisms, new protein functions, and ultimately the discovery of new drugs for treating disease. The sheer grandeur and ambition of these efforts often overshadows the fact that these discoveries result from the labors of groups of dedicated scientists who themselves are supported by a relatively small number of companies who produce “the tools of science.”
Indeed, without the vision and foresight of these tools companies, many of the scientific advances that have propelled us into the “Post-Genome Era” would not have been possible. Rarely in the spotlight of public attention and with product lines that range from the mundane to the truly amazing, biotech tools companies are the foundation upon which biotechnology research rests. The small niche occupied by these companies and the esoteric applications for which their products are intended obscure a vibrant and exciting market where buyers and sellers interact in ways both familiar and strange. With apologies to Lewis Carroll, our blog’s title The Looking Glass refers to our observations of these buyer-seller interactions.
As you will learn in our posts that will follow, the market’s buyers-life scientists-continually pressure the market’s sellers to produce new tools that will enable them to do nothing less than advance their understanding of life itself.
Apart from that daunting challenge, the biotech tools market exhibits many of the same characteristics of a consumer market while all the time asserting a deep-rooted belief that a more profound mystique attaches itself to making the tools of science than to renting cars, delivering packages, or selling clothing. After nearly 13 years of studying this market, however, we’ve observed that the leading companies no longer believe that this “mystique” insulates their market, their company, and especially their customers, from the customer-driven strategies and service practices that have revolutionized other industries.
The leading companies know that scientific customers can tell them where the market must head in terms of technologies and applications-and how long it will take to get there. Scientists will describe in detail the performance specifications a new instrument must meet. Scientists will also gladly discuss their individual definitions of “quality” and the price they are willing to pay. And they will quickly point to where a company’s weaknesses are relative to the competition’s as they take their business elsewhere. The life science market is changing rapidly, and the tools companies supporting the market must be equally dynamic. Just as the distinctions between scientific disciplines are blurring-a cell biologist is as likely to employ molecular techniques as not-so too are clear lines dividing previously well-defined market segments. Public and private partnerships, international collaborations, and corporate consolidation change the competitive landscape on a seemingly daily basis. As a result, new discoveries are propelled quickly from the research lab into the diagnostic and therapeutic markets. The distinctions between academic, industrial, government and clinical customers are diminishing, and the market has become truly global.
Today, scientists have a far wider array of technologies, techniques and products to choose from than they did even five years ago, and competition for each individual piece of business is the norm. Formerly simple product sales are not so simple anymore. Scientists increasingly seek “one-stop shopping” and an integrated product line to support their investigations from start to finish. But product cycles are shorter, imitation is more rapid and, as a consequence, the time period in which a product enjoys a distinct competitive advantage is significantly shorter.
With an in-depth understanding of customer needs, leading tools companies establish differentiation and improve their competitiveness in every phase of their product’s lifecycle-from the actual design and manufacture of the product to its pricing, delivery and post-sale support. Through our hundreds of reports based upon data collected from practicing scientists, we are proud to have played a role in our clients’ successes by increasing their understanding of their customers.