The paper 'Global Market Analysis of an MNE - Roche Pharmaceutical Company " is a good example of a marketing case study. Multinational Enterprises (MNEs) are main actors in global business, according to Bartlett and Ghoshal (2000, p. 14), an MNE is a firm that has direct foreign investment (FDI) and it is involved in actively managing the firm in a foreign country. This paper analyses factors leading to an MNE engaging in foreign direct investment. The MNE under analysis is Roche, a leading pharmaceutical company with a global outlook and the country of entry in Indonesia.
There are many factors that affect business in Indonesia and that may serve as attracting factors for Roche to enter the market. This will be discussed in detail by analyzing Indonesia and the ASEAN region as a whole. SWOT analysis will be used to analyze MNE firm and recommendation for strategies that the firm can employ in expanding to Indonesia. The analysis will help in identifying the entry mode that can be adopted by Roche in entering Indonesia, the analysis will be aided by relevant theories that influence the mode of FDI. MNE Analysis: ROCHE Roche is a multinational enterprise dealing with pharmaceutical products; the company is headquartered in Basel, Switzerland and has been in operation for over a century.
It produces drugs for autoimmune diseases, virology, metabolic disorders, central nervous system diseases and it is a world leader in in-vitro diagnostics and cancer drugs (Hummer 2005, p. 12). SWOT analysis of Roche Strengths In 2009 Roche completed the acquisition of Genentech for $ 4.6 billion (Hummer 2005, p. 13). Therefore, the company got access to the portfolio of oncology which strategically aligned the company to revenue growth and increased its competitive advantage in the oncology market.
As a result, the company share in oncology market augmented to 30.4% and shields the company from exposure to non-patents in future (Hearing 2005, p. 2). Roche holds a revenue of over 47.7 billion Swiss Francs. In order to ensure quality and maintain its competitiveness across the globe, Roche has 80,000 employees who include 25,000 scientists (Hummer 2005, p. 17). The division of diagnostics and pharmacy work under one command which is a strategy in ensuring an efficient decision-making process and ensures that the products are analyzed at every step of production hence, ensuring quality. Weakness Roche holds the patent to drugs such as Tamiflu, however, the drug is massively produced in the developing countries and there are no efficient distribution channels which have made the company not to fairly utilize its patents (Hummer 2005, p.
22). In addition, Roche experiences a high cost of production which lowers its price competitiveness in the global market. Opportunities Indonesia presents a great opportunity to Roche; the country has been recording economic growth and has a population of over 250 million making a ready market for Roche.
High capital base and production of pharmaceuticals based on research will be key entry factor that Roche has capability in. According to Hearing (2005, p. 3), Roche diagnostic system is one of the best and has made it to be a competitive edge in the international market. Threats Roche faces stiff competition from other world leaders who already have distribution channels in Indonesia such as Aboot, Sanofi Aventis and Siemens. The market share in the pharmaceutical business is also limited due to patent products and generic drugs.
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