A Ray of Hope for the Rising Sun
The Situation
For years since the company’s founding in 1949, Hitachi Medical Corp. has maintained a key role in the struggle for dominance within the medical imaging industry. Despite their position in this global market as one of the top industry players in imaging, the brand’s success was frequently overshadowed by larger names such as GE, Philips, and Siemens.
By 2010, even the fair size of Hitachi’s ultrasound market share looked subpar when compared to the gargantuan two-thirds market share held by the top three companies combined (GE alone had a 30% market share!). Based on these trends, Hitachi seemed like it would forever remain relegated to a second tier position in both of these imaging markets.
Rather than take a generalist approach like Hitachi Medical, Aloka – the self-proclaimed “Innovator in Ultrasound” – elected to establish itself as a company with a clear focus from the beginning by turning its attention toward the ultrasound market exclusively. While this well-carved niche provided Aloka with enough success to become a major player in this space, it would not be enough to grant them the kind of dominance enjoyed by the likes of their peers. Like Hitachi, it too appeared as though Aloka would amount to nothing more than a second string ultrasound player. With the arrival of 2010, not even that niche focus could secure Aloka’s position as a powerhouse in the ultrasound market.
If either of these brands wanted to win big, they would need to make a bold move.
The Move
In 2006, Hitachi and Aloka announced that they would engage in a strategic partnership with one another. As part of the deal, Hitachi would become a distributor of Aloka’s ultrasound products, and Hitachi Medical, in turn, would become the second largest stakeholder in Aloka. Who knew that this relationship would eventually lead to the announcement four years later that would threaten to shake the balance of power in an increasingly competitive ultrasound market?
In November 2010, Hitachi Medical announced its intent to acquire Aloka. The purchase was completed in December 2010 – a mere one month after news was made public about the merger. On January 5th 2011, Aloka was officially recognized as a subsidiary of Hitachi Medical.
The Result
Only four months following Hitachi’s announcement, Aloka’s global website has already received the Hitachi Medical rebranding treatment for the Japan region of their business (in both English and Japanese). According to those websites, Aloka is now known as Hitachi Aloka Medical, Ltd. In another aspect of the rebranding, Aloka’s website has also taken on a similar look and feel to Hitachi’s in both color scheme and page structure.
At the time of this posting however, no changes have been made to Aloka’s US and European websites.
The full impact of this merger still remains to be seen, especially as it concerns the ultrasound market share of the Big Three. It will still be a while before we witness any potential shifts in this market.
Our Perspective
In honor of the AIUM 2011 convention taking place in New York this week, we chose to spotlight two brands (that’s right, TWO!) in this week’s Brand Profile. Among the many players in ultrasound, these two are the most poised to cause a stir in this segment over the coming months. As you have probably gathered by now, these companies are Hitachi Medical Corp. and Aloka.
Compared to some of the other acquisitions we’ve witnessed in the life science industry, this merger has certainly proven to be one of the fastest and most smoothly executed transitions in recent history. Much of the process’s speed can probably be traced back to Hitachi and Aloka’s initial strategic relationship back in 2006.
As quick as the transition has been, though, we are still left wondering about the full intentions of the merger. Since Aloka will continue as a subsidiary, it should come as no surprise that none of Aloka’s ultrasound products are currently listed on Hitachi’s website. Noting this situation, certain oversights – or at least what appear to be oversights – will still have some people scratching their heads. As visitors to Aloka’s global website will note, neither the US nor the European websites have changed to reflect Hitachi Medical’s new ownership of the company. This could mean one of two things. First, it could be the case that Aloka’s entire operation has been acquired, but these two markets are being allowed to carry on simply as Aloka in order to retain a local feel without the complications of a Hitachi Medical rebranding. Or, and perhaps most likely, Hitachi Medical Corp. has acquired Aloka in its entirety, and the full rebranding is still underway. The rollout clearly started in Japan and now that their site has already been completed, this leaves the US and Europe’s next in line for the treatment.
Our agency has reached out to both companies to confirm which scenario – if either – is in play. We are currently awaiting a reply.
In any case, this move could easily turn into a major success for both companies. Hitachi Medical has already been smart enough to allow Aloka to retain its own name throughout the rebranding process, recognizing that both of their brands carry significant brand equity in the life science industry that should not be wasted – Aloka’s for ultrasound, and Hitachi’s for medical imaging. The new relationship mutually benefits both companies.
If there were any two brands that could threaten to win a significant chunk of the ultrasound market over the next several months, it would be Hitachi Medical and Aloka. Alone their brands were strong, but together, they make a fierce competitor in the ultrasound market. Keep a watchful eye on the unified Hitachi Aloka Medical, Ltd. There is sure to be plenty of interesting news on the horizon from this new powerhouse in ultrasound.
Brand Timeline
- 1949 – Hitachi Medical Corp. is founded under the name Higashi-Nippon Senikikai KK
- 1950 – The Medical and Physical Institute Co., Ltd. is founded after the medical dept. of Japan Radio Company was spunoff to become its own independent company
- 1952 – Higashi-Nippon Senikikai KK changes its name to Tonichi Jitsugyo KK
- 1954 – Tonichi Jitsugyo KK changes its name to Hitachi Roentgen KK
- 1955 – Hitachi Roentgen KK changes its name to Hitachi Roentgen Hanbai KK
- 1960 – The Medical and Physical Institute Co., Ltd. develops the world’s first commercially available diagnostic ultrasound system
- 1970s – Aloka products in the US are sold through distributors like Johnson & Johnson
- 1973 – Hitachi Roentgen officially becomes Hitachi Medical Corporation
- 1976 – The Medical and Physical Institute Co., Ltd. Changes its name to Aloka, which means “Ray of Hope” in Sanskrit
- 1985 – The Hitachi Medical Corporation of America is established
- 1986 – Aloka opens its first US office
- 1989 – The Hitachi Medical Corp. of America becomes Hitachi Medical Systems America, Inc.
- 1991 – Aloka America begins selling its own ultrasound units rather than through distributors
- 1990s + 2000s – Hitachi Medical begins global expansion and adds multiple subsidiaries to its roster
- 2002 – Hitachi Medical Corp of America merges with Hitachi Medical Systems America, Inc.
- 2006 – Hitachi Medical Corp and Aloka form a strategic partnership
- 2010 – Hitachi announces acquisition of Aloka
- 2011 – Aloka becomes an officially specified subsidiary of Hitachi Medical Corp.
