Washtenaw County Chapter
AED and Training Services
Competitive Analysis
Final Report
December 2002
COMMUNITY CONSULTING CLUB
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AGENDA
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Executive Summary
Industry Mix
Market Segmentation
Overview of Washtenaw County Chapter
Competitive Analysis
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Cardiac Science (Survivalink), AED Manufacturer
Medtronic, AED Manufacturer
Zoll Medical Corporation, AED Manufacturer
AHA, AED Distributor and AED/First Aid Training Provider
National Safety Council, AED/First Aid Training Provider
Zee Medical, AED Distributor (restaurant and industrial)
Life Saving Resources, Inc., AED Distributor (water and public safety)
Huron Valley Ambulance, Ambulatory Services
Evaluating Partnerships
Next Steps
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Executive Summary
This study revealed six major competitors for the Chapter. The primary means to increase
the Chapter’s competitive position is through customer education.
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Three primary training competitors for the Washtenaw County Chapter were identified:
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Three primary AED competitors for the Washtenaw County Chapter were identified:
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American Heart Association
National Safety Council
Huron Valley Ambulance
Cardiac Science
Medtronic
Zoll Medical
In order to improve competitive standing, the Washtenaw County Chapter should
consider the following:
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Improving the customer education process (hidden costs associated with competitors)
Targeting subject matter experts that refer customers (doctors, OSHA, police officers, insurance, etc.)
Ensuring alliance with AED manufacturer is designed to support the Chapter in its pursuit to place
AEDs in the commercial market
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Industry Mix
The Chapter has a unique position combining service and equipment; however, to
become more competitive, the Chapter will need to increase its positioning in equipment.
NSC
Chapter
AHA
HVA
Service and
Training
Lifesaving
Zee Medical
Zoll Medical
Medtronic
Equipment
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Market Segmentation
Virtually all customer segments are being served by one or more competitors. The AED
market is growing 30% a year; the training market is continually gaining new entrants.
Large
Corps.
Small
Bus.
Educ./
Gov't
Healthcare
Airports/A
irlines
Public
Safety
Special
Events
Recreational
AED Trng AED Trng AED Trng AED Trng AED Trng AED Trng AED Trng AED Trng
Households
AED Trng
American Heart Assoc.
American Red Cross
Cardiac Science
Huron Valley Ambulance
Life Saving Resources
Medtronic
National Safety Council
Zee Medical
Zoll Medical
AED Industry
Training Industry
•The 2002 worldwide AED market is estimated
between $150-170 M.
•Training is a fairly easy market to enter.
•AED technological developments make training
less important. Mean defibrillator time for trained
technicians is 67 seconds; for untrained 6th graders,
90 seconds.
•Approximately 70,000 AEDs will be sold in 2002,
85% will be sold in the US.
•Four companies represent the majority of AED
sales: Medtronic, Philips, Cardiac Science, and Zoll
Medical
•Good Samaritan law increases the likelihood of
non-trained AED users.
•Currently, only 5% of police vehicles, 25% of fire
vehicles and 1% of corporations have AEDs.
Legend
•AED market is growing at 30% a year
Targeted Customers
Minimal to Zero Focus on Customers
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Washtenaw County Chapter of the American Red Cross
The Washtenaw County Chapter of the American Red Cross has strong community
recognition; however, AED penetration in the corporate market is relatively low.
Company Description: Local chapter of internationally recognized non-profit organization. The
Health and Safety division provides first aid, CPR and lifeguard training and AED placement.
Strengths
Weaknesses
Community presence; Chapter #1 in
outreach, and #3 in AED sales.
Organization and accessibility of customer
and sales data.
Range and reputation of first aid training
programs; reference point for public.
Control of certified trainers; model subject to
competition for same customers.
Ability to cross-sell products and services:
first aid and CPR classes with AEDs.
Potential difficulties in educating customers of
competition’s hidden costs and overall value of
Chapter’s product and service offerings.
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Target Market: Large corporations, medical facilities, indoor and outdoor recreational areas.
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Potential Threats: AED manufacturers and other organizations offering comparable devices
and training programs.
Chapter has access and appeal to untapped market. Opportunity to establish new, or
strengthen existing, alliances with AED manufacturers.
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Cardiac Science (Survivalink)
Cardiac Science is the third largest in AED sales. However, to-date the company is
unprofitable.
Company Description: Cardiac Science develops defibrillators and disposable electrodes that
monitor and treat patients with life-threatening heart rhythms.
Strengths
Weaknesses
Fast-growing manufacturer; grew over 780%
over the last five years.
Limited products and services; company only
focuses on AEDs.
Advanced, patented technology.
Restricted environments; Powerheart AED
only approved for medically supervised
environments.
