In year 2000, GE was the 4th biggest player in the medical ultrasound market, with only 11% market share. In the same year Siemens acquired Acuson and became the biggest player in the ultrasound market with roughly 20% market share (followed by Philips with 18% market share, and HP with 16% market share).
Fast forward to today, GE is a clear market leader with over 30% market share. That is roughly 10x revenue growth in its ultrasound business. Meanwhile, Siemens has dropped from rank 1st to rank 6th and even considered exiting.
In my previous article I talked about GE’s unique philosophy toward acquisition and business development and how it helped them become market leader. But there are other reasons that helped GE with their rise to stardom.
When it came to selecting a leader for their ultrasound business, GE also adhered to the following two principles:
GE highly valued business continuity. Historically, average tenure for CEO of Ultrasound at GE healthcare has been around 13 years. This was done intentionally to maintain a continuity in the direction of the business, so the organization can continue to function with as little disruption as possible.
On the other hand, the average tenure for CEO of Ultrasound at Siemens has only been 3 years. But change in leadership usually translates to change in the direction of the business. When change is too fast or even constant, it makes it harder for the business to focus on any long-term strategy or goal.
GE always made sure that the leader of their ultrasound business possessed significant ultrasound domain expertise, backed by years of ultrasound industry experience. GE believed leaders with domain-specific knowledge were better positioned to create value and achieve successful outcomes.
In contrast, Siemens appointed leaders for their ultrasound business with varying background. Very often, CEO of ultrasound at Siemens came from CT and MRI business, where Siemens has done very well, or other broader Medical Device industry.
Looking back, it is evident that following these principles gave GE an edge and contributed to their rise to becoming industry leader. Having said that, by no means the current standing in ultrasound market is set in stone for either GE or Siemens. Both companies have recently appointed new leaders for their ultrasound business. Time will tell what the future holds for GE and Siemens in the realm of medical ultrasound.
*This article mainly focuses on the ultrasound business where GE has outperformed Siemens. However, if one looks at MRI and CT markets, Siemens emerges as the dominant force. One must also look at MRI and CT markets to see what factors contributed to Siemens’ success.