Blog | 3/26/2019

Planning for Competition in Launch Strategy

By Health Advances Launch Excellence Team:

Mike Davitian, Director; Remy Denzler, Senior Analyst; Haley Fitzpatrick, Consultant; Grace Perkins, Senior Analyst; Tara Breton, Research Services Manager; Vivek Mittal, Partner; and Dean Giovanniello, Vice President

In a previous white paper (“Launch Excellence: Once in a Life Cycle Opportunity”), we highlighted that successful launches are underpinned by strategies and tactics that reflect and leverage the unique market and competitive circumstances facing a product. Here, we examine how various competitive environments affect launch strategy and tactics.

Competition is a key factor affecting launch success, and effective launch strategies will enable a product to stake out a meaningful competitive position. However, competitive environments are highly variable and require rigorous analysis and custom-built strategies to position a product effectively in its market.

In developing an effective launch strategy that reflects the competitive environments, we find it useful to consider the intensity and the homogeneity/heterogeneity of the competition. Intensity is the degree to which competitors (whether one or many) are viable threats. In low intensity environments, competitors are non-existent or otherwise pose minimal risk because they have an inferior product. Conversely, high intensity environments are those in which competitors are compelling alternatives. Homogeneity is the degree to which competitors are similar and/or the magnitude of the trade-offs between competitors. Where competitors are homogeneous, treatment alternatives are similar (e.g., ‘me-too’ drugs in the same class). Heterogeneous competitors are dissimilar – but not necessarily worse – and therefore present customers with significant trade-offs (e.g., procedure-based treatment vs. drug-based treatment).

Competitive intensity affects the degree to which a launch team will focus on market share vs. market expansion. In low intensity environments, launch teams can focus on market expanding activities that increase access to the addressable patient population (e.g., disease awareness campaigns). In high intensity environments, launch teams must focus on activities that increase market share relative to their competitors (e.g., development of differentiated delivery devices).

Homogeneity affects the value proposition and the approach to product positioning. In homogenous environments (e.g., competition among me-too drugs in the same class), the unmet need addressed – and differentiation offered – by a new product may be unclear. Here, launch teams must educate customers on the nuanced differentiation offered by the product. For example, launch teams may need to convince physicians that a product’s added convenience is meaningful because it leads to greater compliance, which leads to better efficacy. The challenge of positioning a product within a heterogeneous competitive context (e.g., a new medical treatment for an indication typically treated surgically) is different: its differentiation is more straightforward, but the role of the new therapy in the treatment paradigm may not be. Here, the disruption to the treatment paradigm is more significant, and customers are faced with larger trade-offs and greater complexity. Therefore, launch teams must focus on accelerating favorable changes in the broader diagnostic and treatment paradigm that will guide customers to the product.

The broader strategic implications of competitive intensity and homogeneity also affect tactical efforts. The table below details four competitive environments based on these variables.

In conclusion, competitive environments are diverse, creating complex strategic and tactical considerations for new therapeutics. Here, we tried to provide launch teams with a useful heuristic that provides clear strategic and tactical implications: Competitive intensity affects the extent to which launch teams should focus on strategies and tactics aimed at expanding the market or gaining market share, while homogeneity affects product positioning. However, competition creates additional complexities that we have not addressed. For starters, intensity and homogeneity are only two competitive attributes launch teams could consider. Depending on the context, other attributes may be more useful. A robust launch strategy will breakdown competitors according to attributes that are carefully selected to enable strategic and tactical decision-making. Secondly, competitive environments typically feature a diversity of competitors, each with its own intensity and homogeneity level. Launch strategies must navigate this complexity by clearly positioning a product in a diverse environment while also enabling meaningful differentiation relative to individual competitors. Finally, we note that the binary categorization of low/high intensity and homo-/heterogeneity shown here may not be sufficient for many competitive environments. Launch teams should stratify competition to the extent that such stratification reveals strategic insights. That is, each stratum should have a clear implication for launch strategy and tactics.

Thus, we close by emphasizing that this blog is intended as a stimulus for launch teams. Competitive intensity and homo-/heterogeneity are ideal starting points, but they are unlikely to be the complete picture.

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