robbie_magacine_20100510

Newsletter 2nd Edition

The Newsletter of Microlife Family

Microlife is on the road to the top Microlife regional story Microlife in Mexico

Professional Business MiMHS JP is established in 2010

Consumer business

Microlife China•Microlife USA

Energy saving business

New manufacturing facility in the Philippines

What’s new

HR program•Web2

Microlife Global

Founder KY Lin

Chief Editor Victoria Yang

Contributing Writers

Johnson Tang Jose Vargas Lisette Figueroa Mark Boufford Mark Porter Mervi Pinson Victoria Yang White Bai

Newsletter Apr. 2010

CONTENT

Art & Design Robbie Ku

Microlife Global Newsletter May. 2010

The Newsletter of Microlife Family

Microlife Global

Cover Story Microlife is climbing to the top- under intensive preparation for the quantum jump by 2012.

You are one of the builders to make this quantum jump happen. What challenges are coming up?

Are you ready for the changes?

Microlife is on the road to the top Microlife regional story Microlife in Mexico

Professional Business MiMHS JP is established in 2010

Consumer business

Microlife China•Microlife USA

Energy saving business

New manufacturing facility in the Philippines

What’s new

HR program•Web2

01 02 03

Regional Story

07 08

Energy Saving Business

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What’s New

Microlife in Mexico

Professional Medical Product Business Microlife Medical Home Solutions in Japan

Consumer Medical Product Business

Microlife USA awarded CVS Private Label- blood pressure monitor line Microlife China sales division aggressively acquires market share

Biddeford Subic Corporation in the Philippines.

HR Program

Competence workshop Action communication workshop Leadership communication workshop Be green, go Vegan Web2

Regional Story Microlife in Mexico

Regional Story

Microlife in Mexico Reported by Liliana Marriaga, Mervi Pinson

From left to right: Juan Benitez, Andres Gomez, Liliana Marriaga (MSA), Claudia Hernandez, Juventino Pineda (GM of Anapi)

Mexico has a population 111 million (July 2009 est.); the country’s population ranks 12th in the world. Mexico is composed of thirty one republican federation states. The country total area is 1,972.550 square kilometers. The capital Mexico City with an estimated 22 million people is located in the south-central part of the country.

Mexico is an attractive market to many medical device manufacturers. It has a free market economy, which is considered the 12th largest economy worldwide. In 2008, medical devices imported in the country were valued at US$3.1 billion. From 2006-2008 there has been an annual increase of approximately 11%.

The regulatory process for medical devices in Mexico may take from eight months to a year for new product or model registration. This is due to high volume of submissions, a shortage in the number of staff reviewing submissions as well as a strict regulatory system to protect humans, animals, plant, health and the environment.

The current healthcare system in Mexico is a combination of public and private programs. The country spends 6.6 % of its GDP on health care.

There are six governmental-run social security institutions that provide care for approximately 50 million of Mexico’s gainfully employed. The IMSS (Mexican Social Security Institute) health care program is a tripartite system funded equally by private employees, private employers and the federal government.

The uninsured poor, comprised of about 40 million persons, receive limited health care benefits administered by the Health Secretary.

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Newsletter Apr. 2010

The private sector, which represents about 3 million Mexicans, is compromised of individuals whose health-care funding is met through private insurance carriers. Also, many people with social security health care prefer using the medical services of private sector and paying out-of-pocket for private care.

Our distributor, Comercializadora Anapi is located in Mexico City. They have been our exclusive ML distributor since 2007.

The company has sales team to cover different territories; north, central, southeast and west of Mexico. Although fairly new and still growing company, Anapi has done a great job promoting and distributing Microlife in Mexico. They sell our CMP through various distribution channels; pharmacy chains, retail, medical equipment stores, and to hospitals.

Microlife is slowly becoming well known in Mexico, competing with Omron, Beurer, Braun, Citizen, Sunshine, Homedics and many others. In September 09 we got great advertisement as the prestigious national health magazine “The Consumer Magazine” published a report of various wrist type BPs: our BPW100 was on second place, given the highest rate of excellence and accuracy comparing with other twelve brands in the Mexican market.

