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Researcher: Roos Houthoff Supervisors: Dr. A. Boonstra
Dr. B.J.W. Pennink
Principal: Corning Life Sciences Mr. D. Panneton Mr. T.R. McBurnett Final Thesis
University of Groningen
Faculty of Management and Organization 2004
Opportunities beyond imagination
ROAD MAP TO INDIA
© The researcher is fully responsible for the contents of this research report; the researcher holds the copyright of the report
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PREFACE
Ever since my first visit to India in 1994, I fell in love with the country and the Indians. Therefore I was thrilled that Corning Life Sciences enabled me to conduct research on the Life Sciences market in India.
So the India part of the research was covered, but how about the Life Sciences part? To be honest, at the start of this research process I knew practically nothing about this industry and Corning’s products.
Therefore I started with walks around the warehouse, and explored the sample room. I took a big bag of left-over products home and played around with them to get a feeling for the products.
Then I registered to High Throughput Screening newsletters, daily biotechnology monitors etc. to get a feeling for the industry and to familiarize myself with the activities of Corning’s customers. Many times during this research process, I got so excited about the opportunities in India that I was tempted to pick up the phone and discuss Corning’s possibilities with potential clients. Unfortunately, this was beyond the scope of this research.
Although I consider myself far from being an expert, I am satisfied and happy with the end result and I am convinced that the information is useful to enable Corning Life Sciences to make informed choices on issues concerning the Indian market. So I would like to say: read this research, absorb the information and you will be astonished; there is a world of opportunities for Corning Life Sciences on the Indian Subcontinent. Use it in your advantage and go for it.
“You may never know what results come from your action.
But if you do nothing, there will be no result”.
Mahatma Gandhi
Although the research process and the compilation of this final report sometimes felt as a very lonely process, I was definitely not alone. Therefore I would like to sincerely thank everybody who helped me during this period. First of all my roomie at home, Marieke, who got to enjoy my highs and lows during the past few months. Thanks for the endless Cokes, coffees, fun, confidence and support. Secondly my roomies at Corning Life Sciences; thanks girls for giving me a great time both inside and outside the office. Thirdly all my friends; thanks for all your bad jokes and your company whenever it was needed and not needed. Of course I would also like to thank my parents and my brother; thanks for who you are.
And last but not least I would like to thank my supervisors of the University of Groningen. First of all, Albert Boonstra; thanks for you time, feedback, understanding, confidence and patience. I owe you big time. Secondly, I would like to thank Bartjan Pennink who was so kind to jump in at the last moment;
thanks for your kindness and flexibility.
I hope all you guys enjoy reading this research as much as I enjoyed writing it.
Have fun,
Roos Houthoff
Amsterdam, November 2004
3 SUMMARY
The aim of this report is to generate an overview of the Life Sciences market in India in order to enable Corning Life Sciences to make informed choices and take timely action for its market development in India. This research has been requested by Corning Life Sciences as it lacks the knowledge and information to make sound strategic decisions on the level of involvement in the Indian market. To provide a clear picture, an external analysis of the Life Sciences industry in India has been conducted.
Please note, that it is clearly not the intention of the researcher to develop a clear design or strategy for market development in India. As the title indicates, this is a Road Map: it tells you what is on the map and where to go, but which route to take depends on CLS’ internal capabilities, resources and the overall business strategy.
In recent years, the general economic philosophy in India has shifted toward greater market orientation and openness to the world economy. This can be seen in the fundamental economic reforms and foreign investment incentives, combined with many free trade agreements. As a result, the Indian economy is showing very healthy growth rates, with a number of markets showing a continued and significant growth including the, for CLS important, pharmaceutical and biotechnology sectors.
One of the most positive trends of the liberalization program for CLS is the continuous reduction of import tariffs, as its products basically become cheaper thereby increasing market reach. Consequently, the demand is increasing. In addition, lower import tariffs strengthen CLS’ position in relation to domestic competitors.
All Scientific and Industrial Research Organizations recognized by the Department of Scientific and Industrial Research are eligible for customs duty exemption on the import of CLS’ products. Besides government funded institutions and universities, many industrial R&D centers and commercial in- house R&D units are recognized by the DSIR and can therefore apply for tax exemption. In addition, the Department of Science and Technology recently decided to make R&D Centers in the private sector eligible for grants under the Instrumentation and Development Program. This program reimburses up to 50 percent of the recurring expenses (like consumables) of the private R&D laboratories recognized by the DSIR. This decision is expected to boost demand for CLS’ products.
The Government of India adopts a long-term vision for the growth of the Life Sciences industry in general and specifically for the promotion of R&D and supports both public and private firms with generous funding and attractive incentives. The Government of India is clearly shifting its priority from being a low-cost manufacturing base to undertaking pharmaceutical R&D and biotechnological research. However, India’s inadequate Intellectual Property Protection contradicts the emphasis placed on R&D and the development of the science-based Life Sciences industry. The current Regulatory Framework hinders the establishment of an attractive business climate for financing start-up ventures, resulting in severely limited availability of Venture Capital.
While it is too early to evaluate how well India is doing with the implementation process of product patent protections in January 2005, its commitment to align its Intellectual Property laws with the rest of the world has created expectations in both India and the rest of the world. Corning’s competitors in the Indian market are gearing up as they expect a large increase in demand due to increased R&D activity in the post-WTO phase. In addition, a lot is expected from the fact that many of the players in the Life Sciences industry will set up new manufacturing units or will upgrade their existing plants for getting FDA approvals.
Realizing the importance of a strong research infrastructure for a competitive Life Sciences industry, the Government of India focuses on capacity building, both in terms of human resources and a sophisticated research infrastructure. As a result, a strong academic base characterizes the Life Sciences
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industry; India has a large skilled workforce with a great deal of expertise in areas such as microbiology, chemical synthesis, pharmacology, and immunology among other things. In addition, there is a well- established network of universities and government-funded research institutes with a strong R&D infrastructure. Many of these players conduct research in areas that are interesting for CLS such as molecular biology, bioprocessing, stem cell research, and genomics. Overall, government research institutes continue to one of the major end-users of laboratory supplies. Combined with the duty-free import of laboratory supplies, this is a very interesting target group for CLS.
The Indian biotechnology industry is a fast emerging sector (39 percent growth in FY 2003-2004) with strong prospects for growth. The strong market growth obviously has to be supported with laboratory supplies, thereby increasing the demand for CLS’ products. The fastest growing segments include Bio- Pharma, Agro-Biotechnology and Bio-Services.
