In developed countries with regard to aging population, the healthcare sector plays a large role in government spending. The share of healthcare in GDP increases. This area is, with regard to individual segments and demographic trends, paid high attention. Medical devices play an important and increasing role in the delivery of healthcare.
Medical Device is defined as any instrument, apparatus, appliance, software, material or other article, whether used alone or in combination, including the software intended by its manufacturer to be used specifically for diagnostic and/or therapeutic purposes and necessary for its proper application, intended by the manufacturer to be used for human beings for the purpose of: diagnosis, prevention, monitoring, treatment or alleviation of disease; diagnosis, monitoring, treatment, alleviation of or compensation for an injury or handicap; investigation, replacement or modification of the anatomy or of a physiological process; control of conception; and which does not achieve its principal intended action in or on the human body by pharmacological, immunological or metabolic means, but which may be assisted in its function by such means (Medtech, 2014).
Medical technology is generally associated with high technology. However, it is also less sophisticated products and technologies such as operating tables, massage devices, bandages etc. These less complex sub-fields represent a large number of patent applications, and the total field is the second largest of the suggested classification with 6.3 percent of all applications in 2005 (OECD, 2014).With increased governmental interest in value assessment of technologies, medical device manufacturers are finding it increasingly necessary to become more familiar with economic evaluation methods. Other areas which are fundamental for the medical device industry are regulatory restrictions and legal obstacles (Matsuoka, 2012)
Currently, medical technology is characterized by a constant flow of innovations, which are the result of a high level of research and development within the industry, and with the close co-operation of users. Products have a typical lifecycle of only 18-24 months before an improved product becomes available (Medtech, 2014).
The method that will be used to analyze the market for medical devices, will be an analysis of the external environment based on the factors affecting aggregate demand in the economy and leading to its potential growth. The Porter’s Five Forces model will also be used. This model is one of the basic and also the one of the most important tools for analyzing the competitive environment of an industry or a company and its strategic management. Its creator is Michael Eugene Porter from Harvard Business School, Institute for Strategy and Competitiveness. The model works with five elements. The essence of the method is forecasting the development of a competitive situation in the surveyed sector based on an estimate of the possible behavior of the following entities and subjects involved in a given market and the risks for the sector from their side (Porter, 2008).