At the moment our best sellers in Mexico are BPW100, BPA100, FR1DM1, MT200 and we can find them at Costco (33 stores) in all Mexico, Sanborns ( 72 stores in Mexico City), Commercial Mexicana (297 stores) and in 400 medical equipment stores in the country.

We look forward to ongoing growth and success in Mexican market with Anapi!

Professional Business Spotlight on Microlife Medical Home Solutions Japan Co., Ltd.

Professional Business

Spotlight on

Microlife Medical Home Solutions Japan Co., Ltd. Narrated by Koichi Haraikawa, reported by Victoria Yang

On 1st April 2010, Microlife Corporation established Microlife Medical Home Solutions Japan Co., Ltd. in Tokyo.

In Japan there are 100,000 clinics, which MiMHS JP is aggressively targeting on to promote medical home concept with WatchBP solutions. In Japan, instead of accessing to Internet for data transmission, most of the Japanese people prefer simple data transmission via just ONE click. In order to localize WatchBP solution to meet Japanese market needs, MiMHS JP developed PHS box which can be connected to WatchBP Home device and transmit BP measurement data to central database with ONE click on the PHS box at patients’ home

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Newsletter Apr. 2010

environment. With this approach, patients’ home environment can be viewed as a virtual sickroom where patients themselves can directly send BP measurement data to their doctors for treatment follow-up. Now not only targeting on selling WatchBP solutions to the clinics, MiMHS JP is targeting on pharmaceutical companies and research labs.

MiMHS JP is going to promote WatchBP O3 device into doctor office after the regulation obtained in this year.

Consumer Medical Product Business Microlife USA awarded CVS Private Label- blood pressure monitor line Microlife China sales division aggressively acquires market share

Consumer Medical Products Business

Microlife USA

Awarded CVS Private Label Blood Pressure Monitor Line Reported by Mark Boufford

BP3MY1

Microlife USA was recently awarded the CVS private label blood pressure monitor line, totaling 6 SKU’s and estimated to drive 8 million USD in revenue.

This success was the result of 18 months of innovative product design, superior customer and consumer insights and adherence to the philosophy of “customer intimacy.”

Over the last five years, the blood pressure market in the United States has been increasingly shifting to private label programs and MLU has embraced this shift, rather than fight it as our competitors have done. This was a critical step in obtaining the CVS business. MLU was then able to develop a coherent, integrated product and marketing strategy that was dedicated to meet the unique requirements of CVS. The new product line consists of the following models: • Aneroid • Semi-Automatic (A-50) – 14 memories • “Good” Automatic - 99 memories, IHD, single user, Wide-Range Soft Cuff • “Better” Automatic – 99 Memories, 2 users, IHD, Large LCD, WRSC • “Best” Automatic – Extra large Color LCD, 2 users, Wide-range Rigid Cuff • “Advanced” Wrist – 99 memories, 2 users, IHD

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Newsletter Apr. 2010

BP3MW1

BP3MV1

By designing this product line from the ground-up, MLU was able to use a consistent family design for CVS, which will help promote easy category shopping for consumers, eases manufacturing through shared tooling and is visually unique.

The new program is scheduled to be launched this summer at CVS stores nationwide. MLU was not awarded the business until late January, so this too was a significant challenge. However, through the excellent support of the entire team at Onbo, all launch plans are on track for an on-time product launch. We immediately set-up a CVS Launch Team, consisting of key members of Onbo, MLU and MLC. This cross-functional team, along with open communication, was a critical factor in the success of this product launch.

The CVS private label program is a two-year program, securing MLU’s largest customer for the foreseeable future. This foundation now allows MLU to focus on gaining new distribution, developing new product categories and improving margins.

