Biotech_Group No 01_Overview International Business_International Marketing.pdf

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Unformatted text preview: INTERNATIONAL MARKETING GROUP MEMBERS : Group 1 (PGDM BIOTECH) DELIGHT STELLA (04) GOPAL CHOUDHARY (05) ADINATH CHAVAN (02) TANAYA CHAUDHARI (17) VINAYAK MISHRA (19) TABLE OF CONTENTS 1. Introduction on International Business 2. Emergence of Developing nations in IB 3. Global strategy review and Framework 4. Globalization Process in India What is International Business ? It can be defined as the expansion of business function from domestic to any foreign country with an objective of fulfilling the needs and wants of internnational customers. The exchange of goods & services, resources and skills among individuals & businesses in two or more countries. According to International Business Journal International business is a commercial enterprise that performs economical activity beyond the bounds of it's location, has branches in two or more foreign countries and kmakes use of economic, cultural, political, legal and other differences between countries. Factors contributing to rapid growth of International Business Increase in & expansion of technology Development of services that support internation business Growing consumer pressure Increased global competition Importance of International Business Market Expansion Brings Foriegn exchanges Economies of scale Cost Advantage Improves international relations Provide employment opportunities Government support EMERGENCE OF DEVELOPING NATIONS IN INTERNATIONAL BUSINESS PHILIPPINES Market Overview 13th largest country populationwise ( > 109 mn) 90% literacy rate One of the fastestgrowing economies. Market Challenges Graft and corruption Stringent Regulatory System Underdeveloped Infrastructure High price sensitive market. Market Opportunity Best prospect market for U.S. companies Huge opportunity for digital infrastructure 3. Armed force equipments is another major sector PHILIPPINES HEALTHCARE SECTOR 100% Medical equipment and 50% disposable equipment imported. 1800 hospitals with 60% privately owned 94% of Filipinos are medically insured (Philhealth) Growing incidences: hypertension, diabetes/kidney diseases, TB/respiratory ailments, Cancerand some incidence of HIV/AIDS. PHILIPPINES PHARMACEUTICALS SECTOR Market growth of 53% from $4.3Bn in 2013 to $8 Bn in 2020. Factors that played role in growth: Govt intervention in price control. acceptance of Generic drug variants. 11th position in the Asia-Pacific region. 3rd largest Pharma market in ASEAN. Generic med Prescription increased by 11% from 2011 to 2014. 75% of foreign pharmaceuticals companies of the pharma market Sanofi, Pfizer, GSK. Fastest growing companies - Sandoz (generic), OEP of Taiwan, Getz Pharma of Pakistan. Govt initiatives: BnB project ( Botika ng Barangay) 50-70% cheaper healthcare services for rural areas. Republic Act A 9502: Cheaper Medicine Act- The Philippine Government in 2007 for the affordability of quality meds for poor Filipinos. For growth in the Philippines, the pharma market needs Heavy protection for patents and trademarks under the Intellectual Property Code of the Philippines. (Source: KPMG report) VIETNAM Market Overview A rising star in Asian economy By 2050 Vietnam will have the strongest average GDP growth The U.S. is one of the largest export keyplayers. Market Challenges Corruption Laws and regulations The legal system and contract sanctity Tax structure Infrastructure Market Opportunity Telecommunications, information technology, power generation, transportation infrastructure construction, environmental project management and technology, aviation, defense, and education are promising opportunities VIETNAM PHARMACEUTICAL SECTOR 171 pharma companies operate in Vietnam, 9% (FIE) Foreign-invested enterprises & 4% JVs. 28% have GMP certification. Drug Regulatory bodies: Pharmaceutical products are under the management of the Ministry of Health (MOH), The Drug Administration of Vietnam (DAV). The 3 largest public pharmaceutical companies are DHG, TRA, and DMC. (Source: Contract Pharma) One of the highest growing markets in Asia Vietnam's pharmaceutical industry ~$10Bn from ~$5Bn in 2015. High-quality drug demand catalyzed by high economic growth, population growth, high income per capita. Vietnams capabilities are limited to generic meds, due to its adherence to WTO (since 2007) enforcement of International patent law, lack of capability for research and innovation. Lack of supply chain supports so export business to more profitable market is affected. MNC's cannot sell pharmac`tical products directly in market, there is an involvement of distributors. Which has poor transparencyand weak network. WHich results in hike of price. (Source: LinkedIn article by James Tran Neuroscience PhD) VIETNAM DRUG REGULATORY PROCESS Drug administration of vietnam responsible for approval, GMP assess product license release etc. NDA reviews expect > 3 years, +1 year for stability data. Limited time frame of patent expiry (5-10 yrs) and need of 5 years for regulatory approval in Vietnamm bring limitation in investment returns. There is need of efficiency in regulatory processes with FDA and EMA approval. NIGERIA Market Overview the largest market in Africa with a population of 200 Mn By 2050 Nigeria will have GDP of $ 6.4 Trillion Oil accounts for 90% of export U.S is one of the largest investors with $ 1.3 trillion China is Nigeris's largest