Jonathan Charles

Purdue University

MGMT 69000 – CAPSTONE SIMULATION

June 20, 2023

Executive Summary

International Business Plan: MediCorp Inc.

This report is intended to be a comprehensive business plan for MediCorp Inc., with a focus on their expansion into the medical device market in Argentina. This report is intended to assist MediCorp with its strategic decision-making process. It will guide them in their selection and penetration into the artificial heart valves markets in Argentina within the NAICS subsector 339113 (IBIS World, n.d.). The report will assess the challenges and opportunities associated with entering the medical device market in Argentina. The report will highlight the most important factors MediCorp should consider, such as market analysis, customer segments, competitive landscapes, regulatory environments, and financial forecasts. The report will present a recommended strategic approach that is aligned with MediCorp’s overall objectives, capabilities and outlines the steps necessary for success and growth in Argentina.

Artificial heart valves are the chosen medical device to expand MediCorp business operations and customer base for the international expansion. This vital healthcare technology is crucial in treating heart disease and improving the quality of life of patients. MediCorp hopes to diversify their product offering within the medical devices sector by entering the artificial heart valves industry. This will allow them to leverage their expertise in manufacturing genetic test devices. Argentina was chosen as the expansion target due to its expanding healthcare market, favorable demography, and growing demand for advanced medical technology (Gauvin et al., 2012). Argentina, as one of Latin America’s largest economies, offers an attractive market for MediCorp to expand. The country’s regulatory framework and commitment to healthcare makes it a favorable place for foreign investment in the medical devices industry.

MediCorp, Inc., a leading manufacturer in the field of genetic testing, is known for its dedication to innovation, reliability, and quality want to expand its business into the medical device sector. MediCorp’s goal is to gain a foothold in the artificial heart valves industry of Argentina and capture a large share of its growing market. The following sections dive deeper into analysis and strategy to provide a roadmap for MediCorp’s entry and growth within Argentina’s medical device market. MediCorp, by following the recommendations outlined within this report can maximize the opportunities offered by the Argentinean market and can acquire the market leader status in the medical device industry.

Marketing Strategy

This marketing strategy outlines MediCorp’s plan for expanding into Argentina’s medical device market, with a specific focus on introducing artificial heart valves.

Market Analysis

Selection of New Medical Device: MediCorp’s selection of a new medical device: Following a thorough evaluation, MediCorp identified artificial heart valves as the best medical device for the Argentinean market. The decision was made based on several factors, such as the growth in cardiovascular devices in Argentina, according to Mordor Intelligence. The artificial heart valves industry has significant growth potential due to the increasing prevalence of cardiovascular diseases and favorable regulatory environment. MediCorp, by focusing on this medical device can take advantage of the growing demand for cardiovascular solutions in Argentina and establish a solid foothold (Global Data, 202).

Main Competitors: MediCorp faces competition from a variety of companies in Argentina’s industry for medical diagnostics. Siemens Healthineers is a notable competitor, as are Canon, Medtronic and Tecme S.A. These companies are well-established in the market, and they offer a wide range of cardiovascular products including artificial heart valves. Siemens Healthineers, a prominent player in the medical device industry, reported total annual sales of approximately €21.7 billion (approx. $23.70 billion) with a global workforce of around 66,000 employees. Canon, operating in various industries including medical devices, reported revenue of $30.31 billion in 2022, and boasts a large global workforce of over 180,775 employees. Medtronic, another major player, reported total sales of around $31.686 billion USD in fiscal year 2021, supported by a workforce of approximately 95,000 employees worldwide. As for Tecme S.A., with revenue of $20.3 million. MediCorp needs to differentiate itself from its competitors by focusing on innovative features, superior quality, reliability, and superior customer service. MediCorp, by delivering these key aspects can gain an edge over competitors and establish itself as a trusted supplier of artificial heart valves (Global Data, 2022).

Market and Segment Growth: Argentina’s medical device market is valued at $5.8 Billion in 2021. Growth is expected to continue in the years ahead. The CAGR of Argentina medical device market is projected to be 1% during the 2022-2027 (Global Data, 2022). While the Latin America medical device market CAGR is 5.79% from 2022-2027 (Market Data Forecast, 2023). Artificial heart valves are expected to grow substantially in this market due to an increasing prevalence of cardiovascular disease and improvements in healthcare infrastructure. MarketDataForecast predicts that the demand for medical equipment in Latin America will also increase, which highlights the potential of MediCorp’s Artificial Heart Valves to capture a large share of the Latin American market. MediCorp’s strategy to capitalize on the growth of this market will be to target specific segments, including hospitals, cardiac centres, and healthcare facilities specializing on cardiac care. MediCorp will tailor its marketing to meet the specific needs and preferences for these segments to penetrate the market effectively and gain a large customer base (Market Data Forecast, 2023).

