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Align Idea Proposal (ALGN)

Align Idea Proposal (ALGN)
 

Will competition continue to slow Align’s clear aligner sales among young adults and teens in North America?

Report Available: October 3, 2019

 

Blueshift’s initial research found ALGN performing well but projecting slower growth because of sluggishness in its young adult and teen segments in North America and a tough consumer environment in China. Intense DTC competition and orthodontists and dentists experimenting with new clear aligner products were cited as the reason for the slowdown. ALGN is fighting back with a multichannel advertising program and professional educational programs designed to overcome the competitive onslaught.

 

Observations

  1. ALGN’s Q2 results beat consensus but guidance was lower than expected. Revenue increased 22.5% year to year. International shipments were up 36.7% and U.S. growth grew 16.5% year to year. Concerns leading ALGN to guide lower than expected include slower growth in the young adult and teen markets in the U.S., economic declines in China yielding softer sales, and ASP declines of 6.5% domestically and 8.4% internationally. ALGN acknowledged an increase in competition, especially in the DTC market.
  2. To combat the competition, ALGN has developed a multichannel consumer advertising program and is doubling its media budget. The new campaign will run across all media channels including national TV networks, connected TV such as Hulu and other streaming services, digital media, and all social media as well. The campaign is designed to highlight the benefits of Invisalign treatment, its patented technology, and stress the personalized care provided by a dentist or orthodontist.
  3. ALGN is also stressing its professional education and peer-to-peer learning programs in an effort to hasten growth. In Q2, ALGN hosted programs worldwide that were attended by more the 2,250  industry practitioners. One session of note was the first ever Invisalign Teen Summit that drew 300 doctors and staff in Los Angeles. The program focused entirely on Invisalign teen treatment and the teen culture. It was designed to turn low teen prescribers into high teen prescribers by combining Invisalign specific clinical and practice “how-tos” with an immersive teen culture experience, social media support and training, and insights from teen influencers.
  4. Blueshift’s June 23 ALGN report found that Invisalign has become the standard of care in the orthodontics community and is the most recognized brand of clear aligners in today’s market. As the company’s patents steadily come to a close, a growing number of competitors have emerged and are aggressively marketing directly to consumers and encouraging general dentists to expand their offerings to include clear aligner systems. ALGN is at risk of losing share and opportunities in the dentist and the at-home/online markets where treatments are designed for patients with minor crowding or spacing issues. ALGN has responded to the onslaught of competition with continued innovation and treatment programs.

 

Will DTC competition in the clear aligner space continue to slow ALGN’s growth in the young adult and teen markets? Will ALGN’s multichannel marketing program and clinical education programs reverse the slower sales trend?  Will clear aligner products become commoditized? How does the Invisalign technology compare to competitors? To answer these and other questions, Blueshift will gather data and issue a market research report from independent sources in the following areas: Dental practices offering Invisalign, Dental practices offering competitive products, and Industry specialists.  

 

Companies: Align Technology Inc. (ALGN), 3M Company (MMM),  Danaher Corp. (DHR), Dentsply Sirona Inc. (XRAY), Straumann Holdings AG (STMN.SW)

 

Research Begins: September 16, 2019

 

To see other ideas Blueshift Research is currently working on, please click here.

 

 

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