contractor of about $ 77 Bn worth of infrastructure projects. Market Challenges Corruption Foreign Exchange Restrictions Intellectual Property Regional Security Market Opportunity Aerospace (aircraft, services and parts). Agricultural products and equipment. Computer hardware and software. Education and training. Electricity and power generation. Franchising. Healthcare services and medical equipment. Oil and gas equipment. NIGERIA PHARMACEUTICAL INDUSTRY The total Nigerian Pharmaceutical market is $2Bn according to PMG-MAN. Prescription market $ 500 Mn. OTC pharmaceuticals $900 Mn. Biological products (vaccine, insulin, etc) $100Mn. a high percentage of the processed raw materials are imported Heavy machines and equipment used are mostly manufactured overseas and imported. Labour is still very cheap. A subsidiary of large multinational companies that manufacture patent-protected, branded products for local and regional markets. Global manufactures of generics focus on developed markets in the United States, Europe, and large-middle income markets such as India and China. Some also have manufacturing operations in smaller developing countries or JV with local manufacturers. Generic companies with predominantly national operations that focus on the domestic market with occasional exports into neighboring countries. Small-scale local manufacturers usually make a limited number of products, including traditional medicines to serve local or regional markets. TANZANIA Market Overview Tanzania reported sustained growth of GDP since 1990 with $ 62.22 Bn GDP (2019) By 2050 Nigeria will have a GDP of $ 6.4 Trillion Oil accounts for 90% of export Total Exports: $ 9,824.4 million for 2019 Total Imports: $ 10,361.7 million for 2019 Market Challenges Poor legal development Poor infrastructure Limited availability of skilled labor Property rights issues Volatile regulatory environment Market Opportunity sectors like energy, transportation, infrastructure, mining, tourism, agricultural processing and telecommunication. TANZANIA PHARMACEUTICAL MARKET The pharmaceutical market is broadly classified into the institutional market and the retail market. The institutional market is dominated by the Tanzanian Government’s Medical Stores Department (MSD). It comprises about half the total market: purchases of drugs by MSD in 2008–2009 (92,914 million Tanzanian shillings) constituted about 51 percent of the total market. They get global funds for the management of AIDS, Tuberculosis, and Malaria and a total expenditure of $1030.9 Mn. Retail pharma consist of 49% of total market, wherein OTC Generic local meds, and imported are sold under brand name. All drugs sold are registered under TFDA. Local companies are Tanzania Pharmaceutical Industries and Keko Pharmaceuticals More than 50 companies supply meds to Tanzaniawhich includes Cipla, GSK, Shelys (Tanzania company), Elys ( Kenya company), Pfizer, Novartis, Bristol-Myers Squibb, Sanofi etc are key players. KENYA Market Overview Kenya has domestic market of 50 million people also a leading economy in Sub-Saharan Africa. Two-way trade U.S. and Kenya accounted $ 1.1 Bn in 2019. Strong bilateral and multilateral relationship. Agriculture is backbone of Kenya's economy 26% of GDP. Market Challenges Corruption IPR enforcement; Unemployment and poverty; Land reforms and Security Market Opportunity The U.S. - Kenya free trade agreement negotiation increased regional and continental integration. Leader in the digital economy of the African region. Infrastructure growth opportunities. KENYA PHARMACEUTICAL MARKET The value of the Kenyan pharmaceutical market was estimated at US$ 417 million in 20104 and it is expected to grow at a Compound Annual Growth Rate (CAGR) of 15.9% between 2009 and 2019 in US dollar terms. Medicines for the pandemic diseases (HIV/AIDS, malaria and TB), Kenya is highly dependent on donor funding. A significant portion of the Kenyan Government’s public procurement of medicines is also sourced outside Kenya. The Kenya Medical Supplies Agency (KEMSA)’s 2010/2011 government budget for the procurement of essential medicines was US$ 49.5 million. Of this, about 60% was for Rural Health Facilities (RHF). Pharmaceutical Manufacturing Companies In Kenya: Alpha Medical Manufacturers , Aventis Pasteur SA East Africa ,Bayer East Africa Limited, Beta Healthcare (Shelys Pharmaceuticals), Cosmos Limited, Eli-Lilly (Suisse) SA, Elys Chemical Industries Ltd, Glaxo SmithKline, Novartis Rhone Poulenic Ltd, Pfizer Corp (Agency) , Pharmaceutical Manufacturing Co (K) Ltd, Pharmaceutical Products Limited , Phillips Pharmaceuticals Limited, Regal Pharmaceutical Ltd, Universal Pharmaceutical Limited Cardiovascular, diabetes and anti-infectives constitute the largest and fastest-growing prescription market segments, and GlaxoSmithKline (GSK) is reported to be Kenya’s leading pharmaceutical supplier, with around 12% market share. Global Strategy What is Global Strategy? Performance of business Interdependeant nature of global market Theoretical approach Industrial Organization Theory Resourse based Theory Strategic Imperative Competing Globally To leverage a Competative edge Importance of Global Strategies Interdependency Configuration Co-ordination Global Strategy Tanzania local contacts, cultural appreciation, and relationshipbuilding are important Kenya Market counseling, export strategy development, Nigeria Relationship with a locally registered company Vietnam Develop core strategies and capabilities