Due to the history of process patents, research and innovation have traditionally been neglected by the domestic industry; instead a robust and highly competitive generic industry thrived, thereby developing competencies in reverse-engineering and low-cost manufacturing. These competencies are currently fueling the growing demand for contract manufacturing by multinationals. Since a number of bio- pharmaceuticals are coming off-patent in the near future and the demand for cheaper drugs is growing worldwide, the Indian pharmaceutical industry is well placed to take a significant share of the world’s growing bio-pharmaceuticals market.
In addition, the Indian Life Sciences industry is becoming an international hub for contract research.
With a high level of expertise, low research and development costs, and attractive incentives, many large pharmaceutical and biotechnology firms are establishing agreements with Indian firms and research institutions to develop New Chemical Entities and increase their R&D productivity. These developments lead to increased activity in both downstream and upstream bioprocessing, thereby providing good (and growing) opportunities for CLS to sell its bioprocess products in India.
In an attempt to remain locally and globally competitive, the Indian firms are currently raising their R&D budgets. As a result of this increased focus on R&D, India has become more than just a cheap alternative for production. The Indian Life Sciences industry is definitely moving up the value chain; it is no longer a pure reverse engineering industry that is focused on the domestic market, but it is moving towards basic research-driven, export-oriented global presence thereby providing a range of value- added quality products and services. The increased activity in R&D will generate a growing demand for CLS’ high quality laboratory consumables.
As indicated, international pharmaceutical and biotechnology firms are increasingly turning their eyes on India in the run up to 2005, exploring ways to interact with India’s unique set of skills, resources and opportunities. Many of these multinational active in the market are already using Corning products in other parts of the world. Corning could utilize its existing relationships with these customers to get relatively easy market access in India.
The laboratory supplies market in India is import dominated and all Corning’s major competitors are active in the market either directly, through a subsidiary or a joint-venture, or indirectly through a distributor or agent. Their common strategy is full commitment to the domestic market and that proves to be very successful. CLS seems to be rather late as compared to the activity levels of its main competitors in the market. Nevertheless, the pie is growing significantly (44 percent growth in FY 2003-2004), and there are definitely chances for CLS to take its share.
As a conclusion, it can be stated that there is a world of opportunities awaiting Corning Life Sciences in India. Now it is up to CLS to design a solid strategy tailored to the Indian market to take advantage of the opportunities. Please note that market assessment needs to be done on a regular basis, as the Life Sciences market in India is highly dynamic and the situations and opportunities tend to change quickly.
5 TABLE OF CONTENTS
PREFACE 1 SUMMARY 3
FIGURES & TABLES OVERVIEW ...8
CHAPTER 1 INTRODUCTION ...9
PART I RESEARCH DESIGN ... 10
CHAPTER 2 PROBLEM STATEMENT ... 11
§2.1 INTRODUCTION...11
§2.2 PROBLEM IDENTIFICATION...11
§2.2.1 Problem Owner...11
§2.2.2 Management Question...12
§2.3 RESEARCH OBJECTIVE...14
§2.4 RESEARCH QUESTION...14
§2.5 RESEARCH BOUNDARIES...15
§2.6 DEFINITIONS...15
§2.7 RESEARCH APPROACH...16
CHAPTER 3 PROBLEM ANALYSIS ... 17
§3.1 INTRODUCTION...17
§3.2 DISTINCTIVE FEATURES...17
CHAPTER 4 CONCEPTUALISATION... 19
§4.1 INTRODUCTION...19
§4.2 THE START …...19
§4.3 … AND THE RESULT...21
CHAPTER 5 OPERATIONALISATION... 21
§5.1 INTRODUCTION...22
§5.2 RESEARCH SCOPE...22
§5.3 RESEARCH PLAN...23
§5.4 RESEARCH METHOD...25
PART II RESEARCH FINDINGS ...26
CHAPTER 6 ENVIRONMENTAL ANALYSIS ...27
§6.1 ECONOMIC DIMENSION...28
§6.1.1 Overview ...28
§6.1.2 Market Size & Growth...28
§6.1.3 International Trade ...29
§6.1.4 Taxation...31
§6.1.5 Infrastructure & Distribution...31
§6.1.6 Healthcare ...31
§6.1.7 Economic Distribution ...32
§6.2 (GEO-)POLITICAL DIMENSION...33
§6.2.1 Government & Administration ...33
§6.2.2 Geo-Politics ...33
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§6.3 CULTURAL DIMENSION... 34
§6.3.1 General... 34
§6.3.2 Business Practices... 34
§6.4 CONCLUSION &IMPLICATIONS FOR CLS... 35
CHAPTER 7 REGULATORY FRAMEWORK ANALYSIS ... 36
§7.1 GENERAL... 37
§7.2 THE INDIAN PATENT ACT... 37
§7.3 DATA EXCLUSIVITY... 39
§7.4 COPYRIGHTS AND TRADEMARKS... 39
§7.5 DRUG PRICE CONTROL ORDER... 39
§7.6 CONCLUSION &IMPLICATIONS FOR CLS... 39
CHAPTER 8 CAPITAL SUPPLY ANALYSIS...41
§8.1 GOVERNMENT FUNDS... 42
§8.1.1 Introduction ... 42
§8.1.2 Central Government ... 42
§8.1.3 State Governments... 44
§8.2 VENTURE CAPITAL... 45
§8.3 ALLIANCES AND PARTNERSHIPS... 46
§8.3.1 Biotech & Pharma firms... 46
§8.3.2 Domestic & Multinational Firms ... 47
§8.4 FOREIGN DIRECT INVESTMENT... 48
§8.5 CONCLUSION &IMPLICATIONS FOR CLS... 49
CHAPTER 9 POTENTIAL CUSTOMER ANALYSIS... 49
9.A ACADEMIA ... 52
§9.A.1 INTRODUCTION... 52
§9.A.2 HUMAN CAPITAL... 52
§9.A.3 RESEARCH INFRASTRUCTURE... 53
§9.A.3.1 Educational Institutes... 53
§9.A.3.2 Public Funded Research Institutes ... 53
§9.A.3.3 Industrial Parks... 54
§9.A.4 COMMERCIALIZATION OF RESEARCH... 55
§9.A.5 CONCLUSION &IMPLICATIONS FOR CLS ... 56
9.B BIOTECHNOLOGY SECTOR ... 57
§9.B.1 INTRODUCTION... 57
§9.B.2 INDUSTRY STRUCTURE... 58
§9.B.3 SEGMENTATION ANALYSIS... 59
§9.B.3.1 Overview ... 59
§9.B.3.2 Bio-Pharma... 60
§9.B.3.3 Bio-Services ... 65
§9.B.3.4 Bio-Industrial... 67
§9.B.3.5 Agro-Biotechnology ... 69
§9.B.3.6 Bio-Informatics ... 70
§9.B.4 CONCLUSION &IMPLICATIONS FOR CLS ... 72
9.C PHARMACEUTICAL SECTOR... 74
§9.C.1 INTRODUCTION... 74
§9.C.2 INDUSTRY STRUCTURE... 74
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§9.C.2.1 General...74
§9.C.2.2 Indian versus Foreign Players...75
§9.C.2.3 Generic versus Innovative Firms...76
§9.C.3 SECTOR PERFORMANCE...77
§9.C.3.1 Market Drivers...77
§9.C.3.2 Growth Contraints...78
§9.C.4 SEGMENTATION ANALYSIS...79
§9.C.5 CONCLUSION &IMPLICATIONS FOR CLS...80
CHAPTER 10 COMPETITOR ANALYSIS...80
§10.1 INTRODUCTION...82
§10.2 SECTOR PERFORMANCE...82
§10.3 SECTOR STRUCTURE...82
§10.3.1 Local versus Foreign Players...83
§10.3.2 Foreign Suppliers Presence ...83
§10.4 CONCLUSION &IMPLICATIONS FOR CLS...83
CHAPTER 11 IMPLICATIONS FOR CLS ...83
REFLECTION 92 REFERENCES 93 BOOKS &ARTICLES...93
USEFUL AND USED INTERNET RESOURCES...94 APPENDICES Error! Bookmark not defined.