Scientific, professional image.
Small player; competes against much larger
companies like Medtronic.
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Target Market: Public access, hospitals, corporations, educational institutions, hotel and
leisure industry, law enforcement, and Fire Department/EMS applications.
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Potential Threats: Changing FDA regulations, specifically with respect to AED home use,
would pose a large threat to Cardiac Science, which is entirely dependent on how the FDA
receives the Powerheart AED.
Cardiac Science’s long-term growth strategies are ambiguous. Will they focus on medical
channels or try to expand into the Chapter’s client territory?
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Medtronic
Medtronic is a world-renowned leader in cardiac rhythm management, #1 in AED sales;
however, allocation of sales force in Michigan seems relatively weak.
Company Description: Manufactures, sells and services AEDs. Positioned as the company to
provide the “total solution.”
Strengths
Weaknesses
Global leader; occupies #1 spot with over
350,000 LifePak AEDs distributed worldwide.
Small sales force; only two Medtronic sales
representatives cover the state of Michigan.
Strong partnerships; offers company-wide
programs with LifeLinkMD and NSC.
Lack of training program; customers receive
“EduCredits” for CPR and first aid training.
Cardiac medical device leader; provides a
wide array of cardiac medical devices,
accounting for 46% of overall sales.
Lack experience in commercial market; rely on
four distributor partnerships to sell to Michigan’s
commercial customers.
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Target Market: Hospitals, emergency response and commercial businesses.
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Potential Threats: With distribution relatively weak in the commercial market, Medtronic
may loose market share to other manufacturers dedicated to the commercial market.
A key opportunity exists for Medtronic and Red Cross to form an alliance. Medtronic can
provide AEDs to Red Cross at a discount; Red Cross can provide the sales force or
training services in the commercial market.
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Zoll Medical
Zoll Medical focuses on the production and distribution of resuscitation equipment
including its first AED unit released this year; however, it lacks training offerings.
Company Description: Designs, manufactures and markets a full line of cardiac resuscitation
devices, disposable electrodes, mobile ECG systems, and EMS data management solutions.
Mainly focuses on health care professionals to provide both pacing and defibrillation.
Strengths
Weaknesses
Large company: 524 employees.
New to AED market; first product came out in
2002.
Has established distribution system and sales
force.
Only one AED product to-date (Zoll AED
Plus).
Strong international sales (e.g., German
Army, Australian organizations).
Does not currently offer AED training, but
refers customers to the AED Instructors
Foundation.
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Target Market: Zoll Medical targets a wide customer base, and has experience selling to fire
and police departments. Zoll plans to increase its direct sales force to promote its product in
addition to leveraging its current distribution channels and website.
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Potential Threats: Zoll Medical is a late entrant to the AED market and may be severely
disadvantaged by the significant momentum that its competitors already have.
Zoll has a strong reputation in the defibrillator market and poses a significant threat to the
Chapter because of its expanding sales force; however, Zoll still lacks training
component.
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American Heart Association
The AHA is the industry leader in cardiac management research and guidelines. However,
customers are indifferent to receiving training from the AHA or the Red Cross.
Company Description: The American Heart Association is a national voluntary health agency. It
provides CPR/AED training through a network of independent Community Training Centers. AHA
does not sell or endorse any medical equipment, but the local training center in Ann Arbor, Life
Support Services, Inc., sells AEDs as a secondary business.
Strengths
Weaknesses
Leader in setting standards; competitors use
its national guideline as reference.
Smaller scope; focus on heart disease only.
Broad network of training centers (147 in
Michigan).
Brand confusion; customers confuse AHA
with Red Cross.
Independence; AHA does not sell, distribute
or endorse any AED products.
Limited staff; one person covering marketing
in Michigan.
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Target Market: Primarily focuses on Emergency Response; the AHA also targets public
venues and businesses (Fortune 500 companies).
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Potential Threats: Increasing competition as more organizations are entering this market.
AHA, with its local training center, has become an indirect competitor for AED sales.
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National Safety Council
The National Safety Council provides extensive training services to its members, but
must also rely on certified centers to meet its mission.
Company Description: Non-profit with mission “to educate and influence society to adopt
safety, health and environmental policies, practices and procedures that prevent and mitigate
human suffering and economic losses arising from preventable causes.”
Strengths
Weaknesses
Large customer network; access to over
37,500 members employing 30M persons.
Breadth of mission may be limiting; unknown
customer value of training.
Extensive training reach; accomplished
through certification of training centers (Huron
Valley Ambulance).
Lack of AEDs; does not sell AEDs at this time,
but does offer training.
Large online product selection; products
oriented to workplace, home, and environment
of first aid and safety products.
