Biomedical Venture Creation: Siemens Healthineers Analysis

This project analyzes Siemens Healthineers' biomedical innovation and venture creation, specifically targeting the Saudi Arabian market. The report meticulously examines the company's raison d'être, including its mission, passion, and values, along with a comprehensive market analysis encompassing TAM and customer personas. It delves into value creation through detailed product descriptions and quantified value propositions, while also exploring competitive advantages and customer acquisition strategies. The project further analyzes product unit economics using LTV and COCA models, alongside sales strategies and overall economic considerations. The design and build section covers key assumptions and tracking metrics, while scaling strategies address market expansion. Finally, the project outlines venture formation, capitalization, and investor profiles, providing a holistic view of the venture creation process. The project adheres to the guidelines of the BMI 598 course, applying concepts learned to create a detailed analysis of a biomedical venture.

Running Head: BIOMEDICAL INNOVATION & VENTURE CREATION
BIOMEDICAL INNOVATION & VENTURE CREATION
Name of the Student
Name of the University
Author note

1BIOMEDICAL INNOVATION & VENTURE CREATION
Executive Summary
The mission of this report is to examine the Biomedical Innovation and Venture creation of one
of the most renowned Biomechanical company named Siemens. The target market has been
chosen as Saudi Arabia. The report examines various business strategies that include RAISON
D’ETRE including Mission Passion, Values; Market analysis including TAM, persona; VALUE
CREATION including Product Description, Problem, Quantified Value Proposition and others.
Product Unit Economics has been also analysed using COCA and LTV.

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Table of Content
1 RAISON D’ETRE.............................................................................................................5
1.1 Mission:......................................................................................................................5
1.2 Passion:......................................................................................................................5
1.3 Values:.......................................................................................................................6
1.4 Initial Assets:..............................................................................................................6
1.5 Initial Idea:.................................................................................................................7
2 INITIAL MARKET...........................................................................................................7
2.1 Beachhead Market.......................................................................................................7
2.2 End User Profile..........................................................................................................8
2.3 TAM:.........................................................................................................................8
2.4 Persona:......................................................................................................................9
2.5 10 Customers:.............................................................................................................9
3 VALUE CREATION.......................................................................................................11
3.1 Use Case:..................................................................................................................11
3.2 Product Description:..................................................................................................11
3.3 Problem:...................................................................................................................12
3.4 Quantified Value Proposition:.....................................................................................13
4 COMPETITIVE ADVANTAGE......................................................................................13
4.1 Moats:......................................................................................................................13
4.2 Core:........................................................................................................................14
4.3 Competitive Positioning:............................................................................................14
5 CUSTOMER ACQUISITION..........................................................................................14
5.1 Decision Making Unit:...............................................................................................14
5.2 Customer Buying Process:..........................................................................................15

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5.3 Windows of Opportunity:...........................................................................................16
5.4 Possible Triggers:......................................................................................................16
5.5 Regulatory Strategy:..................................................................................................16
5.6 Reimbursement Strategy:...........................................................................................17
6 PRODUCT UNIT ECONOMICS......................................................................................17
6.1 Business Model:........................................................................................................18
6.2 Pricing:.....................................................................................................................18
6.3 Short Term LTV:.......................................................................................................18
6.4 Short Term COCA:....................................................................................................19
6.5 Medium Term LTV:..................................................................................................19
6.6 Medium Term COCA:...............................................................................................20
6.7 Long Term LTV:.......................................................................................................21
6.8 Long Term COCA:....................................................................................................21
7 SALES...........................................................................................................................22
7.1 Preferred Sales Channel:............................................................................................22
7.2 Sales Funnel:.............................................................................................................23
7.3 Short Term Mix:........................................................................................................23
7.4 Medium Term Mix:...................................................................................................24
7.5 Long Term Mix:........................................................................................................24
8 OVERALL ECONOMICS...............................................................................................25
8.1 Estimated R&D Expenses:.........................................................................................25
8.2 Estimated G&A Expenses:.........................................................................................25
8.3 LTV/ COCA Ratio:...................................................................................................25
9 DESIGN & BUILD.........................................................................................................26
9.1 Key Assumptions:.....................................................................................................26

