Delcon S.r.l. is an Italian “technology boutique” headquartered in Milan that specializes in designing and manufacturing medical devices for blood collection and processing, hematology, and microbiology. Seeing an opportunity in the U.S. market to collaborate with research institutions, Delcon wanted to focus on an advanced Research and Development (R&D) center to serve as a new and thriving hub for knowledge exchange.
Problem
Delcon aimed to penetrate the U.S. market and establish a robust organization while simultaneously capitalizing on market potential to launch an R&D facility. They knew that this was more than what one person could handle and that it would take time, so they needed to find a partner that would help them get on their feet quickly. The first step was to hire a Senior VP of Sales to kickstart the process.
MI’s Solution
MI offered 360-degree support through our International Business Incubator, which was designed to give parent companies the support of a fully-owned and operational U.S. subsidiary without having to hire a full staff at the beginning. In leveraging this program, Delcon was able to immerse itself in the market, fostering vital relationships that not only opened doors but also demonstrated its unwavering commitment to establishing a prominent presence in the U.S.
Deep Dive
Following an Innovative Path
When it comes to manufacturing, companies traditionally begin by establishing a core knowledge center. This knowledge center evolves over time through interactions with suppliers and distributors. As core products and capabilities are refined, they often prove capable of addressing needs far beyond those of their initial target audience. Typically, companies maintain their knowledge center in their home country and export their products. However, with innovation at the core of Delcon’s product development, they were comfortable deviating from the norm with regard to bringing their business stateside.
In MI’s experience, Delcon’s vision sets it apart from other clients. From the outset, Delcon recognized that knowledge is cultivated through market interactions—in their case, with hospitals, blood banks, and diagnostic medical centers—and that knowledge is happening everywhere, all at once. As such, they entered the U.S. market with the desire to not only drive sales for the parent company but to expand their knowledge center through the subsidiary.
This vision fundamentally shaped Delcon USA’s trajectory. Rather than operate as a traditional subsidiary with production in Italy and products exported to a U.S. distribution center, Delcon aimed to invest in research and development with the goal to eventually manufacture within the U.S. for the U.S. market.
A Fortuitous Meeting
By chance, Delcon and Management inSites simultaneously debuted at SelectUSA, the premier investment summit in the United States for promoting foreign direct investment. Delcon’s CEO, then General Manager, was collecting vital information about the U.S. market and supply chain in order to begin establishing its subsidiary. While MI faced competition for Delcon’s consideration, we ultimately emerged as their trusted partner because our International Business Incubator program perfectly aligned with their U.S. market entry vision. Their focus on innovation required a reliable partner to handle logistics, order processing, administrative duties, and more. While seemingly mundane, our expertise in those domains allowed Delcon to focus on what they do best—helping healthcare organizations improve how they collect and transform life-saving blood.
Once Delcon became a part of our IBI, the administrative work began. It was up to MI to establish Delcon USA as a legal entity within the United States. We handled the nitty-gritty work of filing the necessary incorporation documents with the state and filing for the EIN with the IRS. In addition, we guided Delcon through acquiring a U.S. work visa for the General Manager, which included crafting a comprehensive business plan for the application that later served as a roadmap for the U.S. entity.
But that was just the beginning. MI’s commitment extended to implementing the right organizational structure and work processes, ensuring that the U.S. subsidiary had a rock-solid administrative foundation. We established bookkeeping procedures following industry best practices, connected Delcon USA with a trusted CPA, and adapted the parent company’s marketing materials and user manuals to cater to the U.S. market. Additionally, when Delcon was asked to vacate the 3PL warehouse they were utilizing due to insufficient inventory turnover, MI stepped in to provide an alternate solution with our new SC IBI warehouse.
Building Relationships
In terms of operations, Delcon USA deliberately set a pace distinct from most ventures in the IBI. Rather than chasing rapid sales growth, Delcon USA prioritized establishing a robust U.S. presence and cultivating relationships with potential customers. This strategic choice was influenced by the recognition that in the medical field, where equipment quality has a direct and critical impact on people’s lives, patience and precision take precedence. In addition, the industry’s higher entry threshold indicated that rapid sales growth was not a reasonable objective in an industry where credibility and trust are paramount.
Additionally, the parent company was patient with regard to sales figures because they understood that their success in the U.S. market would hinge not only on the knowledge they brought from Italy but also on the insights and expertise they were actively seeking to acquire within the U.S. This necessitated hiring the right person as their Senior VP of Sales in the U.S. to open doors and get them closer to their end-users.
By building a partnership with MI as well as industry professionals, Delcon was able to attract and hire a top industry expert. How? MI essentially became the Employer of Record for Delcon USA’s new employee. This allowed their U.S. Senior VP of Sales to benefit from MI’s health insurance, 401K package, and more. In addition, by having a structure in place with the IBI, the new employee was supported in his work. Too often with new U.S. ventures, companies only hire a salesperson and they are left to do everything all on their own. By utilizing the IBI, despite the fact that it was a startup in the U.S., Delcon was able to attract top-tier talent that paved the way for future growth.
Innovative Design
By year three, Delcon’s patience paid off. With MI’s administrative support, Delcon USA was able to forge a groundbreaking partnership with a major U.S. blood collection and distribution organization, resulting in a $1 million+ contract for cutting-edge equipment designed specifically for the U.S. market—aligning perfectly with their initial goal. This equipment was well received, even winning the XXVII edition of the ADI Compasso D’oro Award, the oldest institutional design recognition in the world.
While MI isn’t a sales-focused entity, we help support our clients’ sales efforts when possible. In Delcon USA’s case, we picked up the phone and found the correct person at a major U.S. supplier to make it easier for the Senior VP of Sales to successfully close another deal. MI’s support continued in the backend, coordinating communications with the parent company across time zones to ensure that Delcon USA met deadlines to upload all of the necessary product information and marketing materials to the supplier’s website.
Anticipating Growth
The beauty of our IBI program lies in MI’s dependability. While companies focus their efforts on current success, they know that we are keeping an eye on the road ahead. Once Delcon USA joined the supplier’s network, MI suggested a move toward automation. While their current system met their needs, they ultimately weren’t suited for long-term growth.
Recently, Delcon has transitioned to an inventory management system called SOS and linked it with their accounting software, QuickBooks Online (QBO). This move was driven by a forward-thinking approach. With significant sales on the horizon, it was important for MI to lay a solid foundation for Delcon USA, and streamlining weekly or monthly recurring tasks is one way of maximizing potential growth.
For instance, SOS is helpful with regard to price verification. Delcon USA has a diverse customer segment, which means that the pricing structures for each are different. The use of SOS ensures that Delcon’s pricing is always up to date and aligns seamlessly with the specific needs of each customer, further enhancing their overall efficiency and customer satisfaction.
These achievements marked monumental milestones for Delcon, greatly enhancing its visibility and credibility and establishing Delcon USA’s reputation as a trusted manufacturer within the competitive landscape of the IVD industry.
Key Learnings
Delcon’s journey exemplifies the power of strategic patience, innovation, and collaborative partnerships. You can start small in the U.S. and still have a meaningful impact, especially if you choose your partners wisely. With MI’s customer-centric approach, we tailor our IBI platform to meet the unique needs of each of our clients. We’re your partner and truly believe we only succeed if you do.