Appendix A Research Approach ...Error! Bookmark not defined.
Appendix B Drug Discovery & Development Process ...Error! Bookmark not defined.
Appendix C Custom Duties CLS Classified by HS Code ...Error! Bookmark not defined.
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FIGURES & TABLES OVERVIEW FIGURES
TABLES
Figure 1: The Drug Discovery & Development Process ...17
Figure 2: Conceptual Framework ...20
Figure 3: Research Scope & Research Plan...22
Figure 4: Exchange Rates Indian Rupee versus the US Dollar & Euro...26
Figure 5: Nominal GDP & Real GDP Growth Rate in India; Period 1991-2005...27
Figure 6: Biotechnology Investments of Various VC Funds in 2001 ...43
Figure 7: Academic Centers of Excellence in India ...51
Figure 8: Key Government Research Centers in India...52
Figure 9: Autonomous R&D Institutions in India...52
Figure 10: Market Shares Biotechnology Segments in FY 2003-2004 ...57
Figure 11: Market Shares in the Bio-Pharmaceutical Segment in FY 2003-2004 ...59
Figure 12: Market Share by Pharmaceutical Manufacturers...72
Figure 13: Market Share Multinationals vs. Indian firms in 1971 & 2004 ...73
Figure 14: Distribution of Pharmaceutical Segments in India...77
Figure 15: Top-10 Suppliers & their Market Shares in FY 2003-2004...81
Table 1: Budgetary Allocations of Major Funding Agencies in 2001-2002 ... 40
Table 2 Manpower by Qualification in the Biotechnology Sector... 51
Table 3: Biotechnology Sales and Shares in the Indian Biotechnology Clusters ... 56
Table 4: Growth Rates per Segment in FY 2003-2004... 57
Table 5: Exports versus Domestic Business per Segment in FY 2003-2004... 57
Table 6: Bio-Pharma Sales in FY 2002-2003 & FY 2003-2004... 58
Table 7: Top-20 Players in the Bio-Pharma Segment ... 58
Table 8: Consumption & Demand for Important Vaccines... 60
Table 9: Consumption & Demand for Recombinant Proteins ... 61
Table 10: Consumption & Demand for Diagnostics ... 63
Table 11: Top 5 Players in the Bio-Services Segment in FY 2003-2004 ... 65
Table 12: Top 5 Players in the Bio-Industrial Segment in FY 2003-2004... 66
Table 13: Top 10 Players in the Agro-Bio Segment in FY 2002-2003 ... 67
Table 14: Top 4 Players in the Bio-Informatics Segment in FY 2002-2003... 69
Table 15: Top-20 Players & their Growth Rates in the Supplier Segment ... 80
9 CHAPTER 1 INTRODUCTION
If Corning Life Sciences wants to thrive, it needs growth in market share, sales, revenues, and profits. In order to achieve this, Corning Life Sciences is increasingly turning its eyes to the so-called emerging markets as they are viewed upon as a source of growth and profit. Until now Corning has mainly focused on the industrialized part of the world, but it realizes that there are largely untapped sales opportunities in the emerging markets. Although Corning is active in some of the emerging markets like South Africa, Russia and India, its export strategies for these markets…
However, if Corning does it right in these markets it will find the profits, market share and growth that it is looking for. But what is right? There is no magic bullet or of-the-shelf strategy that guides market development in emerging markets. Neither it is a way of simply transplanting of what worked at home to the new markets. But what we do know, is that for a successful operation it is necessary to fully understand the market you are entering and develop strategies specific to the situation.
Due to limited available resources, in both time and money, the researcher and the European management team decided to focus the research on one of the most promising emerging markets: India. The combination of the high expectations of the European management team of the opportunities for Corning Life Sciences in India and the knowledge level of India in general from the researcher led to the choice for India.
This report concerns an analysis of the Life Sciences market in India with the aim of enabling Corning Life Sciences to make informed choices and take timely action for its market development in India. This report is broken up into two distinct parts: the Research Design part and the Research Findings part.
In the Research Design part, a comprehensive research model and the forthcoming research plan will be constructed in order to reach the research objective. The research design starts with an introduction to the problem owner: Corning Life Sciences. Its management question is examined and narrowed down to a researchable problem field. Subsequently, the forthcoming problem statement will be set out.
