Genicon: A Surgical Strike into Emerging Markets - Assignment Example

EVALUATING GENICON’S CASE STUDY Question Since its debut, GENICON has been able to achieve commendable results. It has managed to acquire international markets. Owing to the fact that the local market is flooded, GENICON has established four markets that are considerably potential. These markets are: China, Brazil, china and Russia. Am going to analyses the four markets and establish the one that makes sense with respect to only quantitative variables. As such am going to compare financial measures such as market, population, government and economic status. This will help me to gauge the relevance of the four markets concerning GENICON. Although it has been a tough road, the small company has managed to achieve what many starters would not. The genesis of this company has been estimated to be in year 1996, where Haberland and a group of developers negotiated on a deal that would see them venture on the production of laparoscopic medical devices. This is a new market, while it is arguably true that there was going to be a profitable result. There are barriers that would pose threats, Haberland and the team members were hesitant at the first time. This would be the same to any company considering that there was a large investment that would be required (Kupetz, Allen & Tinndal pg 2). International markets have over the years helped many firms to be successful and generally meet their intended targets and/or goals. Between the listed international markets in the work of: Allen H. Kupetz, Adam Tinndal and Gary Haberland. I have chosen four markets (India, china, Brazil and Russia) Based on a critical quantitative analysis, these markets are arguably the right ones for GENICON. Although there may be some barriers, there are equal opportunities of a healthy investment. For instance, India has a large population; additionally this population is estimated to grow in the coming years (Kupetz, Allen & Tinndal pg 4). In fact, there is statistical evidence that this population will surpass china by 2050. India is a growing economy; there is an estimated increase in GDP as from year 2008. The Indian market is made up of two categories. These are the public and the private sector. Owing to the fact that the is an increasing population, it is arguably true that there is going to be a huge burden with respect to provision of adequate health services in the public sector. This leaves the private sector with the duty of provision of adequate medical services. With the increasing economic development, an emerging middle class seem to be in a position of accessing high quality medical services. Although the larger market is at the public sector, the private sector still presents a profitable venture (Kupetz, Allen & Tinndal pg 5). Owing to the new measures by the Indian market to enhance the public health sector, there is definitely a promising market in India. On the other hand, China presents a rather similar market compared to India. Statistics presents china as from year 2010 as the fastest growing economy. There are an increasing number of entrepreneurs, unlike the Indian environment. China has managed to lift many poor citizens to successful entrepreneurs. China’s health care system has experienced some shakeups, as evident in year 2003, when there was an outbreak of the severe acute respiratory syndrome (SARS). This outbreak has caused mixed reactions from the public and the private sector. The private sector has benefitted from this incidence due to the unpreparedness of the Chinese government, where they would often maximise their efforts on the unattended markets (Kupetz, Allen & Tinndal pg 6). The health sector in china is estimated to be worth $12.6 billion as from year 2008; this figure was accepted to double since there is an increasing rate of ageing persons and an improving economy. As such this market is arguably a profitable venture and will benefit the firm in question. The Brazilian economy also presents a relatively profitable opportunity for GENICON, though with some barriers. This economy has at one moment been placed as one of the largest, globally. This case is attributed to its rich abundance of agricultural and mineral sources. Additionally, the discoveries of the onshore and inshore oil fields have made this nation a giant in the oil sector. As such, the inclusion of these factors has encouraged a vast number of investors to the Brazilian economy. The Brazilian economy heavily relies on public spending; as such there is enormous spending from the public. This scenario is attributed to the credit boom, although this factor caused a negative impact during the 2009 recession. There are many aspects to learn from it. Of late Brazil has had a relatively faster population growth rate. As such, the government has raised its commitment to provision of adequate health services. Viewing this case with regards to statistical evidence, it is evident that the medical device market has risen from the $1.67 million mark in year 2006 to the $2.88 mark in year 2013. After the 1998 economic crisis, the Russian economy has been considered a suitable place for investment. This case is attributed to the Soviet’s union collapse among many other factors. This case has caused a lot of stability since the economy rebounded with respect to high commodity prices and other factors like the currency devaluation. The Russian economy has had many changes over the years; this case is attributed to its dependence on the oil sector (Kupetz, Allen & Tinndal pg7). The changes that have been witnessed in the energy sector have led to impeding the economy The Russian government has expressed a lot of concern with respect to enhancing medical services to its citizens. In fact, there has been modernisation of a vast majority of health care systems, where many finances have been directed to this sector. Conclusively, analysing the four markets is best addressed using the economy and the sustainability of the adjacent economies. Additionally, other factors such as the population are very crucial with respect to identifying the right market for GENICON. Question 2 Ease of doing business, culture and corruption It is arguably true that the four markets have a varying potential with respect to: ease of doing business, culture and corruption. As such, there