Consumer Medical Product Business

Market exploration

of Microlife Blood Pressure Monitor in Guangxi province Reported by White Bai, Johnson Tang

When I started to take charge of the Guangxi market, the situation I faced was the hostile dispute between Lao Yi Xiang and our previous dealer Guangxi Owen and the ineffiency of fulfilling our operation strategy. This situation led to a sales turnover less than 20,000 RMB of our blood pressure monitor in Guangxi province. But the sales turnover of our competitors like Omron exceeded 3 million RMB, Panosonic reached to 1.2 milliom RMB, even Citizen was nearly 1 million RMB. Besides, the second tier bands such as Huihao, Kangzhuang and Dr. Mai were also conquering market aggressively.

Should Microlife quit Guangxi market or move forward?

First Round: Where are we?

Based on the facts just mentioned, I studied product characters, technical functions, price system and market situation and came to position Microlife as No.2 in Guangxi market. Perhaps some of you are confused about this positioning. Why do you define Microlife as No. 2 in Guangxi market? Can the dealers recognize this positioning? Here I would like to make a SWOT analysis to explain : Strength:

Weakness:

Opportunity:

Threaten:

1. complete product portfolio 2. price advantage against Omron and Panosonic 3. more international certifications

1. marketing by conceptions such as Swiss design, German technology, BHS and AAMI Certification 2. low and medium pricing of quality products to meet the market needs 3. stable market structure and high profit of dealers

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Newsletter Apr. 2010

1. relatively low band awareness in the market 2. insufficient marketing investment 3. no powerful sales force because of few main sales channels 1. low investment impedes market exploring 2. high requirements and investment are needed for the access to main sales channels such as big chain shops 3. no suitable dealers 4. leading brand already exists

According to my analysis above, Microlife can ensure a stable profit for the dealers; meanwhile we can raise our brand image and status in the market through the certification of China High Blood Pressure Union, which can draw us out of the competition from the second and third market brands and meet the market needs for the leading brand, but with low and medium pricing. That’s why I position Microlife as the No. 2 in the market. As a result, we can find out the suitable dealers for Microlife.

As long as we conquer the difficulty of building leadership, all the weakness and threats can be reduced.

After studying the suppliers of main sales channels, I found out that Nanning Shengnian Commerce and Trade Co.Ltd is the suitable partner for us. Company Shengnian was a target for us to develop dealership, but at the same time it is the dealer for Panosonic and Citizen products.

The Shengnian turned down many times our proposal, even the one from our marketing director Mr. Zhang.

How could we convince Shengnian to be our dealer?

This was a new challenge in front of me.

Consumer Medical Products Business

Second Round: What to do?

There are some issues to acquire the dealerships: 1. channel access charge and shelf fees for entering into big chain pharmacies 2. amortization of investing brand image on point-of-sale shops 3. cooperation and support for sales promotion 4. cash flow pressure of dealers 5. Convince dealer to sell Microlife products with priority Facing all these issues, I decided not to wait for support and resources passively, but to create conditions for a successful marketing with limited resources.

Here are my solutions to the issues: 1. pricing and investment by volume:

Third Round: How to do?

For the first year, stock-in price of dealers is defined as 55% of sales price, but the sales turnover can not be less than 1 million

All doubts from dealers were removed, our cooperation was

RMB. If the turnover reaches to 1.5 million RMB, the dealer can

smooth, and Microlife products entered into chain shops, such

have a restock price for 50% of the sales price. (Actually dealers

as Kongquan, Gucheng, Tongji , Guoda, Chaoyang chain

are not sensitive to the percentage of restock price. They care

pharmacy etc.

much more about the marketing investment. If the products can

Sales channels were now filled with Microlife products, and

not be sold, the percentage of restock price has no meaning for

together with shop investment, Microlife products covered the

dealers.)

market. But sales turnover was not stable, dealers were still

2. payment in 30 days after delivery, 4% administration and

worried. How could we survive in a competition with Japanese

promotion (A&P) and 2% rebate at year end:

brands?