Value Proposition: MediCorp adds value to its customers by providing high-quality artificial valves with superior clinical outcomes. Its commitment to quality control, research and development and international standards, as well as its strict quality control measures and adherence, will ensure that the company’s products meet high quality standards. MediCorp differentiates itself by offering comprehensive customer support (Eatock et al., 2009). This includes training programs for health professionals, technical assistance and efficient after-sales services. MediCorp will gain a competitive advantage in the market by delivering a comprehensive value proposition. This will foster long-term relationships and trust with customers.

Recommendation for Relocation of Activities: Based upon Porter’s Value-Chain analysis, MediCorp may want to consider moving certain activities in its value chain from the United States over to Argentina. The manufacturing and assembly for artificial heart valves could be moved to Argentina in order to benefit from the skilled labor force and cost efficiency of that country, as well as its proximity to the market. This move will simplify supply chain operations and reduce transportation costs (U.S. Department of Commerce, 2022). It will also allow for faster responses to customer requests. MediCorp will also be more competitive by establishing local production plants, which demonstrate its commitment to the Argentinean market and allow for customizing products to suit local preferences.

Market Entry Strategy: MediCorp was given several options to enter the Argentina market. Exporting medical devices was one option. This could be done by using existing distribution channels. This approach had limitations when it came to adapting to the local market dynamics and regulations. MediCorp also could have created a fully-owned subsidiary that would give it complete control of operations and decision making, along with the ability to adapt strategies to local conditions. This mode, however, required a substantial investment in financial terms and a thorough understanding of the local market. The company can also establish a strategic partnership with an existing competitor in the area through a Joint Venture market entry strategy.

A joint venture with Terumo is the best option for MediCorp to enter the Argentinean Market. MediCorp must partner with a reputable player because of the unique characteristics of the Argentinean marketplace, such as cultural nuances and regulatory complexities. MediCorp will be able to tap into Terumo’s local expertise, connections and distribution channels through this joint venture. This will facilitate a smoother market entry and quicker penetration. MediCorp can combine its global product expertise with Terumo’s existing relationships and market understanding. This strategic partnership provides MediCorp with valuable insights into the market dynamics, customer preferences, and enhances its reputation, credibility and trust amongst healthcare professionals and potential customers in Argentina.

Potential Customer Characteristics

MediCorp needs to gain a thorough understanding of potential customers to effectively penetrate the Argentinean market with artificial valves. This analysis will provide insight into the healthcare landscape, demographics, and cultural nuances of Argentina. It will allow MediCorp tailor its marketing strategies and reach the target audience effectively.

Demographics: Argentina is home to approximately 45 million people, with a median age of 31 years. The aging population in the country presents a significant market opportunity for MediCorp, as the incidence of heart diseases, including valve disorders, tends to increase with age. The demand for medical devices, such as artificial heart valves, is expected to grow as the population continues to age (Global Data, 2023).

Healthcare Awareness and Accessibility: Argentinians are highly aware of their health and place a priority on it. The healthcare system in Argentina is robust and provides universal coverage for its citizens (Gnip et al., 2012). The country’s focus on healthcare has created a customer base that is open to new medical technologies and solutions for heart conditions (Maldonado , 2023). Argentinian customers are more likely to be informed about the treatment options available, such as artificial heart valves. They may also actively participate in their healthcare decisions.

For several reasons, it is crucial for a corporation to assess cultural differences around the world. Argentina is a culture of collectivism where family bonds and social connections matter a lot. MediCorp, recognizing the importance of family in making healthcare decisions, should develop marketing strategies which consider the extended family’s role and highlight the support system that artificial heart valves provide. Argentina also exhibits a medium power distance which highlights the importance of respecting medical professionals and authority figures. MediCorp’s collaboration with opinion leaders, doctors, and healthcare institutions can help build trust and credibility. A second important aspect is avoiding uncertainty since Argentina tends to prefer structure and guidelines that are clear. MediCorp must ensure that all product information, regulatory compliance, and support services align with local regulations and are transparent. This will instill confidence among potential customers.

Technological Readiness: Argentina has a highly developed healthcare sector with modern medical facilities, and professionals who are well trained. Customers are more likely to accept advanced medical technologies such as artificial heart valves. MediCorp’s products should be positioned as reliable and cutting-edge. They must also deliver superior clinical outcomes. The technologically savvy target market of Argentina will be attracted to the benefits and technological advances of the artificial heart valves.

Governance and CSR

MediCorp must have a complete understanding of Argentina’s cultural, legal, and ethical standards to enter the market successfully. It is important to adapt its operations to meet these standards (Jakovljevic et al., 2021).