arises a need that demands for a critical analysis before placing a particular economy in the potential market list or even investing in it. To start with, Russia offers a relatively fair environment to foreign investors. This is the case since Russia is a growing market especially in the health care sector. Russia has a relatively huge network of health institutions. In fact, the statistics have brought forward a whooping 10000 institutions. As such, this nation offers relatively large market that is suitable for foreign investors. Various statistics have presented this nation as being fairly corrupt; one notable case is the one presented by transparency- presents Russia as having a corruption index of 2.2 (2009 corruption index, 2010). According to this statistic, these organization 8 independent surveys have backed up this argument. Doing business at Russia is entails a variety of factors, these factors include: paying taxes, trading across borders issues, enforcing contracts, getting electricity, registration permit and the level of investor protection. According to the World Bank, these nation surfers in electricity provision, credit acquisition, and trade related factors. As such businesses should check these factors before choosing these markets (Ease of Doing Business in Brazil, 2014). India presents an environment that is relatively fair for investment. This is attributed to the fact that the regulation standards are favorable for investors. In fact, by year 20,000, there was an increase in the regulatory standards; this adjustment did not pose a significantly huge threat towards investors. This factors has however been impeded by the resources available for sustaining businesses. In fact, according to the World Bank, India has been placed at position 179. According to this report, there are a lot of challenges that are involved when starting a business at this location. Additionally, there are energy related problems and contracts acquisition. Culture is seen in a variety of dimensions, it can be addressed with respect to the citizens and the business environment culture (Kupetz, Allen & Tinndal pg 7). The beliefs, customs and art of the Indian people have relatively huge impact to investors. This does not affect all sectors but a select few. This is the case as there are some services and/or products that are not permitted in this market. Although there are some limitations the provision of medical services has not been affected. The corruption rate in India has heavily impeded business operations in the nation. In fact, this has extended to the citizens, where it is estimated that at least 62% of the citizens have bribed their way out. China provides a rather strict environment; practically there are many permits that are need in order for a particular business to have permit in this nation. The regulatory framework is placed in such a way that only larger and more efficient firms are accepted into the system. Additionally, there are many permits required before acquiring a license. Practically foreign investors are required to have a lot of permits in critical areas like the construction sector. Tax related issues also impact negatively towards foreign investors. The States Food and Drug Administration (SFDA) is mandated to introduce measures that ensure that there only efficient products in the Chinese market. Additionally, other factors such as the culture and corruption rate are considerably at a lower level and therefore do not present a big impact with respect to international investors (Ease of Doing Business in Brazil 2014). According to the World Bank, the nation is placed at position 158, a figure that clearly shows that this nation offers a rather negative environment for investment. Lastly, Brazil on the other hand is offers a friendly environment to international investors. This case is witnessed at the initial phase of the economic growth. Recently the fragmentation of some key sectors in the economy has brought about a negative impact towards the international investors. One notable case is in the medical sector, where there is fragmentation that has caused an enormous challenge to foreign investors. Although this is an arguably negative factor, there is an enormous growing market in Brazil (Kupetz, Allen & Tinndal pg 8). The World Bank has placed this nation at position 123; this is a commendable position with respect the four nations. Energy related matters have been catered for and there are healthy mechanisms that protect foreign investors. Additionally, culture and corruption does not heavily effect business operation. As such, this is a relatively favorable environment for investment. Conclusively, the Russian market presents a friendlier environment and is therefore more sensible. Question three According to my analysis, I will place Brazil the best place for GENICON. This is the case since this market presents a favourable environment. The regulatory capture, culture and corruption rate is at a level that highly favours foreign investors. Though the other markets present an attractive environment, it would be a huge risk to invest in these nations. Additionally Brazil, I have placed Brazil at the second position. Since it offer the right conditions for foreign investment. The question whether GENICON should concentrate on other markets or concentrate on the ones that have been already identified is best addressed by the performance registered in these markets. I still hold that GENICON should first maximise on this markets and later advance to others. Practically, GENICON should first maximise its efforts on the four markets in this order: Russia, Brazil, India and china. GENICON size and the entrepreneurial spirit have a huge role with regards to the selection of markets. Practically, it cannot go for markets that present an enormous risk compared to the size. While it may have a relatively high entrepreneurial spirit, there are markets that pose a greater threat with respect to venturing and the firm’s size. Works cited Kupetz, Allen H, Adam Tinndal , and Gary Haberland. GENICON: A SURGICAL STRIKE INTO EMERGING MARKETS . canada, london: The University of Western Ontario, 2010. Print. "Ease of Doing Business in Brazil" Doing Business, world bank.web 2 April 2014 "2009 corruption index" transparency,transparency international, n.d web 2 April 2014 Read More