Philippines Eligibility Criteria for Procurement of Goods and Infrastructure Projects and Consulting Services Current Theoretical Approach to global Strategy Industrial organizationbased theory Resource based Theory Principle of Coalignment Internal organizational Competitive Advantage resources 5 most influential theory Critical resources Multi-dimentional Construct Fundamental Assumptions Resource based Theorist An Integrated conceptual framework of global strategy Internal organizational factors Global Strategy External industry globalization drivers Global business performance Global Strategy- KENYA Setting out a roadmap for industry to achieve GMP standards Strengthening mechanisms for quality assurance of medicines in the distribution chain Improving regulatory capacity Accessing Investment funds Developing necessary human resources Global Strategy- NIGERIA Focus first on cities and then on commercially attractive districts Create a granular view of the opportunity by TA and channel Understand the reality of patients journey for priority TAs Improve ability to handle sales and distribution networks Build a strong local leadership team Global Strategy- VEITNAM Structured in mix of both public, private and foreign agents Foreign pharma companies are not allowed to directly distribute on the market Foreign investors enter by eastablishing joint venture company Product registration - Drug registration of Veitnam Newly developed drugs take years to enter veitnam Global Strategy- TANZANIA Input-output relationships with buyers and suppliers of inputs are the key linkages The process of upgrading through learning and the accumulation of capabilities within health industries Sutton's model Severe competitive ‘squeeze’ - price competition from imports, and competitive pressure to invest to upgrade Global Strategy - PHILIPPINES 500 drug traders, 700 drug importers, and 5,000 drug distributors manufacturing plants in the country closed down their facilities, and began to import only few pharmaceutical multinationals have manufacturing facilities e.g. GSK importation of medicines (and other goods) has been traditionally challenging government has doubled its efforts in improving the pharmaceutical market External industry Globalization drivers Market factors Cost factors Competitive factors Technology factors Environmental factors Internal organizational factors Market orientation Managerial orientation and commitment Organization culture Organizational capabilities International experience Global business performance Financial performance Strategic performance Implementation of Global strategy Business competitive position Globalization Expansion of economic activities across the political boundaries of nation Increasing economic openness and growing economic interdependence between countries Opening up of markets to foreign players and vice versa Benefits Economic development of a nation Enhance economic interdependence Allows firms from developed and less developed economies to compete Inflation less likely to have damaging impact Increase competitiveness Globalization in India Largest and fastest-growing market India is the 5th largest economy in the world ( $ 2.94trillion GDP) In Purchase Power Parity terms, India is the 4th largest economy Service sector-fastest growing sector Globalization in India (After 1947) Phase 1 ( 1947-65) Focus on gov led investments in Manufacturing. Several large public sectors units were set up. These companies exist even today Phase 2 (1965-80) Gov involvement in industry increased. Strong Licensing Laws . PSU and several small- scale private sector manf. entities grew. Phase 3 (1980-90) Partially opening of economy to external trade. De-licensing of some key sectors for private participation. Formation of Maruti Suzuki Phase 4 Early 1990s Liberalization of Industries. Scope of Licensing dropped. CD Slashed FDI in various sectors opened up Phase 5 2000 Onwards Rewards of development learning . Indian business enterprises became competitive and looked at taking at global players. Tanzania Developing country (lower income level) Economic Growth: 2% Inflation: 3.3% Export: -8.6% Import: 9.12% Globalization index: 49.73 Largest Pharma market in Sub Sahara Africa (USD 496mn) Pharma products import: 3% Top importing countries: India, Egypt, Switzerland, USA, South Africa Top exporting countries: India, China, Japan, Germany Imports of Tanzania (Pharma) Kenya Developing country (lower middle-income level) Increased Integration Economic Growth: -0.31% Inflation: 5.4% Export: -0.1% Import: 11.36% Globalization index: 55.79 No import tariffs on pharmaceuticals Pharma products import: 3.29% Top importing countries: India, China, UAE, Saudi Arabia, Japan Top exporting countries: USA, Netherlands, Pakisthan, UK Imports of Kenya (Pharma) Nigeria Developing country (lower income level) Economic Growth: -1.79% Inflation: 11.4% Export: -26.96% Imports of goods and services as percent of GDP: 19.80% Globalization index: 52.12 Exports of Nigeria (Pharma) Veitnam Developing country (lower middle-income level) Economic Growth: 2.91% Inflation: 3.2% Export: 4.97% Imports of goods and services as percent of GDP: 103.60% Globalization index: 50.11 Phillippines Developing country (lower middle-income level) Economic Growth: -9.57% Inflation: 2.6% Export: -16.25% Imports of goods and services as percent of GDP: 40.27% Globalization index: 64.85 THANK YOU ...
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