4% A&P was not clearly defined. Dealers always take this as

This reminded me of the basic marketing theories which I have

part of their profit. That results in no further investment. I would

learned at university, 4P and 4S. 4P stands for Product, Price,

like to do with different approach. If dealer can restock 125.000

Place and Promotion. As to product, we are all clear that product

RMB of products, we can share 5000 RMB of sales personnel

can not be changed. As to price, our pricing is at a level which

cost ( 5000 RMB for 5 salesmen). This 5000RMB is actually 4%

market can accept. As to place, our products cover all main sales

A&P for us. However, dealers will perceive this as marketing

channels. In the end, we find out promotion put us in

support from Microlife; thus, increase restock volumes, and that

disadvantage. The promotion tools of our company is simply

leads to volume shrink of competitors' at dealers.

give-away gifts. It can not bring up enough market attraction and

3. invest 5% profit gained from dealers for marketing. Microlife

our sales personnel are also fed up with this promotion

paid the channel access charges and shelf fees. (The highlight is

approach. The sales force is of importance during sales. When

that it should match the sales turnover and paid with instalment.

there is not many promotion give-away assortment and lack of

Market share and sales turnover should be carefully calculated.

promotion tools, what we can do is to motivate the business

Never lose the trust from dealers.) This measure will make

staff of dealers and the site sales personnel. Chairman Mao has

Microlife the fisrt tier brand in the eyes of the dealers.

said, the people is the crucial winning factor during a war. Only if

4. entirely present company history, product characters,

people is motivated, the maximum fighting capacity is simply

technical advantages and future development to the dealers and

there. Therefore, I decided to carry out a people’s war and have

make them convinced about Microlife products.

invited all the personnel of Company Shengnian into the sales bonus plan of Microlife. Again we use the difference of 5% and

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Newsletter Apr. 2010

Consumer Medical Products Business

set out our new target as 1,5 million RMB yearly. Firstly, we set up benchmark shops. We let the dealer find out 3 shops which are capable to sell more than 30,000 RMB monthly. If they reach this target, each of them (normally 2 to 3 site salesmen) can gain 500RMB bonus. If they can reach 50,000RMB, each of them can gain 1000RMB. If Company Shengnian can reach annual sales target, TOP1 salesman of each quarter can gain 2000RMB bonus, TOP2 1000RMB, TOP3 500RMB. If Shengnian can reach an annual turnover of 1,5 million RMB, 3 site salesmen and 2 business staffs of dealer can have opportunity to have a 5-days trip to Kunming and Lijiang. The site salesman with the highest sales turnover can gain 3000RMB bonus. This sales bonus plan raised the enthusiasm of everyone. I also organized training together with dealers for the site salesmen, pharmacy personnel and business staffs, which made dealer and its personnel know the brand power of Microlife. For the moment our sales turnover overrided Panasonic and Citizen and was nearly close to Omron. Monthly sales turnover of Laobaixing Jintao Shop exceeded 45,000RMB, Gucheng Chain Shop more than 32,000RMB, Pharmacy Building about 30,000RMB etc. But we encountered big quality problems, which greatly influenced our sales. But we defeated Panasonic, the sales of Panasonic dropped deeply and Panasonic could only find way out of this market. Citizen was also hard to survive. The stock of Citizen products at dealers can not reach 20,000. At the end of year, the General Manager of Citizen led a team to Guangxi to find out the reason of market failure. In the market, competitors are sometimes also cooperation partners.

In order to have a leading position in the market, we and Omron together promoted the choice standard of blood pressure monitor of China High Blood Pressure Union. Through the OTC channel of retails, pharmacy channel of hospitals and educational program at Disease Controll Center, a firm standard for choice of blood pressure monitor was set up. Only digital blood pressure monitor with BHS and AAMI Certification can measure precisely. This concept successfully differentiates Microlife from Panasonic, Citizen, Huihao, Kangzhuang etc. and made us the No.2 brand in the market. At the same time, we win the bid of hospital-used blood pressure monitor of Provincial Health Dept. Guangxi. Now Microlife has a leading position in the Guangxi market.

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Newsletter Apr. 2010

Fourth Round: where to go?

