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Middle East

18 December 2013

Arjan Hock

Waheeb Al Otaibi

Alain Yazbeck

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Agenda

Financial Overview ME

Existing business in Iraq/Jordan/KSA/Libya/Egypt

Competition

3 Year Plan

Dubai Office

Charity Foundation ME

Conclusion

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Strengths

• Market share worldwide• Most advanced products• Largest customer base ( >320,000)• Best reliability after 10 years• Highest expenditure on research (14%

of the revenue)• Coordinating with the pediatric

departments in both public and private hospitals for early intervention

Opportunities

• Healthcare hearing awareness and newborn screening programs will increase our sales by 10-20%

• Heath Insurance policy provides partial reinforcement

• Presence of NGO• New lifestyle (iPod and MP3) between

the ages 12-25 years, hearing loss in the long run

Threats

• MED-EL and AB are offering prices that are 20-25% less than our price. FOC SP. This caused a 50% loss of market share this year in certain ME countries

• Neurelec (new-comer) will be competing aggressively to get a market share

• Continuously changing governmental rules• Security issues in Libya, Iraq, Egypt, Syria

Weaknesses

• High price (20% higher price than MED-EL and AB)

• Slow process in making fast decisions as it takes many levels to approve a request from a distributor

• Some Cochlear distributors don’t have dedicated trained clinical technical Specialists

S W

TO

Financial Overview - SWOT

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Existing Business – Jordan

Existing structure

3 clinical specialists 2 surgeon

consultants

4 room speech & hearing

rehabilitation center with 2 full-time specialists

Planned Structure

Expanding of rehab operations

Opportunities

Expanding VistaFix with

increased awareness

Barrier

Price and unethical

competition

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Existing Business – Iraq (including the northern region of Kurdistan )

Existing structure

Team in Baghdad in cooperation with Alnamaa Scientific

Bureau & MoH

3 clinical specialists

Full inventory of spare parts and we are running a fully functional in-house repair and warranty service

Planned Structure

Establish a rehab operation,

establish a local service office

A speech and hearing

rehabilitation center

Opportunities

Kurdistan in Northern Iraq

CI tender, Vistafix and Baha initiative

Workshop with  Save-the-Children Fund in December

CI project in Southern Iraq; early in 2014.

Almost no competition

Barrier

Safety

Rural areas difficult to travel to

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Existing Business – Libya with Helm

Existing structure

Local Office in Benghazi with

Dr. Firas & surgical team

3 speech & hearing

rehabilitation centers in Benghazi,

Albaydha, and Ajdabya with 6

therapists

Planned Structure

Expand rehab operation

  

New hearing rehabilitation

centers in Tubruq, Zleetin,

Misrata, and possibly Tripoli

Initiatives

Starting 3 audiology and

hearing aid locations

before January 2014

Provides audiological support and helps early

diagnosis of CI and Baha

candidates

Opportunities

Many opportunities in Libya since it is a rising

economy with very little services available

today

Barrier

Political & Safety issues

Helm is not the Cochlear

distributor there

Fragile relation between Alfa

and Helm limits our abilities to expand.

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Competitors Strategy – Med-El

• Most sold product: Concerto + Opus 2 (Rondo not commonly used pending approval for pediatric use)

• Offers training abroad. Local training perceived as poor

• Offers 2 FOC units per 10 ordered

• Offers 6 coils with new processor and 20% discount on coil purchases

• Warranty terms: 3 years on processors, 1 year on accessories

• Repairs sent to EU: long delay complaints

• When loaner granted, offered with full package of accessories

• More active in the market

Med-El Strategy elements

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Competitors Strategy – Advanced Bionics

AB Strategy elements• Most sold product: HiRes 90k / Naida

• Offers training abroad. Local staff poorly trained to train.

• Offers 1 FOC unit for every center willing to start

• Distributor uses synergies with other product lines such as ENT stations to equip private clinics

• Warranty terms: 3 years on processors, no warranty on accessories

• Quality same as Cochlear but why not try cheaper

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F15-17 Action – Customer Experience Customer

Experience

• Awareness

InitiativeExperience Actions

Entice

• Develop Infomercial and publish in written media• Why / How do I get a CI / Baha 3D animation• Share experiences with patients groups• Hearing Loss campaigns in association with clinics• Inform referring professionals of available solutions

• Analyse, understand existing referral pathways

• Create new ones and improve existing pathways

• Present of the ENT box• Play a role in the counselling sessions• Make use of printed and video testimonials

• Train clinics and facilitate connections with established Centers of Excellence

• Value selling to relevant stake holders

• Develop and offer methods/studies/ protocol for monitoring improvement brought by our technology to clinic’s operations.

