International Business and Globalization: Pharmaceutical Organization

Introduction

In today's ever globalizing economy, global managers must utilize specific skills in order to navigate and overcome the cross-cultural situations which affect international business practices. Dependant upon the situation, both native and expatriate managers can be qualified to handle these cross-cultural challenges(Centre for Economic Policy Research, 23-104).

There are a plethora of cultural differences that can have an affect on how business is done internationally. These differences can be any number of actions that we take for granted when interacting in one's own culture. Every culture has deep structures built upon religious, social and ethical values which will influence the way in which another will reason and react as well as how they will listen or what they will expect from us (Centre for Economic Policy Research, 23-104)

Pharmaceutical Organization

ABC pharmaceutical firm is a small Asian firm in China; the firm has its own factory which 200 workers factory. The company currently developed some valuable new medical products using its unique biotechnology expertise. The top managers of the firm want to expend the market and decide how to best serve the European Community market (Robert, 45-59). The company has three options:

Manufacture the product at home and let foreign agents distribute and sell the product in the European market; manufacture the product at home and set up a wholly owned subsidiary in Europe; and enter into a strategic alliance, that is a joint-venture with a large European pharmaceutical firm. The product would be manufactured in Europe by the 50/50 joint venture and distributed and marketed by the European firm(Commission on Global Governance, 25-78).

Ultimately, they decided the first option, manufacture the product at home and let foreign agents distribute and sell the product in the European market (Barlow, and Clake, 45-78).

As a new expansion company, doing exporting is easy and save cost. Furthermore the company manufacture the product at home can protect its unique biotechnology expertise and using European distributor can enter the market rapidly, save time and cost to build up wholly owned subsidiary.

Organizational structure

The ABC structure of selling product to European market as below procedure:

The Asian firm can undertake their own production as to prevent leakage of new technology to competitors, local or foreign. Hence, compared to wholly-owned subsidiary and joint venture, exporting seems to be a more suitable option.

Those new medical products could be exported to the European market via internal export department of the firm or by engaging a local exporting company/agent (Centre for Economic Policy Research, 23-104)

In order to reduce transaction cost and commitment, the firm could get in touch with foreign importers to distribute their products to those respective European distributors.

These foreign distributors would then distribute those medical products to the consumers of the European market.

Analysis of European market

The European medical image management market is going through a phase of evolution. The focus seems to be shifting toward communication and clinical involvement since the picture archiving and communication system (PACS) is now considered the way radiology is practiced.

"The next few years ...