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Advice You - Globalization and the Death of the Mid-sized Company
If you own or work in a mid-sized company then you probably know of a global competitor in your back yard. If globalization hasn’t come to your part of the world yet, then you had better brace yourself. It’s coming!
As recently as a few years ago, domestic mid-sized companies play
As recently as a few years ago, domestic mid-sized companies play
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
ed by the same rules. They enjoyed similar access to markets, comparable cost structures and common political pressures. In fact, many mid- sized companies dominated domestic markets only because global competitors couldn’t get here. Now, there is nowhere to hide.
The internet, em
The internet, em
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
ail, overnight delivery and the opening of domestic markets has changed the game. Today, even the smallest company can face global competition. The formerly inaccessible mid-market represents the soft underbelly of American business and a great opportunity for offshore mid-size com
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
panies to grow. And, as they grow mid-sized companies will either adapt or die.
In fact, global companies are already competing in a number of areas that you might not expect. For example, offshore tax preparers are competing in the domestic accounting industry. In retail, big box
In fact, global companies are already competing in a number of areas that you might not expect. For example, offshore tax preparers are competing in the domestic accounting industry. In retail, big box
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
retailers are partnering with international consumer goods manufacturers and redefining the mid-market retail industry.
As this trend continues on the heels of the next wave, Knowledge Process Outsourcing, we will see the least effective and efficient mid-size companies disappear
As this trend continues on the heels of the next wave, Knowledge Process Outsourcing, we will see the least effective and efficient mid-size companies disappear
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
. We will see global competitors deliver high quality and low cost products to our front door, and we will see more services being sent offshore.
If you are planning for your company to succeed as global competitors raise the stakes, then there are some Cold Hard Facts you will ne
If you are planning for your company to succeed as global competitors raise the stakes, then there are some Cold Hard Facts you will ne
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
ed to accept:
Cold Hard Fact #1 - the playing field is no longer level. Global competitors play by different rules set in their own geographical regions so not only do many of them have lower labor costs, but they also have fewer government controls giving them an additional cost
Cold Hard Fact #1 - the playing field is no longer level. Global competitors play by different rules set in their own geographical regions so not only do many of them have lower labor costs, but they also have fewer government controls giving them an additional cost
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
dvantage.
Cold Hard Fact #2 – in the future you will have less time to react to your competitors. Geographic distribution makes it harder to keep your eye on the global competitor. If they are test marketing a new product, then you may never know until it shows up in your back yar
Cold Hard Fact #2 – in the future you will have less time to react to your competitors. Geographic distribution makes it harder to keep your eye on the global competitor. If they are test marketing a new product, then you may never know until it shows up in your back yar
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
d.
Cold Hard Fact #3 – they know more about you than you know about them. Generally, American mid- size businesses are far less familiar with international markets and cultures than international mid-size companies are with the US.
Cold Hard Fact #4 – global competition will turn
Cold Hard Fact #3 – they know more about you than you know about them. Generally, American mid- size businesses are far less familiar with international markets and cultures than international mid-size companies are with the US.
Cold Hard Fact #4 – global competition will turn
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
up the heat domestically. As domestic companies in the mid-market adapt to global competitors the domestic companies will become increasingly more competitive in their local markets.
So, what can you do?
1. Develop a global view of your company and industry:
Broaden your compet
So, what can you do?
1. Develop a global view of your company and industry:
Broaden your compet
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
itive horizon – the world really is your oyster
Learn how global competition is impacting your industry – see what’s going on over there wherever over there is
2. Compete as you would with any other competitor:
Understand what drives your customers
Look for opportunities and in
Learn how global competition is impacting your industry – see what’s going on over there wherever over there is
2. Compete as you would with any other competitor:
Understand what drives your customers
Look for opportunities and in
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
novate wherever you can
Compete head-to-head or create alliances where it makes sense
An experience with a former client (we’ll call him Jim) in the contract manufacturing industry illustrates the point. About ten years ago he began to notice that small international manufactures
Compete head-to-head or create alliances where it makes sense
An experience with a former client (we’ll call him Jim) in the contract manufacturing industry illustrates the point. About ten years ago he began to notice that small international manufactures
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
were showing up more frequently as competitors.
Seven years ago he decided to take a trip to China and toured several regions noted for manufacturing. He was shocked to find state of the art facilities and equipment – much better than his own. What was more astonishing was that t
Seven years ago he decided to take a trip to China and toured several regions noted for manufacturing. He was shocked to find state of the art facilities and equipment – much better than his own. What was more astonishing was that t
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
he facilities were sitting with 40 – 50% unused capacity. He noticed that the labor rates were 25% of what the standard US rates were at the time, and that the government imposed few regulations on local business.
For Jim, the handwriting was on the wall. Since that trip to China,
For Jim, the handwriting was on the wall. Since that trip to China,
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
he has radically repositioned his business. He did three things:
Improved his business processes and removed all excess cost
Developed an offshore relationship with a Chinese manufacturer
Identified where he could not compete on price and sent that business offshore for a small
Improved his business processes and removed all excess cost
Developed an offshore relationship with a Chinese manufacturer
Identified where he could not compete on price and sent that business offshore for a small
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
profit margin
Today he sends 50% of his business offshore at a more than acceptable margin for merely managing the relationship, and now his shop only works on higher end, time sensitive jobs that can’t be sent off shore.
In fact, some business that is initially targeted to go of
Today he sends 50% of his business offshore at a more than acceptable margin for merely managing the relationship, and now his shop only works on higher end, time sensitive jobs that can’t be sent off shore.
In fact, some business that is initially targeted to go of
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
fshore gets referred to Jim’s shop because of last minute changes or convenience. As a result, his business has flourished while many of his domestic competitors have disappeared. The company is more profitable today than it ever has been and Jim has become a key player in providin
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
g companies with quality offshore contract manufacturing options.
Remember, the very nature of business is competitive, and the key to competing well both globally and domestically is to simply see what’s coming your way and adapt. This simple principle works whether your competit
Remember, the very nature of business is competitive, and the key to competing well both globally and domestically is to simply see what’s coming your way and adapt. This simple principle works whether your competit
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
or is another mid-sized company from across the globe or a local competitor that is moving into your city. Embrace this principle...and your business will flourish in the new competitive environment.
Strategic Growth Advisors can help. By using our approach to address your specifi
Strategic Growth Advisors can help. By using our approach to address your specifi
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
c competitive issue we can position your company to successfully address any developing competitive threat. We begin with a Strategy Day, continue with a Performance Tune-up and conclude with a Strategic Plan that positions you to flourish.
Respectfully Yours,
Leamon A. Crooms II
Respectfully Yours,
Leamon A. Crooms II
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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