How Lake Region Medical achieved 35% annual growth in China without setting up a local entity

The Situation

Having faced challenges trying to manage its own staff in China remotely, Lake Region Medical used Tractus’ Business Inc.ubator^® as a cost effective and low risk way of re-entering the China market.

• Since 1960, Lake Region Medical has become the world’s largest OEM and contract manufacturer of wire formed medical devices (guide wires) and components and devices for minimally invasive cardio-, endo- and neurovascular use.
• Lake Region Medical has a range of 510(k) registered OEM delivery and vascular access products as well as several coating and material enhancement options that set it apart from its competitors.
• From concept development, to prototyping, to scale-up manufacturing and dock-to-stock supply chain management, Lake Region Medical provides a wide range of outsourcing solutions.
• Having faced challenges trying to manage its own China sales staff remotely from its headquarters in the US, Lake Region Medical executives decided to use Tractus’ business Inc.ubator^® as a cost effective and low risk way of re-entering the China market, expected to become the world’s largest market for its products.

The Project

Utilizing Tractus’ Business Inc.ubator^® solution provided Lake Region Medical with an on-the-ground presence and dedicated staff with close senior management oversight, without having to establish its own China legal entity

• Since 2006, Tractus has provided a wide range of market entry services through our innovative Business Inc.ubator^®, allowing Lake Region Medical to have an on-the-ground China business presence without having to establish its own China legal entity. Business Inc.ubator^® services included:
  • market entry strategy assistance;
  • a legal entity through which Lake Region Medical employed a dedicated Sales Director and a Customer Sales Representative;
  • office space;
  • back-office support (bookkeeping, cashier, administration and payroll), and;
  • senior management oversight in China.
• More importantly, Business Inc.ubator^® services included crucial oversight of Lake Region Medical’s sales team by Tractus’ senior Managers and Directors, ensuring they stayed focused on achieving their aggressive sales and marketing goals.
• Over the years Tractus has provided advice, assistance and oversight of Lake Region Medical’s business development activities to market and sell into China’s medical device market, including:
  • applying for Sino Food and Drug Administration (SFDA) approvals for its medical device products;
  • establishing a Foreign-Invested Commercial Enterprise (FICE);
  • FICE commercial support and administration;
  • office space and SFDA approved warehousing;
  • recruiting and hiring;
  • management oversight & guidance, and;
  • back office support (including accounting, cashier, book keeping and payroll).

The Solution

Utilizing Tractus’ Business Inc.ubator^® resulted in over 35% compound annual growth over the last 10 years and a market leading position supplying guide wires into China’s medical device market.

• When Lake Region Medical first entered the China market, they could only sell their low-value guide wires based on cost.
• Due to a well-managed China business development presence that focused on developing a good understanding of its current and potential customers’ needs and strong after-sales service, Lake Region Medical now sells high-value guide wires to repeat customers and has developed an enviable market share.
• Compounded annual sales growth (CAGR) has averaged 35% over the last 10 years.

Note: In 2015 Lake Region Medical was acquired for US$1.73 billion along with several other device manufacturers and is now a part of Integer (ITGR – NYSE), a global leader in the design and development of medical devices and power solutions for the medical and non-medical markets