Entering The Indian Healthcare Industry Market Essay Samples
Since the second half of the previous century the process of globalization is actively developing, integrating the economies of the world together. Being ready and willing to reach the international level, companies are seeking to enter foreign markets. The main purpose of this article is to find the most appropriate entry method for a company that specializes in health technologies. This paper is with a particular focus on entering the Indian market.
The key question addressed is what model of entering a foreign market will be the most suitable one for the company, taking into account statistic data regarding the market size of the Indian healthcare sector, figures regarding exports and imports, and opportunities and prospects of this industry in India.
The most important information in this article is that the Indian healthcare industry is experiencing dramatic change. It is one sector in India which has demonstrated impressive business initiative in the last few years. The various areas and sub-sectors such as pharmaceutical, life science, biotechnology, medical infrastructure, and diagnostics within the healthcare industry are the fields of significant importance in attracting foreign companies to the country. According to the study of the U.S. Commercial Service (2013), "The Indian healthcare industry was estimated at around $78 billion in 2012 and expected to reach $280 billion by 2020, on the back of increasing demand for specialized and quality healthcare facilities".
Therefore, there are several main inferences in this article. The fundamental conclusion concerns a matter of opportunities and prospects of entering the Indian healthcare sector. Statistic data published by the United States Census Bureau demonstrates that the proportion of imports from the U.S. in this sector is increasing year over year. In fact, the amount of imports from the U.S. is estimated to increase from 454 million dollars in 2011 to 604 million dollars in 2014.
The key concept we need to understand is that entering the Indian healthcare industry is a very advantageous and promising business. As of today, one of the areas with the most favorable opportunities for U.S. healthcare and health technology companies is a proper supply of medical equipment, consumables, and expendables. The study of the U.S. Commercial Service (2013) reports that "several leading U.S. purveyors of hospital equipment and supplies have opened Indian operations to cater to this growing market". What is more, U.S. companies can also make their outstanding contribution in medical care insurance and hospital administration.
The main underlying assumption is that although entering the Indian market seems very easy, future-oriented, and attractive, one should always keep in mind that there are trade regulations and barriers, customs and standards that have to be observed. According to the study of the U.S. Commercial Service (2013), "The Indian government has identified 109 commodities that must be certified by its National Standards body, the Bureau of Indian Standards (BIS)". Although the intention behind such measures is to ensure the quality of goods being imported to the country, many countries utilize such certifications as trade protectionist measures.
If we take this line of reasoning seriously, the implications are that entering the Indian healthcare industry market should be elaborated and carefully thought-out. The main decision to be made is what entry model is the most appropriate for the company, take into account all the information about the marketplace to be entered, the timing of entry, and scale and nature of such entry.
According to Hill (2014), there are six basic models of entering a foreign market: exporting, turnkey projects, licensing, franchising, joint ventures and wholly owned subsidiaries.
Having in mind all the information collected from the commercial guide, international joint venture is most likely to be the most appropriate and reasonable model of entering the Indian healthcare industry market. International joint ventures are most commonly equity-based companies that are owned collectively be two or more independent firms. The peculiarity of such model is that one or more of the parent companies are non-residents in the host-market. The fundamental reason why companies set up joint ventures is clearly access to new technology, distribution channels, core competences or management skills. Such model also provides opportunities to have access to local partner's knowledge. What is more, joint ventures also allow sharing of development costs and risks and are politically acceptable in any foreign country. Another significant benefit of an international joint venture model is that the company is allowed to deploy resources across many national markets at the same time. On the other hand, sometimes the company may lose control over technology and managerial know-how because of the functioning complexity problems of joint ventures. Moreover, any international strategic joint venture , in general, is much more difficult to be managed than any other model of international business.
If we fail to take the line of reasoning seriously, the implications are that we will not comprehend the broad picture of the Indian market situation and, therefore, will not be able to make adequate judgments and take right decisions regarding its entering.
The main points of view presented in this article are the openness, prospectivity, and long-term benefits of entering the Indian market, as India’s economy is gradually being altered and restructured by highly entrepreneurially-inclined and rapidly globalizing private sector of the country.
1. Hill, C. (2014). Entering Foreign Markets. In Global business today (8th ed.). New York: McGraw-Hill Irwin.
2. Doing Business in India: 2013 Country Commercial Guide for U.S. Companies. (2013). Retrieved January 9, 2015, from http://www.export.gov/india/marketresearchonindia/index.asp
3. Paul, R., & Elder, L. (2009). Miniature guide to critical thinking: Concepts and tools (6th ed). Tomales, CA: The Foundation for Critical Thinking.