Legal Standards

The legal framework in Argentina is a major factor that shapes the operating environment of foreign companies such as MediCorp. To avoid legal pitfalls and ensure compliance, it is important to understand and adhere to the laws and regulations of Argentina. MediCorp’s operations in Argentina are impacted by several key legal considerations. First, the approval process of medical devices needs to be followed with great care. MediCorp has to navigate registration requirements, licensing processes, and quality standards set forth by regulatory authorities, including the National Administration of Drugs, Food, and Medical Technology. It is important to comply with these regulations in order to receive the approvals and certificates needed to sell and market artificial heart valves (Rey-Ares et al., 2016).

Second, protecting MediCorp’s innovative technologies is essential to prevent their unauthorized use and imitation. MediCorp must engage a legal advisor to help ensure that trademarks and patents are registered properly and enforce any intellectual property rights if needed. The company’s advantage is protected and the risk of infringement on intellectual property is minimized. Understanding labor laws in Argentina is also important when it comes to hiring and managing staff. MediCorp’s commitment towards ethical employment practices is demonstrated by its compliance with labor standards. This includes fair wages, work hours, occupational health and safety regulations and other related regulations (Rey-Ares et al., 2016).

Ethical Standards

It is important to maintain a positive image of your company and build trust by operating ethically. MediCorp’s business practices must be ethical, covering areas like corporate governance, transparency, and anti-corruption. It is important to implement strong corporate governance practices to maintain transparency, protect shareholders’ interests and ensure accountability. MediCorp must establish compliance policies and a code that outlines ethical standards and guidelines for employees (Rezvova et al., 2023). It promotes ethical behavior and integrity throughout the organization. MediCorp must implement anti-corruption procedures and policies that are in line with best international practices to combat corruption. Adopting anti-bribery polices, due diligence procedures for business partners and transparent financial reporting are all part of this. MediCorp’s commitment to integrity and ethical values is demonstrated by its adherence to these standards.

Cultural Standards

Argentina is a country with a rich culture that has an impact on business and social interactions. MediCorp’s success in Argentina depends on its ability to understand and respect the local culture. Relationship-building is highly valued in Argentine business culture. For long-term and effective success, it is important to build trust and establish personal connections with key stakeholders such as healthcare professionals and distributors. MediCorp must invest in building strong relationships by networking, engaging local communities, and attending industry events (Gauvin et al., 2012).

In Argentina, face-to-face communication and personal interactions are highly valued. MediCorp must prioritize direct communication channels such as meetings and visits to build rapport and communicate its value proposition effectively. Localizing marketing material, including translations, and culturally relevant messaging, also demonstrates a respect for the Argentinean culture and improves communication effectiveness. Understanding and respecting the local customs, traditions and culture is also essential to building credibility and avoiding cultural misinterpretations. MediCorp’s employees should be trained in cultural sensitivity, so they understand local customs, communication styles, and etiquette. This awareness of cultural differences fosters good relationships with employees, customers, and business partners.

MediCorp’s operations in Argentina reflect the legal, ethical and cultural standards of Argentina. Compliance and operational success are dependent on adherence to Argentina’s laws. This includes regulatory approvals, intellectual-property protection, and labor laws. Corporate governance, anti-corruption and other ethical standards help to build trust and maintain positive corporate image. Respect for the local culture and customs enhances communication and builds strong relationships. MediCorp, by taking into account these factors, can successfully navigate the Argentinean market, establish itself, and create a sustainable, ethical operation in the nation.

Financial Projections

Market Share Estimates

Based on the analysis of the Argentina medical device market and the demand for artificial heart valves, MediCorp can aim to capture a significant market share. Considering the competitive landscape and the company’s value proposition, a conservative estimate would be to target a 10% market share in the first year of operations, with a gradual increase to 15% in the second year and 20% in the third year. These estimates consider market growth projections, customer demand, and the company’s positioning within the market (Mendoza, 2021).

Revenue Forecasts

To estimate revenue forecasts, it is important to consider the market size potential, the pricing strategy, and the projected share of the market. According to industry reports the cardiovascular devices market was valued at $5.8 Billion in Argentina in 2021. The projected growth rate for the next three year is 1%. Based on this projected growth rate, and MediCorp’s projected market shares, it is possible to estimate revenue:

Year 1: Assuming the MediCorp has a market share of approximately 5%, and a market size estimated at $5.8 billion in Argentina’s first year of operation, revenues are projected to be around $290 million.

Year 2: Due to an increase in market share and size of the market, MediCorp can expect its revenue to reach approximately $406 million.

Year 3: MediCorp’s revenue is expected to increase by approximately $522 million in the third fiscal year as it establishes itself and gains a greater market share.

The justifications show a thoughtful approach in forecasting revenue and share of market, considering factors like market size, growth rates, competition and MediCorp’s strategic positioning. The financial forecasts, which are based on industry data and take into consideration the company’s potential for growth in the Argentinean market, provide a realistic outlook of MediCorp’s revenue growth and expansion of market share in the next few years.

