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XJTLU Entrepreneur College (Taicang)

Module Code and Title ENT302TC Cutting-edge Practice in Innovation and Entrepreneurship
School Title Entrepreneurialism BSc Intelligent Supply Chain with Contemporary Entrepr

Assignment Title Case Study

Submission Deadline Week 13 December 15th (Friday) at 11:59 PM (Beijing
Standard Time).
Final Word Count 1488(NOT including references and appendix)
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Student ID 2034665
Final Word Count
1488(NOT including references and appendix)

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 ENT302TC Coursework

Student Name: Tianqi.Liu

Student ID: 2034665

Group No.: 58

Lab Group No.: 05

Company Name in the Lab Group: ZA_TUM

Market Research Progress Report
1.Research methodology

In the current landscape, characterized by a sustained increase in demand for blood glucose

monitoring tools, Continuous Glucose Monitoring (CGM) has emerged as a pivotal technology

garnering considerable scholarly attention. This study is designed to undertake a meticulous

examination of the prospective clientele and future industry trend of CGM systems, employing

a synergistic approach that combines in-depth interviews with an analysis of secondary data.

The primary goal is to refine the operational quality of products, thereby enhancing prospective

customer satisfaction.

It is imperative to underscore that, owing to the requisite medical acumen inherent in blood

glucose monitoring, the study's participants encompass not only individuals representing

diverse diabetes types (Type 1, Type 2, gestational) but also healthcare professionals

responsible for the holistic care of these patients. Through the avenue of in-depth interviews,

the aim is to comprehensively fathom the experiences, requisites, and challenges encountered

by both patients and healthcare professionals in practical usage scenarios.

This comprehensive methodological approach is poised to yield nuanced insights into the

intricate demands imposed on CGM systems, furnishing substantial guidance for the

refinement and optimization of these systems in the future. Through this research endeavor,

the aspiration is to propel the evolution of CGM technology, offering more tailored and reliable

blood glucose monitoring solutions that better cater to the needs of individuals contending with

diabetes and their healthcare custodians.

2.Background: Rising demand for blood glucose monitoring

Diabetes, an incurable chronic condition requiring prolonged monitoring, affects a substantial

global patient population. According to the 2021 Global Diabetes Report by the International

Diabetes Federation (IDF), the diabetic adult population (20-79 years) reached 537 million in
2021 and is projected to rise to 783 million by 2045. Notably, China leads with 141 million

adult diabetic patients, constituting 26% of the global diabetic population, and is expected to

reach 174 million by 2045.

Figure 1 Data source: IDF (including predictions), Note: Due to statistical difficulties in patients in some age

groups, IDF only uses adult patients aged 20-79 as statistical objects.

The World Health Organization (WHO) advocates for active diabetic patient involvement in

self-monitoring blood sugar levels, facilitating real-time insulin adjustments based on

individualized readings. This approach significantly contributes to effective diabetes

management and complication mitigation, emphasizing the critical need for dedicated tools for

blood glucose monitoring. With the escalating diabetic patient numbers, the market demand

for advanced blood glucose monitoring tools is expected to persistently increase in the

foreseeable future.
3. Analysis of potential customers' needs

To investigate the pain points associated with traditional blood glucose monitoring and enhance

the adaptability of continuous glucose monitoring (CGM) systems, a qualitative study targeting

both patients and healthcare professionals has been conducted. The study has unveiled

challenges related to the utilization of conventional blood glucose monitoring tools.

Figure 2 Data source: Qualitative interviews, including 5 doctors and 20 patients with diabetes.

In certain aspects, the difficulties articulated by patients align with perspectives from healthcare

professionals. For patients, inconvenient monitoring processes and the experience of pain and

discomfort emerged as prominent issues, with difficulty ratings of 66% & 50%. This suggests

that the current methods of blood glucose monitoring may pose impediments to individuals

adhering to their monitoring regimens. This observation substantiates the concern raised by

healthcare professionals regarding low patient compliance (66%).

