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Portfolio Mix

Improving the product mix increases competitiveness, customer satisfaction, profitability and efficiency

Problem

In the field of the healthcare industry, both in the medical devices sector and in the consumer healthcare sector, there is a common challenge: how to improve the product mix within their respective portfolios. Medical device and consumer healthcare companies often face the challenge of balancing their product mix within their respective portfolios. This involves making strategic decisions about which products to include, which to eliminate, and how to optimize existing products.

Size of the Problem

  • According to a market report, the global medical devices market is expected to reach $543.9 billion in 2021 (1).
  • A study conducted in the consumer healthcare industry revealed that 75% of consumers consider the availability of quality products an essential factor when making purchase decisions (2).
  • In a recent medical device industry executives survey, 68% of respondents indicated that improving the product mix was one of their top priorities (3).

Why it matters

Improving the product mix in medical device companies and consumer healthcare companies is crucial for several reasons:

■ Increased competitiveness: A well-balanced product mix allows companies to compete more effectively in the market and keep up with changing consumer demands.
■ Customer satisfaction: By offering a variety of products that meet the needs and preferences of customers, companies can achieve greater customer satisfaction and build long-term loyalty.
■ Profitability and efficiency: By eliminating products that do not generate enough revenue or have a low-profit margin, companies can improve their profitability and use resources more efficiently.

Solution

Artificial intelligence (AI) is essential in improving the product mix. Companies can make more informed decisions and optimize their portfolio by using advanced algorithms and predictive analytics. Here is how AI can be helpful in this context:

■ Data analysis: AI can analyze large volumes of market data, purchase trends, and consumer preferences to identify patterns and trends. This helps companies understand which products are most in demand and what changes they need to make to their product mix.
■ Demand forecasting: AI algorithms can predict future product demand, which allows companies to anticipate market needs and adjust their product mix accordingly.
■ Personalization: AI can also help personalize the product mix to meet customers' specific needs. By analyzing consumer behavior and preferences, companies can offer products that are tailored to each individual.The use of AI in improving the product mix offers a number of benefits:
■ More informed decision-making: By using advanced data and analytics, companies can make more informed and evidence-based decisions.
■ Portfolio management efficiency: AI allows companies to optimize their product mix, eliminating those that do not add value and adding those that have more significant potential.
■ Market adaptability: With the ability to predict demand and analyze market trends, companies can quickly adapt their product mix, maintaining a competitive advantage.

Datasources

  • Historical Sales Databases: These databases store information about past sales of products and services in the pharmacy. They help identify customer purchasing patterns, determine popular products, and understand demand trends.
  • Supplier and Product Databases: These databases contain information about the pharmacy's products and services and details about suppliers and manufacturers. They enable detailed tracking of product variety and availability in the market.
  • Customer Databases: These databases store data about customers, their preferences, buying habits, and behavior. Utilizing this information, the pharmacy can generate personalized recommendations and adapt its portfolio mix based on customer needs and preferences.
  • Competitor and Market Databases: These databases contain information about competitors in the pharmaceutical market, their product strategies, pricing, as well as market trend data. They help the pharmacy stay informed about industry developments and adjust its portfolio mix accordingly.
  • Market Research and Survey Databases: These databases hold results from market research and customer surveys. They provide valuable insights into changing consumer preferences and allow adjustments to the portfolio mix to align with current demands.

Citations

  1. "Global Medical Device Market Size, Share & Trends Analysis Report," Grand View Research, December 2020.
  2. "Consumer Healthcare: Meeting Consumer Needs," Deloitte, 2017.
  3. "2021 Medtech Market Outlook," Ernst & Young, 2021.

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