Read the Conversation
Meeting highlights:
- Samsung's Medical Equipment Division, established in 2013, is now the third-largest player in Italy's ultrasound market, with a ≥20% market share, competing with long-established companies with more market presence
- Italy is a key strategic market for Samsung due to its large volume in public healthcare, though it is complex due to strict regulations and significant public-private sector dynamics.
- Post-COVID, Italy has increased healthcare investments, presenting new opportunities for companies like Samsung, especially in early diagnostics and digital transformation.
- Samsung emphasizes digital transformation in healthcare, aiming to lead with integrated solutions like the "smart hospital" concept, leveraging its extensive portfolio across hardware, software, and medical devices.
- Building high-performing teams and focusing on human factors have been crucial to Samsung's success in Italy's medical device sector, highlighting the importance of people over technology in achieving market growth.
EF: What are your current priorities, and what challenges and opportunities are you facing this year?
DG: I have been managing Samsung's Medical Equipment Division since 2013, when Samsung decided to enter the healthcare sector focusing on medical devices. As you are aware, Samsung is primarily known for its consumer electronics, which make up the majority of the company's business.
The Medical Equipment Division is now an official part of Samsung Electronics, alongside Audio, Video, and Mobile divisions. Although we are currently the smallest in revenue, as the medical device market is much smaller than consumer electronics, this division represents a significant strategic investment for the future.
In 2013, Samsung adopted a new strategy, recognizing that the consumer electronics market is subject to varying dynamics and challenges year after year. To diversify and secure long-term growth, Samsung invested in the healthcare sector, specifically in medical devices and diagnostic imaging. We currently have three product lines, with our core business centered around ultrasound diagnostic imaging. Additionally, we offer products in digital radiology and recently mobile CT. This has been our focus since 2013, and it reflects our current position in the market.
In Italy, as in other countries, we initiated all operations from scratch because the division was entirely new. Starting from the ground up, we built the business activities with all essential functions integrated within the division, including business administration, sales operations, marketing operations, and service. This makes us the only Samsung division that has all business-related functions in-house. This structure is necessary because the medical business is fundamentally different from other sectors, requiring this level of differentiation.
We began in 2013 from zero because the business was minimal at that time. After years, we have made significant progress. Specifically, in the ultrasound systems market, we are now the third-largest player in Italy. We recently received market data confirming that we currently hold a ≥20% market share in ultrasound systems in Italy, which is an impressive achievement.
This is particularly notable compared to companies with long market presence compare with us. Some of these Companies have been in the market for over 35 years, establishing themself as a market leader. Achieving a position among the top three in just ten years is a testament to our success and determination. We are very satisfied with our results and market position, but we recognize that there is still significant room for growth. Thanks to Samsung's continuous introduction of new products, we have ongoing opportunities to expand.
Our ultimate goal is to become the market leader in market share. While I am still determining exactly how long this will take, I am confident that we can achieve this target by maintaining the same energy and commitment that we have shown so far.
EF: What is the strategic significance of the Italian market?
GD: In terms of volume, Italy is the third-largest medical devices market in Europe, following Germany and France. Italy's market is stagnant and continuously in crisis due to a spending review by the Government. This is a critical factor when discussing business and market share because our market growth depends directly on getting market share from our competitors and not from new market opportunities. Furthermore, Italy ranks as the third-largest market in the ultrasound sector, but it is notably more complex compared to other countries,
This complexity arises from the market structure, where approximately 60% to 65% is public, and the remaining 35% to 40% is private. The public sector, in particular, is challenging due to the numerous administrative rules and processes involved. This makes Italy a complex market to navigate, but it also serves as a reference point for stabilizing the business.
When a business in Italy becomes stable and achieves a certain market share, it indicates that the operational organization and strategy are likely on the right track for continued growth. This is one reason why Italy is such an important market in Europe, similar to France and Germany. The substantial market volume in these countries provides a significant opportunity for rapid growth, provided the right strategy is in place.
EF: Given Italy's aging population and mature market, healthcare demand is outpacing available resources. What steps is Samsung taking to contribute to building sustainable healthcare systems?
GD: This is a very important question because Italy’s healthcare system is unique from other countries. It operates on a universal model, assisting every citizen, whether Italian or not. This is crucial for ensuring that everyone has access to healthcare. However, it requires substantial resources to sustain such a system, which is why the market is often under financial strain.
In Italy, growing market share does not necessarily mean the market is expanding; rather, it often involves gaining a share from competitors. This differs from markets like Germany and France, where growth trends are more consistent. The aging population in Italy further complicates the situation, as it increases the demand for healthcare services, requiring more government investment. Early diagnostics play a critical role here, as identifying diseases early can save money on treatment and long-term care.
However, investment in healthcare is a recurring issue for Italian governments, with healthcare often targeted for budget cuts. The COVID-19 pandemic, despite its challenges, led to unprecedented investment in healthcare, resulting in significant technological advancements and better preparedness. Although Samsung did not significantly benefit from COVID-specific products, the pandemic created broader market opportunities.
As the market stabilizes post-COVID, the Italian government's increased focus on healthcare investment benefits the healthcare system and the population. This shift is crucial for ensuring the country is better prepared for future crises.