The Research Findings part contains the research findings from the performed analyses as designed in the research plan in the Research Design part. Each analysis ends with the implications of the outcomes for Corning Life Sciences. The section starts with a general overview of the Indian environment and identifies the main trends and uncertainties that have an impact on the Life Sciences Industry in India and its suppliers. This is followed by the Regulatory Framework Analysis where the most important elements of the regulatory framework are discussed and assesses its impact on the investment and activity levels of the (potential) customers of Corning Life Sciences. The Capital Supply analysis is concerned with the identification of the main capital suppliers of the Life Sciences industry in India. Consequently, the current status and future prospects of Corning’s potential customer groups is outlined. As requested by Corning, the customer groups consist of Academia, the Biotechnology Sector and the Pharmaceutical Sector. The implications for Corning will be given for each of the individual customer groups. Although this potential customer analysis is specifically aimed at the group level, the most important players for CLS within each group are identified. Whenever the researcher considers a potential customer especially interesting for CLS, a short description of the activities of this individual player is provided. For a complete overview, the main competitors in the Indian market are identified.
Concluding, the Implications for Corning Life Sciences section gives an overview of the key facts, trends and uncertainties in the Life Sciences industry and the competitive playing field in India and the forthcoming implications for Corning Life Sciences. The report ends with a reflection from the side of the researcher on the conducted research.
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RESEARCH DESIGN
The main objective of this research is to generate an overview of the Life Sciences market in India in order to enable Corning Life Sciences to make informed choices and take timely action for its market development in India. Sounds easy, but how to assess the Life Sciences Industry in India and the forthcoming implications for Corning Life Sciences?
In the Research Design part a comprehensive research model as well as a research plan will be constructed to reach the research objective. The Research Design starts with an introduction to the problem owner: the management team of the European headquarters of Corning Life Sciences in Schiphol-Rijk and its main reasons for ordering this research. The management question is examined and narrowed down to a researchable problem field. Subsequently, the forthcoming problem statement will be set out. Obviously, the used terms and concepts as used in the problem statement are defined and this section includes a brief overview of the research approach as well.
This is followed by the Problem Analysis that is meant to identify the distinctive features of the Life Sciences industry that have to be taken into account when assessing the attractiveness of this industry in India for Corning Life Sciences. The derived insights from the problem analysis will be used as the basis for the conceptual model. Finally, the developed conceptual model will be operationalised into a comprehensive research plan.
11 CHAPTER 2 PROBLEM STATEMENT
§2.1 Introduction
In Chapter 1 of this report, a brief introduction has been given to the background and reasons for conducting this research. The current chapter starts with the problem identification, which purpose is twofold: firstly it is meant to get acquainted with the principal of this research: the European management team of Corning Life Sciences, and secondly it is meant to elaborate further on its main reasons for ordering this research. The management question is examined and narrowed down to a researchable and useful problem field.
Subsequently, the forthcoming problem statement will be set out. Following De Leeuw (1996), the problem statement contains the objectives of the research, the forthcoming research questions, and the research boundaries.1 The problem statement serves as a basis for the entire research. The used terms and concepts in the problem statement are defined. Finally, the research approach will be outlined.
§2.2 Problem Identification
The purpose of the problem identification is to provide insight into the problem owner: Corning Life Sciences and more specifically, the management team of its European headquarters, as this part of the firm is responsible for market development in India. After getting acquainted with the principal of this research, the management question will be outlined, narrowed down and specified into a researchable problem field.
§2.2.1 Problem Owner
The principal of this research is the management team of the European Headquarters of Corning Life Sciences in Schiphol-Rijk, The Netherlands. Corning Life Sciences is part of Corning Incorporated, which is a diversified innovation-led technology firm that was founded in 1851 and is headquartered in Corning in the United States. Corning Inc. focuses on high-growth high-technology markets and currently operates in four distinct market segments: Display Technologies, Environmental Technologies, Telecommunications and Life Sciences. Corning Inc. has research, manufacturing and commercial locations across 27 countries and currently employs approximately 20 thousand people world-wide.
The Life Sciences division develops, manufactures and supplies scientific laboratory products since 1915, when Corning introduced its patented Pyrex® laboratory glassware. This was the first in a long series of innovative research breakthroughs that revolutionized the research methods of scientists and Corning’s products were soon found in laboratories around the world. In the early 1970s, Corning added plastic labware to its growing line of laboratory products and several of its products (like the plastic cell culture flasks and roller bottles) soon became an industry standard. By the 1980s, amidst rapid breakthroughs in the areas of biotechnology and molecular biology, Corning expanded into cell culture, filtration and liquid handling product lines to support these developing technologies.
In 1993, Corning Inc. acquired Costar Corporation to become Corning Costar (and later Corning Science Products). Costar’s design engineering and applications expertise complemented Corning’s strong manufacturing and commercial capabilities. Due to the synergy between both firms, Corning became a global leader in consumable glass and plastic laboratory tools for Life Sciences research. Its products are mainly so-called consumables, meaning that they can only be used once.
In 2000, Corning Science Products was renamed to Corning Life Sciences to better reflect its business goals and visions. Corning Life Sciences’ innovative products are developed for researchers to increase efficiency, reduce cost and compress timelines of the drug discovery and development process. The firm’s core technical competencies include polymer science, biochemistry and molecular biology, glass melting and
1 De Leeuw, Prof. Dr. Ir., A.C..J., Bedrijfskundige Methodologie Management van Onderzoek, 1996
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forming, surface modification, and characterization science. The global headquarters of Corning Life Sciences is situated in Acton, Massachusetts.
The products are manufactured at six different state-of-the-art facilities of which 4 are located in the United States and 2 in Mexico. All facilities are ISO 9002 registered and follow stringent production guidelines to ensure the highest level of consistency and quality.
European Headquarters
As indicated, this research is performed for the management team of the European headquarters of Corning Life Sciences in Schiphol-Rijk. The main function of the European headquarters is the sales and distribution of Corning Life Sciences’ products in Greater Europe. Greater Europe consists of the European Union, Africa, the Middle East, Southeast Asia, Russia and India. This is obviously a very wide and diverse scope, and..
In total, the European headquarters employs around 70 people.
For sales in Greater Europe, all products are shipped from the United States to the Corning warehouse in Schiphol-Rijk. From there, Corning takes care of the further distribution of the products to its customers.
Sales are made through two different channels: direct and indirect.
Direct encompasses sales that are made directly to the end-users of Corning Life Sciences’ products i.e.
universities, biotechnology firms, research-based pharmaceutical firms etc. Corning has around 20 account managers who cover these direct customers in Europe. The sales volume and sales growth of these customers are the main parameters for the price setting of the products. The European office has a 7-person customer service department to take product orders and to assist with delivery issues. The marketing department is responsible for technical assistance and the exposure of Corning’s products through industry trade shows, congresses etc. Due to the nature of Corning’s products and the specific applications within the working field of the customers, the account managers and the marketers generally have a scientific background in molecular biology or a related field.