Located outside Ann Arbor; closest chapters
in Lansing and Southfield.
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Target Market: Offices, homes, community centers and environmental organizations.
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Potential Threats: Organizations offering both AED units and related training.
Members cannot purchase an AED directly from the National Safety Council. However,
AEDs may be available for sale through certified training centers.
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Zee Medical
Zee Medical is a subsidiary of McKesson Corporation, a Fortune 35 company, but the
local affiliate does not appear to be a major force in Ann Arbor.
Company Description: Van-based provider of occupational first-aid and safety products,
training and services.
Strengths
Weaknesses
Extensive online catalog; 19 product
categories and direct ordering capabilities.
Potential credibility issues of for-profit in AED
sales and service market.
Dedicated sales teams; national account
service for businesses with multiple locations.
Not cost-effective for smaller businesses or
those with less frequent restocking needs.
Confidential evaluations of workplace first aid
and safety procedures.
Low penetration in local market.
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Target Market: Restaurants, hotels, manufacturing plants, construction sites and companies
with multiple office locations.
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Potential Threats: Better perceived value of non-profits selling AEDs and first aid training.
Products and services appeal to companies with multiple locations and those in need of
standardized safety procedures and routine restocking of first aid products due to nature
of operations.
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Life Saving Resources, Inc.
Life Saving Resources, Inc. focuses primarily on providing safety training and products
for the water and ice rescue market.
Company Description: Lifesaving Resources, Inc. is a private corporation providing training,
consulting services and equipment for the fields of aquatics safety, water rescue, and ice rescue.
Strengths
Weaknesses
Full range of water/ice rescue products, low
AED price (ACCESS from $1295, ZOLL from
$2119).
Small business (<5 people, <$500,000 sales)
located in New Hampshire.
Focus and specialization; considered AED
provider of choice in water and ice rescue
market.
Low recognition outside areas of aquatics
safety, water rescue, and ice rescue fields.
Award-winning website and customized
training program.
Low training coverage in Michigan
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Target Market: Public safety and rescue, aquatic recreation.
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Potential Threats: Not significant.
Because of its size and location, Life Saving Resources, Inc. is not a significant
competitor to the Chapter.
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Huron Valley Ambulance
Huron Valley Ambulance is dedicated to providing medical transport and other training
services; however, it is limited in its ability to partner with suppliers and customers.
Company Description: Emergency paramedic and transport for 675,000 local residents and
transport services to other urgent care facilities. Offers paramedic-based call centers and
outbound disease management. HVA provides EMS education services in three counties.
Strengths
Weaknesses
Large force of ambulances (about 65).
Specialized in mobile services, not AED
sales.
Strong relationships with 17 local hospitals,
26 nursing facilities, and other urgent care
services.
Local presence only.
Offers 6 types of training including CPR and
other high-end EMS training.
Weak customer awareness.
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Target Market: Hospitals, education institutions and households.
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Potential Threats: With increasing competition and because HVA is a small, local,
specialized organization with low customer awareness, it will have difficulty distributing AEDs
to a large portion of the AED market.
Huron Valley Ambulance has a local monopoly in emergency medical transport. It can
compete with the Chapter on training and has a potential distribution channel into
households and hospitals.
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Evaluating Partnerships
The chapter needs to evaluate partnership opportunities, paying specific attention to
market prospects and synergies.
Medtronic
Philips
Red Cross
Medical
X
Commercial
X
Education/
Government
?
? X
Household
X
Why a Partnership?
 Marketing - Distribution - Service
synergy
 Favorable price
 Technical and informational support
 Exclusivity in local market
 Bundled sales opportunity
Issues to Consider
 What value-added does AED/Red
Cross have to consumer?
 What is the relative size of potential
consumer markets?
 What are the costs and benefits of
each market?
 Are there legal restrictions in the
market?
 How attractive is each market
segment? (i.e., is there a relative lack
of competition in a segment?)
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Next Steps
Developing the appropriate market approach can be accomplished in five phases. This
study has completed phase one.
2
1
Market
Analysis
3
Consider
Options
•Customer
•New market?
•Competitor
•New partnership?
•Company
•Expansion of
product/service?
•Context
•Dropping
product/service?
4
Development
and Testing
•Concept testing
(surveys, focus
groups, etc.)
5
Budgeting and
Planning
Execution
•Setting objectives
•Monitoring
•Budgeting
•Plan revision
•Develop detailed
marketing plan
•Test marketing
Immediate Next Steps
 Survey non-customers to understand areas of improvement in the AED marketing and
selling process.
 Analyze benefits and costs of Philips alliance; compare with proposed Medtronic alliance.
 Determine marketing approach, based on competitive and market research findings.
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