EF: What is Samsung's role in driving digital transformation in healthcare in Italy and how receptive the market is to these advancements?
GD: This is a crucial and strategic question because digital transformation is Samsung's top priority. As you know, Samsung is a leader in innovation across various consumer products, from TVs to phones, impacting our daily lives. The advanced level of innovation that Samsung has achieved is also being applied to the healthcare sector.
Samsung's current objective is to provide comprehensive solutions for digital transformation in healthcare, not just limited to medical devices but extending to concepts like the smart hospital. The smart hospital concept is highly innovative and represents the future of healthcare. However, we are less advanced in Italy than in countries like France or Germany. Italy needs to catch up in Europe due to economic challenges and the need to understand the concept of digital transformation.
While digital transformation is widely discussed, implementing it in practice, especially in projects like smart hospitals, faces many barriers. These include both financial constraints and a need for an understanding of the full benefits and processes involved in such projects. Transforming a hospital into a smart facility, where everything from patient admission to discharge is fully digitalized, is a complex task that requires significant investment and a clear understanding of the potential benefits.
In Italy, it may take some time for these benefits to be fully realized and accepted. However, Samsung views this as a strategic opportunity. In other countries, Samsung has already successfully implemented smart hospital projects by leveraging its comprehensive in-house capabilities in hardware, software, and solutions. This gives Samsung a significant competitive advantage over other companies, which often have to outsource solutions and integrate them later. Samsung’s ability to offer a fully integrated solution from within the company is a major strength.
We are closely monitoring the progress of digital transformation in Italy and are ready to act when large-scale projects are initiated. This is a key area for Samsung’s future development, even beyond medical devices, as part of our broader healthcare strategy.
EF: How does Samsung approach collaboration with different stakeholders?
GD: Currently, we are actively expanding our communication efforts across all levels to reach every stakeholder. In my specific area within the healthcare environment and in collaboration with other divisions, we are pursuing similar initiatives. At the corporate level, we are focused on spreading as much information as possible about digital transformation. This is a key topic being discussed extensively, even at the governmental level.
We aim to provide comprehensive information to highlight the technological benefits and generate interest in this ongoing process. We recognize that this transformation will take time, especially in different countries, but education is the crucial step right now. We need to communicate the benefits that can be gained from investing in technology and encourage everyone to embrace the wave of digital transformation. This process has already begun and is likely unstoppable—it is just a matter of time and understanding.
EF: Looking back on your journey from then to now, what are three key lessons you have learned as a leader while building a team from the ground up to its current success?
GD: The experiences we have gained throughout this journey have been incredibly significant. One of the most crucial aspects is the emphasis on people and the human factor. In this era of digitalization, it might seem contradictory to focus on people, but the technology level has become quite similar across companies. Most businesses can offer viable technological solutions, which means the real differentiator lies in the human element.
I have dedicated considerable effort to building the best team in terms of preparation, knowledge, and readiness to tackle challenges. From the beginning, we faced significant hurdles. Despite Samsung's strong brand recognition, we entered the medical device market as the underdogs. Initially, when we visited doctors, they were more interested in our latest TVs and phones than our medical devices, as Samsung was primarily known for consumer electronics.
Changing this perception has been challenging, but we have made substantial progress after 11 years of hard work. I have strongly focused on investing in the younger generation, who are highly motivated and eager to grow. While they may lack extensive experience, they can develop their skills within our organization, supported by seasoned professionals.
Our commitment to nurturing young talent is part of the long-term vision we established in 2013. Our strong team is a key reason for our success in Italy, where we now hold one of the highest market shares for Samsung Healthcare. This suggests that our strategic choices have been the right ones.
EF: What would you like to celebrate as achieved in the next five years?
GD: We have a clear vision for our future. There is significant room for growth, largely thanks to Samsung's ongoing investment and product offerings, which have created the foundation for our expansion. This growth is deeply rooted in the company's DNA. Over the last 20 years, Samsung has rapidly evolved in consumer electronics, and this momentum is crucial for us.
We aim to become the number one market share player within our sector. Whether that happens in five or less time remains uncertain, but I am confident that within the next period, we will celebrate achieving the top position in ultrasound, which remains our core business. While we may also expand into other areas in the future, our current focus is on strengthening our presence in ultrasound.
It is important to note that our product range is still relatively small compared to competitors like GE Philips and Siemens. They offer advanced diagnostic systems and large equipment like CT and MRI machines, which generate significant business that we currently do not capture. As I mentioned, Samsung's primary focus has traditionally been on consumer electronics. However, we are steadily increasing our investments and capabilities.
Samsung's substantial investment power is a significant advantage, but this growth will take time to happen. Our approach is long-term, and we are committed to achieving the same level of excellence in healthcare as our competitors. For now, we are concentrating on optimizing our existing product line to become the number one market leader.
EF: Is there any final message you would like to deliver?
GD: As Samsung, we recognize our significant responsibility toward both the environment, the scientific community and patients. Our mission has always been clear: while we strive to achieve business success and profitability, we must do so in a balanced and ethical manner. Our primary focus remains on delivering cutting-edge technology that supports and enhances people's lives, especially in the healthcare sector. This commitment to improving healthcare outcomes is at the core of our mission, separate from our business objectives.