A noteworthy concern for patients was the inability to receive medical reminders, indicating a

high difficulty rating of 89%. This underscores a significant deficiency in existing monitoring

systems. Traditional systems, limited to numerical displays, fail to provide scientifically

informed judgments, corroborating the concern expressed by healthcare professionals

regarding the difficulty in handling emergency situations (80%).

In the realm of healthcare professionals, a high level of attention was directed towards the

inaccuracy of discontinuous data, yielding a difficulty rating of 92%. This highlights a critical
issue in relying on data that may not offer a comprehensive depiction of patients' blood glucose

trends, potentially influencing treatment decisions.

Based on insights gathered from patients and healthcare professionals, the need to build new

CGM systems with the user at the center is highlighted. As a next step, the research aims to

delve more deeply into the pain points faced by glucose monitoring users by building empathy

maps. Enrich understanding of user experience and needs to inform the refinement and

development of more effective monitoring solutions.

Table 1:Empathy map

Through in-depth qualitative interviews and the creation of empathy maps, we have identified

key pain points experienced by blood glucose monitoring users. These pain points revolve

around the inconveniences associated with traditional monitoring methods, inaccuracies in data

collection, and the lack of comprehensive information provided. To address these critical

challenges, Continuous Glucose Monitoring (CGM) systems emerge as a promising solution.

 Table 2:Pains & Gains

Based on the insights derived from the empathy maps, identifying common pain points among

users as shared needs, and aligning with the recommendations outlined in the American

Diabetes Association's (ADA) "Standards of Medical Care in Diabetes 2022" for Continuous

Glucose Monitoring (CGM) usage across various types of diabetes, it can articulate specific

user personas to address these nuanced requirements.

 Table 3:Persona description

4.Future industry trend

The continuous glucose monitoring (CGM) market is currently undergoing a period of robust

expansion. CIC Consulting data reveals a substantial growth trajectory, with the global CGM

market escalating from US$1.7 billion in 2015 to US$5.7 billion in 2020, reflecting an

impressive compound annual growth rate (CAGR) of 28.2%. This upward trend is anticipated

to persist as the incidence and treatment rates of diabetes progressively rise, consequently

propelling a synchronous surge in the demand for blood glucose monitoring.

 Figure 3:Data source: CIC, 2021 (including forecast)

Despite China ranking among the nations with the highest prevalence of diabetes worldwide,

its CGM market share remained modest at 2% in 2020, with a type I diabetes penetration rate

of merely 6.9% (CICC,2021). In comparison to statistics from the United States and the

European Union, China's market share is comparatively restrained. Nevertheless, with the

enhancement of residents' purchasing power, a surge in diabetic cases, and a shift in patient

perspectives regarding monitoring methodologies, the Chinese market is poised to emerge as a

pivotal arena for competition within the CGM industry, capitalizing on China's extensive

diabetic patient base.

Figure 4:Data source: CICC,2021

The prognostication from CITIC Securities serves to underscore this trajectory. Projections

indicate that by 2030, the CGM penetration rates for patients with type I and type II diabetes

in China will attain 38% and 13%, respectively. This prognostication signifies that as time

progresses, the demand for continuous glucose monitoring technology in the Chinese market

will experience a considerable upswing, providing a vast expanse for the development of the

CGM industry.

Figure 5:Data source: CITIC, 2022 (including forecast)

5.prototype design

https://video.xjtlu.edu.cn/Mediasite/Play/2d8267bd7f1943f59ef566e764d2d4311d
6.References

ADA (2022). 'Diabetes Medical Standards 2022'.Available at: https://diabetes.org/

CIC (2021). 'In-depth Research Report on CGM 2021'. Available

at:https://www.cninsights.com/html/about/15/

CICC (2021). 'CGM: Digital Revolution in the Era of Blood Glucose Health Management'.

