Genicon going global
•Download as PPTX, PDF•
5 likes•10,524 views
The document discusses potential overseas markets for a medical device startup to expand into. It analyzes Brazil, Russia, India, and China based on their regulatory environment, level of import resistance, local competition/market saturation, and bargaining power of buyers. Brazil is identified as the top choice due to its internationally accepted regulations, zero import tariffs, heavy government healthcare spending, and fragmented distribution channel. China is also considered but faces challenges around import resistance and an uncertain regulatory framework. Europe is not recommended for expansion due to the difficulty of gaining market share. The recommendation is to enter Brazil initially and monitor China, while potentially exiting low margin countries in Europe.
Recommended
More Related Content
What's hot
What's hot (20)
Similar to Genicon going global
Similar to Genicon going global (20)
Recently uploaded
Recently uploaded (20)
Genicon going global
- 2. Diagnosis • Lack of a favorable channel in the US • High bargaining power of buyers through group purchases • High regulatory costs • Startup mode: limited resources
- 3. The paradox Bubble size = Margin 60% 40% Market
- 5. And cost… Bubble size = Margin / Cost
- 7. Is Goliath weak there
- 8. What else is good for a startup? • Disorganized channel • Low public contribution (govts usually have high bargaining power; may prefer local) • Easy regulation
- 9. Case Information • Economy • Health Care situation • Regulation • Medical Device Industry
- 10. Brazil- Qualifiables Positives • Government committed to expanding access to essential healthcare…10% GDP. • Regulation: International Standards generally accepted • Swift registration process (takes 10 mo., valid 5 years) • Few large-scale domestic manufacturers • Large, rapidly growing market • U.S. accounts for 50% import market • Unlike many other emerging markets- • Low import tariffs • No import duties • No value-added taxes
- 11. Brazil- Qualifiables • Negatives • Medical device distribution highly fragmented • 3000 importers/distributors • Expected to consolidate creating greater market access
- 12. Russia- Qualifiables Positives • The $1.98 Billion Medical device sector displayed robust long term growth • Public and Private Healthcare spending could be 3.8 percent of GDP which could reach $97.4 Billion by 2013 • The Russian economy is expanding and so are healthcare investments • By 2013 a CAGR of 7.74 percent was expected with for the medical device market and is predicted to have a market valuation of $2.88 billion • Imports contribute to 75% of the market in spite of the economic crisis giving local manufacturers an opportunity as the price of imported products rose sharply starting in 2005
- 13. Russia- Qualifiables • Negatives • Potential changes to legislation could worsen Tariff's on medical devices are expected to drop to an average of 5% with Russia potentially entering the WTO • Government could seek methods to increase the market share of local producers using methods like increasing tariffs • Local manufacturers have sales of about $1.98 billion
- 14. India- Qualifiables Positives • Regulations Improving Continually; becoming more transparent • $2.35 billion market for Medical Device Technology • Private sector accounts for ~75% of Health Care Spending • Imported High end Goods increase its share • Reduction of levies & Increase of foreign firms • Medical Devices rise by 23% expected YOY(2005-06)
- 15. India- Qualifiables Negatives • Poor, (but emerging) population •Intellectual Property Laws are lacking •Shortage of Staff in Private and Public sector •Private sector accounts for ~75% of Health Care Spending
- 16. China- Qualifiables Positives • Medical device market accelerating by 12.87% YOY • Population = 1.3 billion (ageing population), although population is highly segmented • Foreign medical device manufacturers are expected to increase their presence
- 17. China- Qualifiables Negatives • Heavy resistance to foreign imports • Although Population = 1.3 billion (ageing population), its highly segmented • foreign competition gaining presence • The regulatory framework is hindering the path toward efficient operations in the medical industry, but improvements expected in the next couple of years
- 18. How do we decide? • Regulation / Compliance • Brazil: international accepted! Fast process • Import resistance • Russia: weak teeth/ political; • Brazil: zero tariff! • India: somewhat hopeful • Russia: 75% potential but strong push for local • China: uncertain, seems difficult and slow • India: Moderate; China : High • Bargaining power of buyers • Political • Russia : Indirect govt. funding • Russia, China unfavorable • Brazil: heavy direct govt spending • Brazil looks much better • China and India: favorable privatization trend • Size and Growth • Local competition / Saturation/Price pressure • Cost advantage • China Local players, price pressures • how about geography • Russia: local encouragement • Early entry advantage • India: nothing mentioned (better) • Market similarity
- 19. 25 20 Does size matter? Brazil 15 Russi a India 10 5 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
- 20. Barrier to entry Brazil Russia India China Regulation Import-resistance Local-C/S Buyer power
- 21. Finalists Brazil China Regulation Import-resistance Local-C/S Buyer power
- 22. How about Europe? • A startup can easily make a small dent • Hard to expand • Margin/Cost information not available for BRIC
- 23. Recommendation • Enter Brazil • Keep an eye on China • Maintain status-quo in high Margin/Cost countries like Spain and Greece • Consider exiting low Margin/Cost countries like Italy (sorry Professor)
Editor's Notes
- Imports: Russia 75%BrazilLocal C/S:ChinaInconsistent IP rulesStrong local encouragementBrazilHeavy reliance on importsRussiaVery heavy reliance on imports (75%)
- Imports: Russia 75%BrazilLocal C/S:ChinaInconsistent IP rulesStrong local encouragementBrazilHeavy reliance on importsRussiaVery heavy reliance on imports (75%)