A Medical Equipment Companies Global Expansion, Three Potential Countries

The three countries I have identified for further consideration and expansion into them is China, Japan and Canada.

China is a good prospect because it is ranked 11^th as the fastest growing medial import market in the world. China "Imports account for approximately 50 percent of China's USD 2.5 to 3.0 billion medical device market." (Gettman and Decker, 2004, Section A.5.) Canada was another good choice because of the relative closeness to the United States, the Free Trade Zone, and the country ran health care system. Japan is my third choice, I choose Japan because of the desire from the people to be "Amercian" and they are the 2^nd largest importer of Medical products to their country. (Gettman and Decker, 2004, Section A.5.) Below is table outlining the risks and opportunities of each country I have chosen.

China - Risks

"Most Chinese, as many as 85 percent, lack health insurance and only 1 to 2 percent of the population can afford Western standard medical care." (Gettman and Decker, 2004, Section A.5.)

China - Opportunities

"China's market for imported medical device is growing at about 10 to15 percent annually." (Gettman and Decker, 2004, Section A.5.)

Canada - Risks

PM Medical equipment may not be fully covered under the Canada's National Health Care system.

Canada - Opportunities

The Free Trade Zone allows PM to do business in Canada without having to worry about import tariffs.

Japan - Risks

Japans import traffics, and as a established westernized country, this country will have greater market share competition.

Japan - Opportunities

Japan is the 2^nd largest importer of Medical Equipment (Gettman and Decker, 2004, Section A.5.)

In addition to the above opportunities mentioned, the following data is another important opportunity we must consider.

Japan is rank 6 as to the life expectancy at birth (years) with the average life expectancy at 81.15 years. Canada is rank 12 at 80.10 years, and China is rank 107 at 72.27 years. (World Fact Book, 2005)

Let me identify the culture, politics, economics, legal and technology of each country so we can fully understand how we must do business in these countries.

China

China is still considered to be a developing country with many customs we must consider before doing business in this country. For instance we must consider Chinese Holidays such as the Chinese New Year and May Day. The word "No" is never considered, a "maybe" means no. This in turn means you should never say "No" as well. (Executive Planet, China Business Culture)

Negotiations are followed in a strict format. "In accordance with Chinese business protocol, people are expected to enter the meeting room in hierarchical order. For example, the Chinese will assume that the first foreigner to enter the room is head of the delegation." (Executive Planet, 2005, China) Only senior members of the group as expected to lead the discussion, interruptions are considered to be rude. (Executive Planet, 2005, China) We need to be prepared to make several trips to china before establishing a relationship with a company. The Chinese do business in the sense of long term relationships. Gift giving is considered to be an act of bribery, if done it so be done on a personal nature instead of a business nature and done in private. (Executive Planet, 2005, China)

Many of the major cities are very westernized, however we can expect that the rural areas are still very undeveloped. (Marcus, Susan, CTU online chat) This is what makes China such a great country to expand to.

Japan

Japan is a very business oriented country, their standard work week is 48 hours without overtime. We should avoid doing business during the week of April 29^th to May 5^th for this is a national holiday. (Executive Planet, 2005, Japan)

"Gift-giving is an important part of Japanese business protocol. Moreover, gifts are exchanged among colleagues on July 15 and January 1 to commemorate midyear and the year's end respectively." (Executive Planet, 2005, Japan) In addition, during negotiations we need to "describe how your product can enhance the prosperity and reputation of the Japanese side. Making these claims effectively requires a thorough knowledge of Japanese economy, business, and product lines." (Executive Planet, 2005, Japan)

Unlike the China culture, in Japan "If the response to your question is "maybe", "probably", or "I'm thinking about it", the answer is likely to be "yes." "I'll consider it", however, is often indicative of a "no."" (Executive Planet, 2005, Japan)

With Japan being the 2^nd largest importer of medical supplies and goods, and with the average life expectancy of 81.5 years, this is what makes Japan such a good country to expand to.

Canada

When doing business in Canada it is important to remember that although they are neighboring country, they are officially bi-lingual of French and English. We will need to be prepared to have any marketing materials prepared in both French and English. (Executive Planet, 2005, Canada)

When dealing with Companies in Canada, you will notice that they will try to set them selves apart from the United States, however in dealing with business aspects, we can expect similar to that of the United States. (Executive Planet, 2005, Canada) In addition, perfume or heavy aftershave is considered to be a cover up of poor hygiene and is banned from many doctors' offices.

United States Comparison in Selling

Many of the business cultures between Canada and the United States will be the same, it is important that are sensitive to Canada's desire to set them selves apart from the United States. (Executive Planet, 2005, Canada) In both Japan and China, it is going to be important that we recognize the status of the elders in the corporation and be prepared to have senior members of the company travel to these countries to participate in the negotiations. It is also important that in both Japan and China, that maybe, we'll see and can mean no in China and yes and Japan. In addition, we will need to research more data about import tariffs regarding importation of our products to these countries. Canada is in the Free Trade Zone.

References:

Gettman, Matthew, and Decker, Stephanie, July 2004, The U.S. Embassy, Beijing "CHINA COUNTRY COMMERCIAL GUIDE FY 2004 (July update)", "A Guide to Doing Business in China &Information on Current Economic Conditions" [Electronic Version, retrieved on November 18, 2005 from http://www.export.gov/china/exporting_to_china/faq.asp#tariff

World Fact Book, November 2005, "Rank Order - Life expectancy at birth" [Electronic Version] retrieved on November 18, 2005 from http://www.cia.gov/cia/publications/factbook/rankorder/2102rank.html

Executive Planet, "China Business Culture", [Electronic Version] retrieved on November 18, 2005 from http://www.executiveplanet.com/business-etiquette/China.html

Executive Planet, "Japan Business Culture", [Electronic Version] retrieved on November 18, 2005 from http://www.executiveplanet.com/business-etiquette/Japan.html

Executive Planet, "Canada Business Culture", [Electronic Version] retrieved on November 18, 2005 from http://www.executiveplanet.com/business-etiquette/Canada.html

Marcus, Susan, CTU Online chat, November 16, 2005