Indirect sales are all sales that are made through one of the 20 distributors that represent Corning. The distributor orders the products through the customer service, the employees in the warehouse ship the products to the distributor, and the distributor sells and ships the products to its end-customers.
§2.2.2 Management Question
As outlined, the European headquarters is responsible for the sales and distribution of Corning Life Sciences’ products in Greater Europe, …
The Western European market can be considered rather saturated and currently shows very low growth rates; most of these markets are highly dependent on government funding which are slashed during the recent economic downturns. Corning Life Sciences continuously aims to grow autonomously by increasing market share, sales, revenues and profits.
Therefore the management team of the European headquarters of Corning Life Sciences is increasingly turning its eyes to the so-called emerging markets to supply its products as they are viewed upon as a source of growth and profit. Although the European headquarter is responsible for the marketing and sales of its products in a number of emerging markets, the firm is mainly active in Western Europe. There is some activity in countries like South-Africa, Russia and India, but Corning feels that its sales levels are far below the possibilities. In other words, Corning assumes there are largely untapped opportunities in these markets.
……… The initial reason for this research to be ordered was that Corning wanted to increase its knowledge level.
As this is a very wide and rather vague assignment it had to be narrowed down and specified into a researchable problem field to ensure the relevance and usefulness of the research outcomes.
13 The Choice for India
As there are only limited resources available, in both time and money, not all promising markets can be addressed simultaneously; and a choice for a specific country had to be made. The combination of the high expectations of the European management team of the opportunities for Corning Life Sciences in India and the knowledge level of India in general from the researcher led to the choice for India.
The high expectations for Corning Life Sciences in India stem from the fact that….
Together with the enormous population of over a billion inhabitants that is still growing rapidly and strong economic growth, this trend fuels the thought that there are untapped opportunities for Corning Life Sciences in the Indian market. The high expectations are further enhanced by signals in the Life Sciences industry; ……..
In addition, several industry newsletters, newspapers etc. report on the fact that several of Corning’s major customers are moving their research and/or production facilities to India, further enhancing the curiosity for India. The fact that the researcher traveled all over India during her high school period and organized a study project to India during her master’s education in Groningen further contributed to the choice for India.
Although there is extensive academic literature available on country selection to identify the ‘right’ market for expansion in general and/or even specifically aimed at emerging markets (e.g. Kumar V. c.s, 19942; Arnold, D.J., Quelch, J.A., 19983 among others) ……
Current Activity in India
The current business with India can be summarized as following:
Research Focus
Considering the current business situation, the main question is: What is it Corning really wants to know about India? And here there are plenty of possibilities: What are the potential customers in India? Is there sufficient demand? How to price the products for the Indian market? What is a good distribution channel (direct and/or indirect)? What are the product-market possibilities? etc.
Ultimately, Corning Life Sciences wants to design a market development plan for India. In this case market development is concerned with the increase of sales of Corning Life Sciences’ products in India by means of exporting the products from the European warehouse to India. Since exporting is one of the main activities of the European headquarters, as The Netherlands is only a small part of the targeted markets, Corning Life Sciences considers exporting as one of its core competences. As a consequence, Corning is fully confident that it has enough expertise and experience to know ‘what to do’ and ‘how to do it’ when it comes to
2 Kumar, V., Stam, A., Joachimsthaler, E.A., An Interactive Multicriteria Approach to Identifying Potential Foreign Markets, Journal of International Marketing, Vol. 2, No. 1, pp. 29-52, 1994
3 Arnold, D.J., Quelch, J.A., New Strategies in Emerging Markets, Sloan Management Review, pp. 7-20, Fall 1998
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exporting its products to India. It is therefore not requested to design the actual market development plan and/or to provide an overview of the strategic options for Corning Life Sciences in the Indian market.
However, the management team lacks the knowledge of the Indian Life Sciences market to make sound decisions on their level of involvement in the Life Sciences market in India. In order to make these strategic decisions, the management team needs a clear picture of the Indian Life Sciences market including its current status and future prospects. Therefore, the current research will focus on providing an overview of the Life Sciences market in India and the forthcoming implications for Corning Life Sciences based on objective market intelligence.
Concluding, the research products derived form this research should enable Corning Life Sciences to make informed choices and take timely action for its market development in India. The market development plan itself will be designed by the management team on the basis of the provided information, the strength &
weaknesses of the firm and the overall strategy of the firm. These insights will serve as the basis for the research objective and the forthcoming research questions.
§2.3 Research Objective
The main objective of this research is to generate an overview of the Life Sciences market in India in order to enable Corning Life Sciences to make informed choices and take timely action for its market development in India. In this case market development is concerned with the increase of sales of Corning Life Sciences’ products in India by means of exporting the products from the European warehouse to India.
The results of this research will give an overview of the key facts, trends and uncertainties of the Indian Life Sciences market and the forthcoming implications for Corning Life Sciences. This implies that the research products will give an indication of the attractiveness of the Indian Life Sciences market for Corning Life Sciences.
The basic assumption of this research is simple; the market for Corning Life Sciences’ products, consumable laboratory equipment and supplies, increases and decreases together with the growth and decline of Corning Life Sciences’ target markets. The attractiveness of the Indian Life Sciences industry for Corning Life Sciences is therefore basically a question of demand and supply. The demand side comprises the Life Sciences industry, and CLS is, together with its competitors, viewed upon as a supplier to the players in the Life Sciences industry.
According to De Leeuw (1996), every research can be classified in terms of the type of knowledge product generated by the research.4 The knowledge products to be derived in the current research are aimed at supporting management decisions concerning Corning Life Sciences’ involvement in the Indian Life Sciences market. In practice, the findings will be especially helpful to the responsible managers, as they will support strategic decision-making.
As can be derived from the research objective, it is clearly not the intention of the researcher to develop a clear design or strategy for market development in India. As the title indicates, this is a Road Map: it tells you what is on the map and where to go, but which route to take depends on CLS’ internal capabilities, resources and the overall business strategy.
§2.4 Research Question
The following research question serves as a guideline for reaching the above-mentioned research objective:
What are the major facts, trends and uncertainties in the Indian Life Sciences market and what are their implications for Corning Life Sciences?