2009 we have gained a successful battle of Microlife blood pressure monitor in Guangxi. We used one year to make our sales turnover exceed 1,5 million RMB and take the second place in the market. Thanks to the great support and acknowledgement from my boss Leon and Albert Zhou. More thanks go to Mr. Liangong, General Manager of Nanning Shengnian and all its staffs. Although we achieved a good performance in 2009, we still have a big gap from the market leader Omron. ( Sales of Omron 2009 exceeds 3,5 million RMB.) Because of our good performance, Omron has started aggressive sales activities, continuous advertisement with half-page on newspaper and on bus stations, increase of site salesmen, the important sales shops are running business with 3 shifts, each shift with one salesman. Our sales at flagship chain stores are again dropped far away from that of Omron. Previously our monthly sales at Laobaixing Chain Store is about 600 pcs and the same as that of Omron, but now the sales of Omron can reach 900 pcs.

The way to success is quite long, the only way is never stop fighting. I hope that our experience can be shared with all our colleagues and we want also to learn from other regions. We are ready now to move forward to the target of 2,5 million RMB of 2010 in Guangxi market.

Summary of success in Guangxi province: 1. focus on key sales issues 2. brand image is of necessity 3. motivate initiative of everyone 4. hospital channel is a plus

Energy Saving Business

Biddeford

Subic Corporation in the Philippines.

Reported by Lizette Figueroa, Mark Porter

In corporation between the front-end and back-end, Biddeford has gone from an estimated 10% market share in flexible heating category to an estimated 49% market share.

In 2010, Microlife established Biddeford Subic Corporation to open new manufacturing facility in the Philippines.

This aggressive commitment and business model has continued for 2010 business. Biddeford has captured all of the Sears USA market share, the remaining Target business and the second largest mass merchant in Canada.

Biddeford continues to lead the industry in energy savings solution for our consumers and our industry.

Weaving

Biddeford will continue to respond to the anti-dumping tariff issue and should have final decision in August, 2010.

Assymbly

Weaving

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Newsletter Apr. 2010

HR Program Competence workshop Action communication workshop Leadership communication workshop

HR Program

HR Workshop in Taipei and China Reported by Victoria Yang

Clay mapping workshop for internal value chain according to your “Be-Do-Have�.

Be: who are you at work?

Do: what do you do according to your job role?

Have: what is your value of final product (VFP) to your customer both internally and externally.

After Enterprise Wisdom program, we have developed three modules for the HR plan.

The first module: Competence workshop on 23. 24. Jan. The second module: Action communication workshop on 27. Feb. The third module: Leadership communication on 28. Mar.

The first module: Competence workshop on 23. 24. Jan. We identified competency required by each working level via a two-day competence workshop.

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Newsletter Apr. 2010

HR Program

Competence mapping after group discussion

Colleagues from China were invited to participate in the 2-day competence workshop

Executive Competency

Entry/Middle Management Competency

Global Thinking

Teamwork 1. Ability to act without considering self’s interest only 2. Willing to share 3. Rational, logical and effective communication) 4. Ability to work with others proactively) 5. Follow team codes or guidelines) 6. Mutual trust 7. Share same understanding toward organizational goals Learning 1. Put reading and learning into practical use 2. Willing to arrange and accept training programs 3. Proactive 4. Enrich self by attending various domestic and international exhibitions 5. Keep on absorbing new knowledge 6. Conduct market research to obtain information 7. Build knowledge base from learning 8. Utilization of external resources from both industrial and academic fields 9. Ability in integration 10. Put what is learned into use Execution 1. Clear direction and commands 2. Effective communication from top to down and execution 3. Clear accountability 4. Proper reward and discipline 5. Develop staff and enhance their execution ability 6. Advanced management in process 7. Regular review and follow-up 8. Result-oriented Innovation 1. Creative thinking 2. Destroy – not limited by existing status 3. Trying 4. Imagination/Inspiration 5. Exploring uncertainty/gaining new knowledge