Strategy Implementation

MediCorp can use this comprehensive approach to assess the effectiveness of their strategy implementation and make any necessary adjustments to reach its goals.

Learning and Growth Perspective: MediCorp’s learning, and growth approach focuses on improving its knowledge and skills to achieve long-term success. The training and development of employees is a key factor. MediCorp must monitor training programs and initiatives that aim to improve the knowledge and skills of employees who are involved in manufacturing, distribution, and sales of artificial valves. It is important to provide employees with technical training to help them meet the needs of customers. This can include providing information on product, market, and cultural issues. MediCorp’s training program can be tracked to ensure its employees have the expertise needed to provide high-quality services and products (Rezvova et al., 2023). MediCorp must track its investment in research and development to ensure innovation in artificial valves. This entails monitoring the integration of new features into artificial valves, refining manufacturing techniques, and actively seeking collaborations with industry players and research institutions.

Business Process Perspective: This element encompasses a focus on internal processes. Key factors include manufacturing process efficiency, where MediCorp must monitor manufacturing cycle times, quality control measures, and cost optimization efforts to maintain operational efficiency while delivering high-quality artificial valves. By closely tracking these factors, MediCorp can identify areas for process improvement, streamline operations, and enhance overall productivity. Additionally, the efficiency of the supply chain is crucial to monitor (IBIS World, n.d.). This entails sourcing raw materials, managing inventory levels, and coordinating with distributors and suppliers to ensure a seamless flow of products. By monitoring these factors, MediCorp can optimize its supply chain processes, reduce lead times, and guarantee timely delivery of artificial heart valves to customers in Argentina (IBIS World, n.d.).

Customer Perspective: MediCorp’s customer perspective focuses on customer needs and value creation. Customer satisfaction is a key factor that should be tracked. MediCorp needs to monitor customer satisfaction and feedback levels via surveys and other feedback mechanisms to make sure that their products and services are meeting or exceeding customer expectations. MediCorp, by tracking customer satisfaction levels, can identify areas of improvement, respond to customer concerns quickly, and improve overall customer experience. This will build strong customer loyalty. Market share is another important factor to be monitored. MediCorp must monitor its market share on the Argentine market for medical devices, and specifically in the segment of artificial heart valves (Eatock et al., 2009). It is important to monitor market trends, competitor dynamics and customer preferences to identify growth opportunities. MediCorp’s ability to track market share allows it to assess its competitiveness, make strategic decisions and implement targeted sales and marketing strategies in order capture a greater share of the market.

Financial Perspective: Financial element such as profitability is a key factor to monitor. MediCorp must monitor the growth of revenue, gross margin, and profitability to evaluate its financial success. It is important to compare projected revenue, pricing strategies and cost management with actual performance. MediCorp, by tracking these financial indicators can identify areas of cost optimization, price adjustments, and revenue enhancement to ensure sustainable growth. Return on Investment (ROI) is another important factor to consider in the financial aspect. MediCorp must track its return on investment in Argentina by considering the costs of market entry, marketing, and infrastructure developments. MediCorp, by monitoring ROI and making data-driven decisions for optimal returns and resource allocation, can evaluate its investment and the effectiveness in the Argentine Market.

Conclusion

The international business plan of MediCorp for its expansion into Argentina’s market for medical devices presents a comprehensive approach to success. MediCorp’s ability to navigate the market is a result of its careful analysis of the characteristics of the potential customers. It also considers the cultural differences of other countries and the legal, ethical, and cultural standards that apply. The marketing strategy is centered on selecting the right medical device, identifying key competitors, projecting growth in market segments and markets, and highlighting MediCorp’s competitive advantage.

Artificial heart valves are a product that is in line with market demand and offers a great opportunity for growth. MediCorp is also able to increase its market penetration through the strategic alliance it has with Terumo. This local company provides valuable expertise and a strong network. MediCorp will be able to establish a strong position in Argentina by leveraging Terumo’s market knowledge and established network. The analysis of ethical, legal, and cultural standards highlights the importance of corporate governance and cultural sensitivity.

These standards are essential to ensuring operational success, but they also help build trust and promote a positive image of the company. The financial projections are based on the size of the Argentine market for medical devices. They estimate the market share and growth in revenue over the next 3 years. MediCorp’s projected revenue figures are based on the market dynamics and its competitive positioning to provide a realistic view of its financial performance. This international business plan provides the basis for MediCorp to expand into Argentina’s market of medical devices.

This plan combines a deep understanding of the customer, a solid marketing strategy, strategic partnerships, compliance with legal and ethical standards and accurate financial forecasts. MediCorp’s plan can be executed effectively, while monitoring its progress. This will allow MediCorp to seize opportunities and overcome challenges in Argentina.