Please note, that the researcher specifically made the decision to incorporate the term major into the research question. Although this implies that the researcher is able to make a qualitative judgment between minor and
4 De Leeuw, Prof. Dr. Ir., A.C..J., Bedrijfskundige Methodologie Management van Onderzoek, 1996
15 major facts, trends and uncertainties, it is felt as a necessary addition as there are so many aspects that could
be considered relevant for Corning Life Sciences that the research would become unresearchable and this report could become overloaded with all sorts of facts and analyses. The incorporation of major prevents this from happening.
In order to answer the main research question it has been broken up into two parts. The first part is concerned with the identification of the relevant concepts that have to be taken into account for a proper assessment of the attractiveness of the Life Sciences industry in India for Corning Life Sciences. This process consists of the three following consecutive phases: Problem Analysis, Conceptualisation and Operationalisation.
The main goal of the Problem Analysis is to identify the distinctive features of the Life Sciences industry that have to be taken into account when assessing the attractiveness of this industry in India for Corning Life Sciences, thereby gaining a thorough understanding of the specifics of the problem field. The derived insights will be used as a basis for the conceptual model, which in turn will be operationalised into a comprehensive research plan. In the Operationalisation Phase a set of underlying investigative questions concerning the derived concepts will be formulated in order to be able to answer the main research question. This is a highly important and necessary step of the research process as Corning Life Sciences currently has no model and not even an overview of the relevant aspects to assess a Life Sciences industry.
It is therefore vital to gain insight into the relevant aspects and forthcoming analyses that are necessary to perform in this research to ensure the relevance and usefulness of the research products.
The information that is required for the problem analysis and the forthcoming models is derived from both internal (e.g. product information guides, Corning annual reports) and external information sources (e.g.
articles, scientific theories, methodology books, discussion papers and websites), as well as interviews with technological experts and decision makers within Corning Life Sciences. The remainder of the current ‘Part I Research Design’ contains the described Problem Analysis, Conceptualisation and Operationalisation sections.
The second part involves an explorative external investigation of the major facts, trends and uncertainties in the Indian Life Sciences industry by executing the research plan. The outcomes of this investigation will be translated into the implications for Corning Life Sciences. The results of this second part can be found in
‘Part II Research Findings’ in the current report.
Linked with the strengths and weaknesses and the overall strategies of Corning Life Sciences, responsible managers will be able to make sound strategic decisions on their involvement in the Indian market. The internal analysis of CLS will not be part of this research.
§2.5 Research Boundaries
The boundary conditions of the research are as following:
* The research period is bounded by the graduate time period of six months;
* The information gathering process will entirely take place in The Netherlands;
* Only Corning employees of the European headquarters in Schiphol-Rijk can be contacted;
* The amount of interviews with relevant employees depends on the willingness to co-operate by these employees;
* Due to the required secretive nature of this research, none of the market players may be approached for information;
* The quality and reliability of the analyses are dependent (besides the qualities of the researcher) on the availability and quality of the required information.
§2.6 Definitions
The terms and concepts as used in the problem statement are for the purpose of the current research defined as following:
16
Life Sciences all activities that use living organisms; e.g. proteins, enzymes, antibodies, human, animal and plant cells, viruses and yeast. Players active in the field of life sciences are for these research purposes: Academia, Biotechnology firms and Pharmaceutical firms;
Indian Life Sciences market the total playing field of demand and supply of consumable laboratory equipment and supplies. The demand side consists of the Academia, the Biotechnology Sector and the Pharmaceutical Sector and the supply side encompasses Corning Life Sciences and its competitors in India;
Informed choice decision based on objective information;
Timely action pro-active action;
Corning Life Sciences the European headquarters of Corning Life Sciences in Schiphol-Rijk; this will be abbreviated to CLS in most cases in the current research;
Market development increasing the exporting activity of CLS’ products to Indian Life Sciences industry, i.e. increase sales in India;
Fact a piece of verified information;
Trend a general direction in which facts tend to move (either positive or negative);
Uncertainty fact or trend of which the outcome is unsure;
Implications for CLS influence of the derived facts, trends and uncertainties on the attractiveness of the Indian Life Sciences market for CLS thereby impacting its possibilities.
§2.7 Research Approach
The execution of the current research for Corning Life Sciences consists of the following three Phases: the Research Design phase, the Implementation of the Design phase, and the Reporting Phase. In Appendix A an overview is given of the activities needed in each of the research phases in order to be able to reach the research objective. These activities will lead to a series of research products of which an overview has also been included in Appendix A. Please note that the time frame in this research plan allows seven months for the entire research instead of the graduate time period of six months as mentioned in the research boundaries. This is decision made by the researcher at the start of the research; two weeks are scheduled for holidays and three weeks are built in as slack in case of any unexpected delays.
17 CHAPTER 3 PROBLEM ANALYSIS
§3.1 Introduction
As outlined in the problem statement, the research question has been broken up into two parts. The first part is concerned with the identification of the relevant concepts that have to be taken into account for a proper assessment of the attractiveness of the Life Sciences industry in India for Corning Life Sciences. This part consists of the following three consecutive phases: Problem Analysis, Conceptualisation and Operationalisation. The current chapter concentrates on the Problem Analysis in order to identify the distinctive features of the Life Sciences industry that have to be taken into account when assessing the attractiveness of this industry in India for Corning Life Sciences. The derived insights will be used as a basis for the conceptual model and the forthcoming research method that will be constructed in the following two chapters.
§3.2 Distinctive Features
The technology-based Life Sciences industry is in certain aspects similar to other high-tech industries; the basis of the industry is knowledge, from the discovery and understanding of the underlying basic science, through the accumulation of scientific data and the elucidation of mechanisms to the subsequent development of commercially viable products and processes.5 In this aspect, there should be no difference in the factors relevant for the assessment of the attractiveness of this industry, than any other technology- intensive industry.
However, the drug discovery and development process is the basic value chain for the Life Sciences industries to which CLS supplies its products and this process does have a number of particularities that have to be taken into account for a proper understanding and assessment of the market attractiveness for Corning Life Sciences of the Life Science industry in India. The distinctive features of the drug discovery process will be used as input for the research model. Figure 1 provides an overview of the process and a brief introduction to the value chain of the drug discovery and development process is given in Appendix B.
Ethical Issues
While developments in the Life Sciences field present unprecedented opportunities for potential improvements to human life they can, have and will continue to spur profound ethical dilemmas; modern drug discovery raises ethical issues by interfering with the genetics of plant, animal and human species. As such, the process may be perceived as unnatural or even sacrilegious. Additionally, genetically modified food products and plant species can be viewed with mistrust, either because of health concerns arising from their direct consumption or because of longer term environmental disruption arising from their uncontrolled release in nature.