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9.2 Assumptions Tests:....................................................................................................27
9.3 MVBP:.....................................................................................................................27
9.4 Tracking Metrics:......................................................................................................29
10 SCALING.....................................................................................................................30
10.1 Product Plan for Beachhead Market:.........................................................................30
10.2 Next Market:...........................................................................................................31
10.3 Product Plan Beyond Beachhead Market:..................................................................31
10.4 Follow-on TAM:.....................................................................................................32
11 VENTURE FORMATION.............................................................................................33
11.1 Stakeholders:...........................................................................................................33
11.2 Define Roles & Responsibilities:...............................................................................33
11.3 Assign Roles & Responsibilities:..............................................................................34
11.4 Engagements:..........................................................................................................35
11.5 Corporate Filings:....................................................................................................35
11.6 Formation Agreements:............................................................................................35
12 CAPITALIZATION......................................................................................................36
12.1 Capital Need:..........................................................................................................36
12.2 Use of Funds:..........................................................................................................37
12.3 Offering Type:.........................................................................................................37
12.4 Pre-Money Valuation:..............................................................................................38
12.5 Post-Money Valuation:............................................................................................38
12.6 Investor Profile:.......................................................................................................39
12.7 Investor Persona:.....................................................................................................39
12.8 Ten Investors:..........................................................................................................40
References:........................................................................................................................41

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1 RAISON D’ETRE
1.1 Mission:
The mission of Siemens Healthineers is to be the most trusted partners, which possess the
potential to enable the health systems as well a healthcare providers worldwide for enhancing the
medical outcomes while reducing the costs. According to Matthias Platsch, Head of Services, by
adding the series of Medicalis’ technology solution to the portfolio of Siemens Healthineers
organization, the organization is targeting to complement as well as support their offerings to the
population of Health Management and Value-Based Healthcare (Acs et al., 2016). Currently the
management is considering it as key priority for their ongoing expansion through their business
services.
1.2 Passion:
As per the management of the organization, their passion is to minimize healthcare issues
of the world by provision of efficient healthcare as well as laboratory equipments. The culture of
the organization has been designed to inspire the employees to put their hearts into healthcare.
The culture is shaped by the by the principles of the organization. Those principles not only
guide the behaviours as well as values of the organization but also allow the same to tap into the
rich learning capability within the organization. In order to emphasis on their passion, the
management of Siemens Healthneers believes their employee to be their power. According to Al
Shammari et al., (2016), the company possess 50,000 employees across the world who
demonstrates companionate as well as supportive ways while handling their profession which in
turn attract more consumers towards the organization.

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1.3 Values:
The chief three values of the Siemens Healthineers organization are responsibility,
Excellency and innovativeness. According to the management of the organization, the three core
values of the organization are responsible for the success of the same over 160 years.
Responsibility defines the way the organization is committed to the ethical as well as responsible
actions. When it comes to excellence, it is based on achieving high performance along with
excellent results. Lastly, by innovation, the organization ensures creating sustainable values. The
vision of the organization, that is to be the pioneer of the time, motivates the company to perform
their job effectively.
1.4 Initial Assets:
The chief initial assets of the company are its huge workforce, high brand equity, yearly
revenue and massive consumer base across the world. The current workforce of the organization
is 45,000. In order to maintain the efficiency of the employees and thus enhance organizational
performance, the organization uses innovative as well as personalized staff development,
coaching as well as training solutions. Not only has this, for preventing attrition and loss of
efficient workforce, the organization used several intrinsic as well as extrinsic motivational
techniques in order to enhance the performance of the consumers (Alharbi, Atkins & Stanier,
2015). The highly qualified and experienced workforce of the organization is considered to be
one of the chief reasons behind its high brand equity and yearly revenue. When it comes to the
massive consumer loyalty of the company, efficient offline as well as online marketing can be
considered as the chief tool to attract consumers towards the organization.

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1.5 Initial Idea:
In the year 1847, the organization started as a small family business in Berlin and was
founded by Werner Von Siemens. The history of Siemens Healthineers started in Berlin in the
mid-19th century as a part of what is now known as Siemens AG. Siemens & Halske was
founded by Werner von Siemens and Johann Georg Halske on 12 October 1847 (Alkhamis et al.,
2017). The company was formed around the inventions created by Siemens known as the
pointer telegraph. In the new invention, a needle was used to point out the sequence of letters
instead of using the Morse code. Eventually, the organization included electrometrical
equipments along with specializing in medical technology. Siemens Healthineers is connected to
the larger corporation, Siemens AG. The name a Siemens medical solution was adopted in the
year 2001, and the change to Siemens Healthcare was made in 2008.
2 INITIAL MARKET
2.1 Beachhead Market
The initial market of the organization is healthcare organizations of the countries in
which they have established their business. A beachhead market is defined as a small market that
possesses specific characteristics for making it an ideal target for selling new product as well as
services. The choice of the market is totally based on the compatibility between the product and
the resources available along with the market itself. In this case the product for the beachhead
market of Saudi Arabia will be the general imaging and diagnosis systems including X-Ray,
MRI, CT scanning and Advance digital imaging. The market is supposed to help the organization
to achieve its goals along with assisting the sae to advance from its infancy to other markets