• Develop long life time programmes to exclude competition

• Ease of use• Highlight SCAN and Wireless

• For IB: Allow recipient to try in real situation scenario (create simulator tools)

• Distribute to patient groups and clinics quarterly newsletters highlighting the success story of a recipient

• Share regular technical updates with ENT professionals

• 24/7 hotline• SPOT• Shorten repair cycle

• 1 SPOT sessions per year per implanting center• Quarterly newsletter• Local repairs?

ImpactExperience Initiative Actions

Entice

Enter

Engage

Empower

Extend

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F15-17 Actions – Operational Excellence

• Suggest new business models within Distributor (combined, bonus, franchise?)

Initiative Impact Actions

• Empower Cochlear position in Distributor staff (Ex. KSA)

• Assessment

• Sustainable financial solutions (Credit limit, ceiling, terms, lease)

• Tenders via regional GCC tender request medical devices

• Increased cooperation with Charity foundations Globally

• Support Academy (Advanced Arab Academy for Audio vestibular).Qatar

• Speed internal approvals for customers related expenses

• Meeting planned with e.g. Al Jalila foundation in Dubai & Dr Khalid Qatar

• Asses process and adapt if necessary

• Dubai office • Project team/opening @ GCC congress 15-17/01/2014

• Long term agreements with free upgrades• Quarterly/yearly Bonus for distributors• Direct to certain clinics with logistic support of

distributor• Change of distributor in Bahrain• Appoint distributor in Qatar

• Commission structure to distributors• Assessment distributor

Operational Excellence

• Long-term agreements, planning, financial

• Register process

Initiative Actions

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F15-17 Actions – Product Innovation

• Include ME Markets in CMR and Cochlear trials

Initiative Impact Actions

• CMR Attract• Matrix test for speech testing

• Develop surgical technique/tool for Baha with rising star

• Dedicated symposium in Vienna• Meeting between Dr. and manufacturer for

surgical tools

• Cost effectiveness of wireless accessories

• Health economist involvement• Target groups of users with dedicated satisfaction

evaluation:• Paediatric recipient (schools)• Active professionals (individuals)

• Continue launch of N6, Baha 4 Attract, Acoustic Implants Portfolio, Wireless Accessories

• Fully implantable Carina with Military personnel; a high profile clinical investigation.

• MET semi implantable: alternative to hearing aids for patients with recurrent ear canal otitis.

• Involve customers/universities in ME closer with product development

• Modulation of Product life cycle management for the emerging markets in the ME

• Long term relation building• Diversified portfolio and price

competitiveness across time

Product Innovatio

n

Initiative Actions

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F14-17 Priority Actions – Marketing

Marketing

Continuous increased awareness & brand image Special PR campaigns Update Arabic website

Analyse & create new referral pathways Continue launch of N6, Baha 4

Special projects for upgrades/replacement

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F14-17 Priority Actions – Distributors

Distributors

Training; Clinics/Clintech (Distributors) Planning of quarterly workshops together with distributor

Analyse & implement new business models with distributors

Combined sale (in/direct, lease, bonus, franchise) Appoint new distributor in Bahrain & Qatar

Implement Rehab program in Libya & Iraq (with distributor)

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F14-17 Priority Actions – Business

Business

Start registration process GCC tenders Finalize & implement Charity foundation business plan Actions to be closer to Arab academy (VISTA in 2014),

trials, R&D in ME, special training Actions to increased cooperation with MoH via special information sessions,

long-term contracts, adapted support, cost calculation support (Health economic)

Dubai office opening and continuous business; online store

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Enter: matching needs to offersIdentify, at the source (The referral), candidates for the treatment options we provide

• Own the cases requiring the treatment - locking out the competition

• Facilitate access to the Treating Center- ClinTech? act as coordinators (Buddy)- Connect Sources with access to treatable

cases

• Increase the share of private patients - impact on Dubai office treatment package.

• Increase the surgical activity of some medical sites - additional leverage

- more control

• Increase the visibility of some medical sites - which can increase their likelihood of negotiating public funds

• Establish wide connections in the medical community - to grow our visibility and business.

• Patient finder/assessment consultancy fee?

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