All over the world, public authorities, civil society, and the players within the Life Sciences industries are debating on broadly accepted policies in full respect of moral and religious convictions and incorporating fundamental ethical considerations. This is a difficult and complex process as there are no simple answers to ethical dilemmas. In addition, ethical opinions are not static, as they change with increased knowledge, scientific advancement, changing physical circumstances etc. In practice, ethical concerns will vary according to the perceived risk-reward balance: the need for genetically modified crops is less evident to a well-fed society than the need for a cure for AIDS for someone who is HIV-positive. A perfect answer will not be found and the debates will continue.
Complex Regulatory Framework
A direct consequence of these ethical issues and health concerns is the substantial and relatively complex regulatory framework that has been put in place by governments around the world. Many countries are actively reviewing the safety and ethics of Life Sciences research and its applications. Some countries have
5 European Investment Bank, EIB Sector Papers, Biotechnology: an overview, June 2002
18
already established research guidelines for work on embryo transplantation, genetic manipulation, the balance of an individual’s privacy and the provision of genetic data to assist in drug development etc. An important part of the regulatory framework is concerned with the intellectual property rights of products and processes; patents are particularly important to the players in the Life Sciences industry because of the high level of investment needed to bring drugs to the market. Therefore researchers, developers and producers have the tendency to move to those countries where the regulatory framework is most conductive for the proliferation of their activities.
Distinctive Economics
The distinctive economics of the drug discovery and development process greatly shapes the development of the Life Sciences industries across the globe. The process of developing new products and processes is time consuming, uncertain, and expensive.
Time Consuming The process of developing new drugs is time consuming. Not only there is a considerable work in research before a target is developed into a drug, but promising products must also endure lengthy testing and clinical trials to prove their safety and efficacy. The development of one new drug typically takes between 7 and 14 years.
Uncertain Drug discovery and the development is a risky business. As said, it takes between 7 and 14 years to develop a new drug, and perhaps one in a thousand innovations makes it into a successful commercial product. To give an idea: researchers and private firms get an average of five and a half thousand patents for new technologies in a given year. Around four hundred drugs are in development, but only around a 100 bio-related drugs have reached the market in the past thirty years.
Expensive The high level of uncertainty of success and the great length of time necessary make the drug discovery and development process an expensive undertaking. Firms need to pay for expensive research, laboratory facilities, and legal fees many years before any revenues come from sales and with uncertain prospects of success. These characteristics make large amounts of patient, upfront capital an essential ingredient for success. The development of one new drug can cost up to a billion US dollars.
Financing
The particularities of the drug discovery and development process make the perception of risk higher than generally associated with other technology-intensive industries. This makes sufficient and timely funding difficult to obtain. The availability of sufficient capital at different growth stages is vital for the establishment and growth of a healthy Life Sciences industry.
19 CHAPTER 4 CONCEPTUALISATION
§4.1 Introduction
In the Problem Analysis the distinctive features of the Life Sciences industry that have to be taken into account when assessing the attractiveness of this industry in India for Corning Life Sciences have been identified. In the current chapter, the derived insights will be used to construct the conceptual model of this research. In the following chapter the constructed conceptual model will be operationalised into a comprehensive research plan.
§4.2 The Start …
As outlined in the Problem Statement the basic assumption of this research is as following: the market for CLS’ products (consumable laboratory equipment and supplies) increases and decreases together with the growth and decline of CLS’ target markets. The attractiveness of the Indian Life Sciences industry for CLS is therefore basically a question of demand and supply. The demand side comprises the Life Sciences industry, and Corning Life Sciences is, together with its competitors, viewed upon as a supplier to the players in the Life Sciences industry. Both the demand and supply side are embedded in the Indian environment, as both parties operate within the Indian boundaries and have to deal with its unique cultural, (geo-) political and (socio-) economic character.
The target markets in the Indian Life Sciences industry consist of the potential customer groups of Corning Life Sciences. The potential customer groups are based on Corning’s experience in other markets (mainly Western European countries) and constitute of the following: the Academia, the Biotechnology Sector, and the Pharmaceutical sector.
The distinction is made because in general one can state that each of the potential customer groups plays a dominant role in a specific part of the drug discovery value chain. Corning’s has thousands of different consumables and its products can be used in every part of the value chain. However, different products are used in different stages of the value chain. As the products are technologically complex and the drug discovery and development process is very specific and complicated as well, it would be impossible for the researcher (or anyone without a scientific background in molecular biology or a related field and years of experience in the business) to further categorize the potential clients, tailor them to a sub-section of the value chain and to provide an overview of the exact product-market opportunities. Therefore it is assumed that a rough distinction based on these three customer groups would provide Corning Life Sciences with sufficient insight in its possibilities in the Indian market. In order to guarantee the usefulness and relevance of this research, this subject has obviously been discussed with the decision makers within Corning Life Sciences. As indicated in the Problem Statement, Corning currently has no model to assess a Life Sciences market and consequently no model on customer groupings. As said, the three groups used for the purpose of this research are based on Corning’s experience in other markets and are derived through interviews by the researcher with Corning employees.
Although for research purposes it is useful to apply this stringent separation between these customer groups for the above-mentioned reason, the reality is less strict; the boundaries between previously distinct business sectors such as biotechnology and pharmaceuticals and between product segments such as therapeutics and diagnostics are blurring. Non-profit universities and academic medical research institutes and commercial Life Sciences firms are becoming more and more interdependent. The customer groups in general and the individual firms and institutions in particular are interconnected through alliances, financial relationships, and a flow of goods, information, and personnel. In addition, they often have shared interests and common issues.
20
As the Drug Discovery & Development process is the basic value chain for the Life Sciences industry, and is the same all over the world, it will serve as the basic component for the research model. The value chain is slightly simplified and consists of the following consecutive phases: Basic Research, Early Stage R&D, Clinical Trials, and Commercialization. The researcher simplified the value chain, since this research focuses on customer groups and not on the individual players. In addition, there is no need for detailed activity levels of the various players in the three customer groups in this stage of market development in India and therefore it is not necessary to drill down to detailed levels of the drug discovery and development chain in this research. When the information derived from this research will be used as a basis for a segmentation strategy for India and specific potential customers will be targeted, it will make sense to make detailed profiles of these customers and tailor them to a specific sub-section of the value-chain and design a product- market strategy.