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(AlShammari, Jennings & Williams, 2017). The organization has already presented the advance
imaging and diagnosis products in a good number of developed as well as developing countries.
Considering the fact that the healthcare equipment manufacturing industry of the western world
is getting saturated due to excessive competition between the competitors, the current beachhead
market of the organization for the advanced imaging and diagnosis products will be Saudi
Arabia. The healthcare organizations of Saudi Arabia are developing and the government of the
nation is trying to enhance the efficiency of the healthcare home through implementation of
modern healthcare equipments. Thus, the mentioned market of Saudi Arabia possesses the
potential to farther enhance the profitability of the organization to a great extent.
2.2 End User Profile
The end users of the advanced imaging and diagnosis products will be the patients and
care receivers of the healthcare centres. Considering the fact that the qualities of the advanced
imaging and diagnosis equipments offered by the organization to the consumers are higher
compared to its competitors, the healthcare homes using the equipments manufactured by the
Siemens Healthineer company are generally found to treat patients who belongs to the middle
class, upper middle class as well as elite lass of the society (Barr, 2016). When it comes to age,
the organization manufactures healthcare equipment that is required to treat patients of all ages.
2.3 TAM:
Total addressable market refers to a term that is typically used for referencing the revenue
opportunity available for a product as well as service. TAM helps an organization to assess its
business opportunities by serving as a quick metric of the underlying potential of a given
opportunity. According to researchers, due to increasing cost of imaging products in healthcare

9BIOMEDICAL INNOVATION & VENTURE CREATION
industry, majority of the developed as well as developing healthcare organisations it is expecting
better product in lower cost. Therefore, by the year 2020, the total addressable market of the
advance imaging devices manufactured by Siemens will be more than 12.3 billion dollars
(Cooper, 2017). The domestic medical device industry of the nation is small, with a
disproportionate reliance on imports and a complex regulatory environment. The market of
advanced imaging products is expected to evidence growth by 15 percent, which is significantly
higher compared to the global industry growth by 4 to 6 percent.
2.4 Persona:
Persona in Marketing is defined as an imaginative profile of the Ideal consumer of an
organization. Considering the fact that the Siemens Healthiness conduct Business to business
deal, in the following table, a persona of Mr. M, the operational manager of XYZ organization
has been conducted (Eftekhari & Bogers, 2015).
Background
 Operational Manager of the XYZ
organization
 Working at the XYZ organization for
more than 10 years
 Married with 1 offspring
Demographics
 Male
 Age: 30-45 years
 Dual HH income: 140,000 dollards
 Suburban
Roles
 To manage the organizational issues
associated with production
 To conduct business deals
 To analyse the market in order to
understand both internal as well as
external environment.
Goals
 To select suitable suppliers for the
XYZ healthcare home.
 Enhance the revenue of the company.
 Enhance the consumer loyalty.

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2.5 10 Customers:
The chief 10 customer organization types of the Siemens Healthiness are as follows:
1. Government hospital
2. Private nursing homes
3. Non-Government organizations
4. Pathology laboratories
5. Medical research institutes
6. Rehabilitation centers
7. Vet nary health care homes
8. Distributing Networks
9. Sports organization
10. Paramedics

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Contact with Consumers
rom home country will enhance the investment cost of the organization. The second major issue faced by the organization
n the other hand, importing product from home country will enhance the investment cost of the organization. The second major
On the other hand, importing product from home country will enhance the investment cost of the organization. The second majo
ing product from home country will enhance the investment cost of the organization. The second major issue faced by the organ
ing product from home country will enhance the investment cost of the organization. The second major issue faced by the organ
ill enhance the investment cost of the organization. The second major issue faced by the organization includes lack of transporta
3 VALUE CREATION
3.1 Use Case:
3.2 Product Description:
The organization chiefly manufactures healthcare equipments that are required for
treating patients in the healthcare organizations. In this case the chief imaging products
manufactured by the organization will be:
 Advanced Imaging Angiography
 MRI
 Sliding Gantry CT
 X-Ray Machines
 Dedicated Cardiac System
 Stratus CS 200 Acute Care Diagnostic System
 Stratus CS Acute Care Diagnostic System