Business case and market entry strategy for digital health services expansion

Project background:

One of the top diabetes care market players considered expanding their digital service offering to diabetes prevention. In order to obtain a clear picture of the new market segment and better understand the opportunity size, the company approached R2G.
They wanted to find out:

  • What is the current and projected market size of the digital prediabetes segment in terms of addressable users, active users and revenues?
  • Who are the main market players, what factors drive their success and what are the main business models?
  • Which countries are the best for the market entry and what are the go-to-market options for each of them?
  • What costs and revenues can the company expect over the next 5 years if it introduces a digital prediabetes offering?
  • Why should or should not the company venture into prediabetes? What are the strategic implications of the potential expansion and what are the best implementation options?
  • What is the best market entry strategy?

What we did:

The in-depth market research was organized into 5 modules: global prediabetes market screening, a global survey on the digital preventive services, competition analysis, market opportunity, and, finally, market entry recommendations.

  1. Global prediabetes market screening. The thorough study of the digital prediabetes segment allowed to measure the market volume in terms of both service providers and users, identify the major trends shaping the segment, explore the existing service offerings and revenue streams.
  2. A global survey on digital preventive services. To validate the hypotheses about the prediabetes segment and explore the acceptance of digital preventive services in the market, R2G run a global survey and a series of interviews to collect opinions of over 200 digital health experts from the R2G Panel, including payer organizations’ representatives who shared insights regarding their willingness to work with digital prevention providers.
  3. Competition analysis. The second workstream focused on the most successful competitors in the digital prediabetes: it covered their digital product portfolios, pricing, business models and strategies. This information helped the client to align on their potential value proposition and strategic market positioning.
  4. Market opportunity. This part of the project explored which of the shortlisted countries offer the best conditions for a digital prediabetes service marketing, resulting in the selection of the top 4 countries for further market entry options investigation and more advanced market sizing.
  5. Market entry recommendations. The final workstream dealt with the development of the R2G’s recommendation to enter/not enter the digital prediabetes segment, explaining the required minimum viable product, potential market entry options and expected revenues/losses. The recommendations considered strategic arguments, the client’s core business and the business case comparing the costs of development and operation with potential revenue over the next 5 years in line with three scenarios of market growth (calculated for the country of the client’s choice).

Over the course of the project, R2G prepared and managed 3 workshops for the client company’s decision-makers and digital health team to present the core insights of the research and moderate a meaningful discussion.

On this project, R2G engaged 4 consultants. The project timeframe was 3 months.

Results:

R2G provided a clear recommendation on market entry and defined necessary steps for the USA and three other country markets.