1. Ability to understand and forecast trend of global technology and medical systems/policies 2. Integration of resources from fields in business, academics, and government globally 3. Cross-cultural communication and coordination Change Management 1. Gain insight to market trend and its impact to our own industry 2. Ability in setting strategy 3. Ability in executing strategy and flexibility in making adjustments when necessary 4. Awareness and ability in risk control 5. Possess courage of changing self before everything else Ability in executing strategy 1. Communicate and reach consensus in strategy 2. Team Building 3. Persistent 4. RITGAR Recruitment Institutionalization Training Goal setting Appraisal Reward

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Newsletter Apr. 2010

HR Program

Action communication workshop on 27. Feb. 2010

Purpose of action communication workshop is to identify emotional tone scale for appropriate communication manner at work. The emotional tone scale is one of the tools to identify emotion of yours and other’s, in order to bring an efficient communication result, thus resulting in cost and time efficiency.

Leadership communication workshop on 28. Mar. 2010

Developing leadership communication is one of the modules of the HR program for employees in Taipei. The purpose is to dig out the appropriate behavior, way of thinking and action of being a team leader working in a company to pursue company success.

Developing leadership communication is one of the modules of the HR plan for employees in Taipei.

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Newsletter Apr. 2010

Via delivering the baseball in a circle under various unexpected instruction, it helped people explore invisible problems and that triggered people to find out solutions working as a team for time and cost efficiency.

What’s New Web2- Microlife and IBM will launch joint research programs Be Green and Go Vegan

What’s New

Microlife and IBM

will launch joint research programs Reported by Anthony Liang

IBM Research Center (Located in Hawthorne, New York, this site is part of the T.J. Watson Research Center)

KY was invited to present Microlife’s business proposition and vision in the IBM research center

Microlife has devoted to discover ultimate healthcare and sustainability solutions in last few decades. Today, Microlife is standing on the emerging wave again by forming a strategic alliance with the IT blue giant, IBM, for a greater collaboration of cloud computing-oriented technologies and patient-centric collaborative care models.

Taiwan has been chosen by IBM to develop next generation healthcare service models by its unique and quality healthcare system. IBM Research decided to setup collaboratory office with Taiwan government and accomplishes in-market experiments locally to prove its enterprise vision called “Smart Planet”. In the meantime, Microlife is also been recognized by IBM with quality medical products as well as the web-oriented solutions. The new collaboration of IBM and Microlife will no only focused on developing healthcare cloud solutions but also creating global business integrations and disruptive innovations.

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Newsletter Apr. 2010

Microlife’s chairman, KY Lin, was formally invited to present his treasurable insights of global healthcare transformation in IBM Research Center (the well-known holy land of computer science – Watson Lab.) during 7th ~8th April 2010. KY and Microlife team had significant outcomes and constructive conclusions with IBM major industrial experts such as Dr. Robert Morris (Vice President of Services Research), Dr. David Cohn (Director of Business Informatics), Dr. Chalapathy Neti (Senior Manager for Information Analysis and Interaction technologies), Dr. Martin Kohn (MD, PCMH expert of IBM), Paul Carter (Director of IP Business Development, Healthcare & Lifesciences) and Henry Chang (Director of IBM Taiwan Collaboratory). Both corporations now are in line with highly related interests of creating a disruptive healthcare solution in coming future. Starting with cloud collaboration, IBM and Microlife will launch several joint research programs and strategic business plans together in 2010.

What’s New

Be Green and Go Vegan Reported by Victoria Yang

In a wish of eating less meat for our better health and for energy saving and carbon reduction, in Taipei we encourage colleagues to eat less meat by providing 5-grains rice for free during lunch time.

Enjoying lunch with healthy cuisine

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Newsletter Apr. 2010

Newsletter Microlife Global Microlife Corporation 9F, 431, RuiGuang Road, Nei-Hu, 114 Taipei, Taiwan.

Tel. 886 2 8797 - 1288 Fax 886 2 2659 - 6853 www.microlife.com.tw