Alexis Solis Cancino

Global Strategy

000130502

AFTER THE BRICS WHAT NOW?

1. Introduction
Gary Halberd, CEO and founder of GENICON, a United States manufacturer and
distributor of medical devices for laparoscopic surgery, had one major concern near the
end of the year 2014: which international market should his company expand to. He had
previously tried to expand to the BRIC countries (Brazil, Russia, India and China), with
somewhat dubious results in two of the countries and great results in the other two. The
greatest challenge to the company now was figuring out which market it should enter
into and whats the best method to do so.

2. Problem Statement
Knowing which market GENICON should enter into is difficult, for it must gather a great
deal of information regarding taxes and tariffs, government regulations, matters related
to corruption, exchange rates risk, and other barriers it might encounter in each country.
However, it is key for GENICON to choose the right country if it wants to continue
growing.

3. Analysis
3.1 Should GENICON expand to new and emerging markets?
Should GENICON even consider expanding to new emerging markets? Or should it
focus its efforts on increasing market share in its existing markets? The most probable
answer is that it should choose to expand. There are several reasons supporting such
answer:
1. The companys success appears to come from its international expansion
strategy.
2. International, emerging markets are expected to have a greater growth in terms
of minimal invasive surgery than the United States (GENICONs main market).
China is a great example of such phenomenon.
3. Its current markets demand could begin to decelerate (like the United States did)
or new government regulations could cause a growth deterioration.
4. Expanding towards other markets alleviates the companys exposure to risk in
terms of each countries conditions.
5. Laparoscopic surgery has many advantages and therefore, many countries
should want to have access to it. Being the first mover into a market that

Alexis Solis Cancino

Global Strategy

000130502

competitors havent explored yet could result in astonishing growth for the
company should it turn out to be a right choice.

3.2 Which country should it choose? Guidelines to a good choice.

GENICON should first do a proper analysis of the most promising countries in terms of
growth demand for laparoscopic surgery. GENICONs choice will determine its possible
gaining of advantages against its competitors, growth and costs of entry. Therefore, it is
of the uttermost importance to make the right choice.
There are some key aspects that a country should have in order to be a potential great
market. Some of them might be:
Choose a fast country in terms of population growth.
Choose a country in which importation in medical devices has increased during
the last few years.
Choose a country that faces a deficit in terms of medical infrastructure, causing its
government to react and aid the company to expand to such country.
Choose a country that has no fragmented healthcare system (i.e. almost all of the
population should have access to good medical aid) but is in need of innovation
and high-quality products and procedures.
China and India provide very good guidelines in terms of choice, since both countries
resulted in amazing results for the company. GENICON should extract the main features
that aided such results from each country and try to look for that in other potential
markets.
Additionally, GENICON should search for what it is not looking for in a country (adverse
conditions). Some of these might include:
Countries with potential political instability or protectionism approaches to
international trade (such as Venezuela, for example).
Countries that require too much investment and government involvement into
their healthcare system thus making a sustainable growth impossible.
Countries that have shortage of medical personnel and human resources leading
to unsatisfactory results. (Mexico is an example of such a problem)
Countries that do not have patent protection.
Finally, a key aspect to choosing the right country is the method of entry. Should it enter
into the public sector? Or is it easier to enter via the private sector?

Alexis Solis Cancino

Global Strategy

000130502

3.3 What about a MIST expansion after the BRIC expansion?

An interesting solution to narrowing down the decision is considering the successors of
the BRIC countries: the MISTs (Mexico, Indonesia, South Korea, and Turkey). All four
countries have experienced fast growth during the last 20 years, and they all have
benefited from benefit from the globalization of companies. According to 2012 data from
the OECD, the average growth was 4.9% for South Korea, 4.6% for Indonesia, 4.2% for
Turkey, and 2.6% in Mexico during the years of 1993-2011. Furthermore, the sum of their
GDPs would represent the fourth largest economy in the world, only after the USA, China
and Japan.

Source: Bloomberg

4. Recommendations
In order to make a good decision, GENICON should explore quantifiable measures (e.g.
governments expenditures on healthcare as % of the GDP) and qualitative measures
(such as corruption levels). GENICONs main concerns should be its potential growth in
such country, the potential barriers of entry, the potential competitors and finally, its
entering strategy. GENICO has demonstrated a great ability to expand since it showed
exceptional adaptation skills as seen during its European Union and BRICs expansions.
To continue flourishing it must apply these abilities combined with a healthy
environment for healthcare products companies.
The possibility of a MIST expansion after the previously successful BRIC expansion is an
attractive solution. Furthermore, an expansion to such countries could present similar
conditions to the ones BRIC countries had, and GENICONs experience could make it a
easier process.