Available at: https://research.cicc.com/frontend/recommend/detail?id=2114

CITIC Securities (2022). 'Special Report on the Continuous Blood Glucose Monitoring

Industry in the Pharmaceutical Industry 2022'. Available at: https://research.citics.com/home

IDF (2021). 'Global Diabetes Map 2021'. Available at: https://diabetesatlas.org/data/en/

Weitai Medical (2021). ‘IPO Prospectus 2021'. Available at:

https://www1.hkexnews.hk/listedco/listconews/sehk/2021/1006/2021100600008_c.pdf

WHO (2021). 'Global Diabetes Compact 2021'. Available at: https://www.who.int/zh/news-

room/fact-sheets/detail/diabetes
 Individual Reflection Report of Business
Simulation
1.Responsibilities and Strategic Decision-Making

In my capacity as the team's CEO, I bear the responsibility of not only leading the team but

also orchestrating the collaborative endeavors across various departments and formulating the

overarching strategy for the company. After the second round of market simulation, a pivotal

realization surfaced – most market participants were concentrating their efforts on mid- to high-

quality markets. In response to this market landscape, a strategic decision was made to opt for

a low-cost, high-quantity sales approach, strategically positioning us to distinguish ourselves

from the prevailing competition.

This strategic selection was not arbitrary; instead, it was underpinned by a comprehensive

analysis of the outcomes derived from the initial two rounds of test simulations. The rationale

behind this decision emanates from a discerning observation of prevalent market trends, where

competitors predominantly cater to mid-to-high quality product offerings. By embracing a

differentiation strategy centered on affordability, we adeptly carve out a niche, catering to the

needs of consumers seeking more budget-friendly options.

Figure 6：Resources quality(ROUNGD 2)

Throughout the process of strategy development, effective communication with the team

remained paramount. Ensuring that each team member comprehended and endorsed this

strategic direction was deemed crucial. Subsequently, team collaboration focused on

optimizing processes to achieve our goal of operating at the lowest cost. The ensuing

negotiation and decision-making processes were executed collaboratively to ensure alignment

with our overarching strategic vision. The specific execution process is shown below.

Figure 7:Work inflow

2.Goal Setting and Results Analysis

Embracing a low-cost strategy necessitates an expansion of our market share to elevate overall

revenue. The linchpin for attaining a substantial market share lies in fortifying our production

capacity. Acknowledging the urgency of responding promptly to market demands, I advocated,

at the conclusion of the fifth round, the acquisition of three additional workstations by the

finance and human resources departments. This strategic initiative is geared towards

augmenting our production capabilities to meet the anticipated surge in future demand.

Figure 8：Number of workstations(ROUND6)

Given the swift onboarding period of new employees, the proactive investment in additional

workstations represents a forward-thinking measure. Despite incurring short-term liabilities,

this strategic move aligns seamlessly with our overarching goal of securing market dominance

in the long run.

Our commitment to purchasing products at the most favorable prices and maintaining the

lowest market selling price, coupled with the proactive workstation investment, has propelled

the team to sustain a cumulative top-three ranking in the market until the twelfth round. This

strategic synergy demonstrates our ability to navigate the market intricacies effectively.

3.Critical Reflection

The adoption of a low-cost strategy has undeniably resulted in an expanded market share;

however, a discerning analysis reveals inherent drawbacks. The imperative to continually

reduce prices to sustain market share has proven detrimental to the company's profit margins.

Over the final three rounds, the average profit margin stagnated at 20%, a stark contrast to the

market leader, Alididi, boasting a robust 40% profit margin.

This downward trajectory in profit margins raises concerns, highlighting the inherent

vulnerability of a low-cost strategy. While successful in attracting a broader customer base, the

relentless pressure on pricing has eroded our profitability. Striking a delicate equilibrium

between affordability and profitability is imperative for sustained financial health.

The 20% average profit margin falls short of industry benchmarks, necessitating a reevaluation

of our pricing strategy. The challenge lies in finding a balance that ensures competitive pricing

while safeguarding profitability. The diminishing profit margins in the final three rounds

directly contributed to our declining rankings, underscoring the necessity for a nuanced

approach to pricing in future simulations. It also led me to an important conclusion. Business

logic does not have an unchanging strategy, but rather, we need to pay more attention to the

sustainable development of the business model.

Figure 9:Place in ranking