As stated above, in general one can state that each of the customer groups plays a dominant role in a specific part of the drug discovery value chain. As was the case with the customer groups, the reality is less strict; e.g. the Pharmaceutical Sector is increasingly investing in early stage R&D either directly or through partnerships with the Biotechnology Sector; as the Biotechnology Sector matures, some of its players will have the financial security to make it to the next step in the value chain etc.
As indicated, the products and processes in the Life Sciences industry are knowledge intensive. The Academia are mainly active in the Basic Research phase of the value chain, thereby providing the knowledge capital underpinning the Life Sciences industry. Strong basic research is a prerequisite for industrial application in the field of Life Sciences and a major component for a strong and successful Life Sciences industry. Since many of Corning’s products can be used in the earliest research stages the Academia is an important customer group.
The Biotechnology Sector is the main contributor to the Early Stage R&D phase of the value chain, but is also a relatively active player in the Clinical Trial phase. Due to the relatively small scales of Phase I & II Clinical Trials, quite a few of the Biotechnology players (even the smaller ones) are able to conduct these phases of the Clinical Trials. As described in Appendix B, phase II can be seen as a tipping point in the value chain; by bringing a product through Phase II, a firm can get full value for it because the likelihood of reaching the market is high. This makes it possible for small firms to partner with a large (pharmaceutical) firm to avoid the hefty registration fees associated with Phase III trials.
The Pharmaceutical Sector plays a dominant role in the final phases of the value chain i.e. the Commercialization and the Clinical Trials phase. The Commercialization phase requires a considerable infrastructure for both the production and the further marketing of the drugs, and therefore requires a sizeable investment that results in a significant fixed-cost base. In general, only the largest firms have the capacity to perform production in-house; the smaller ones have to outsource the production process to a large firm.
The growth opportunities of the players in the Indian Life Sciences industry depend in the first place on the demand for their (future) products and processes in India and the rest of the world and their ability to develop these products and processes. However, as we have seen in the Problem Analysis, the possibilities of the potential customers are also dependent on the status of the regulatory framework and the availability of timely and sufficient capital.
The boundaries of the Life Sciences industry are set by the regulatory framework; the firms active in this industry are bounded by the laws and regulations as created by the Government of India and as agreed upon in international agreements. Due to the specific economics of the drug discovery and development process (time consuming, uncertain, and expensive) and the fact that it is a highly knowledge-intensive process, make intellectual property a defining feature of the activity levels of the potential customers of Corning Life Sciences in India. In general, the better the intellectual property protection, the more attractive the market
21 for R&D investment will be. The attractiveness for R&D investment is important for CLS since an increase
in R&D spending will generate a growing demand for CLS’ products.
As each step of the drug discovery and development value chain has an inherent risk and return, the value of a product or technology increases as it moves from one stage in the value chain to the next. At each successive stage the likelihood of success increases, but the loss associated with failure increases as well. This makes proper financing of firms active in the field of Life Sciences a critical factor in their success and in fact their existence.
Proper financing explains the fact that the United States and Great Britain are ahead in the Life Sciences field, and explains in a large part the rapid growth and success of the industry in Germany and France in recent years.6 Therefore the availability of sufficient and timely capital is an important indicator for the attractiveness of the Indian market for CLS’ Potential Customers and therefore for CLS itself.
§4.3 … and the Result
The above leads to the conceptual model for this research as depicted in Figure 2. As can be derived from this figure, this model is a highly simplified view of the reality; it shows the different concepts that are relevant for a proper understanding and assessment of the attractiveness of the Life Sciences market in India for CLS and how they interrelate to each other. The conceptual model will serve as a guideline throughout the entire research. In order to make a solid research plan, the model will be used as a basis for the design of the research plan in the following chapter.
6 Ernst & Young, Life Sciences in France, 2001 Figure 2: Conceptual Framework
Source:
Roos Houthoff, 2004 BASIC
RESEARCH EARLY STAGE
R&D CLINICAL
TRIALS COMMER-
CIALIZATION
ACADEMIA BIOTECHNOLOGY SECTOR
PHARMACEUTICAL SECTOR
CAPITAL SUPPLY REGULATORY FRAMEWORK
INDIAN ENVIRONMENT
SUPPLIERS SUPPLY DEMAND
22
CHAPTER 5 OPERATIONALISATION
§5.1 Introduction
To generate an overview of the Life Sciences market in India in order to enable Corning Life Sciences to make informed choices and take timely action for its market development in India, the developed conceptual model will be operationalised into a comprehensive research plan.
The developed conceptual model provides an overview of the concepts that are relevant for a proper understanding and assessment of the attractiveness of the Life Sciences market in India for CLS. In order to derive the major facts, trends and uncertainties in the Indian Life Sciences market and assess their implications for CLS, the current chapter focuses on the operationalisation of the main research question.
This is done by means of anchoring the research to existing theoretical frameworks and by formulating a set of underlying investigative questions to the concepts as outlined in the conceptual model. The final part of this chapter describes the used research method.
§5.2 Research Scope
The main goal of this paragraph is to define the research scope of the current research by anchoring the research to existing theoretical frameworks.
As outlined in the Problem Statement, the management team of the European headquarters of Corning Life ultimately wants to design a market development plan for India. In the framework of this research, market development is concerned with the increase of sales of Corning Life Sciences’ products in India by means of exporting the products from the European warehouse to India. The combination of the outcomes of this research (the external analysis), and the strengths, weaknesses and the overall strategies of Corning Life Sciences (the internal analysis) will lead to an array of strategic options for Corning’s market development in India. This research field is known as strategic market management and is researched and described by many authors. Two examples include the frameworks constructed by Aaker and Alsem.
Both authors developed highly similar frameworks in the field of strategic marketing management; the basic structure is the same: the combination of an internal and an external analysis leads to the identification of available strategies.7,8 The main differences between the frameworks is firstly, the amount of stress placed on either the internal or the external analysis and secondly, the incorporation of different analyses in the external analysis.
The current research focuses on providing an overview of the Life Sciences industry in India and the forthcoming implications for Corning Life Sciences based on objective market intelligence. The scope of the research is purely aimed at the external analysis of the major facts, trends and uncertainties in the Indian Life Sciences industry. The analyses that will be performed are set out in the research plan in Figure 3 and is based on the conceptual model as depicted in Figure 2.
The Potential Customer and Competitor analyses are found in both Aaker’s and Alsem’s frameworks. The Environmental Analysis is included in Aaker’s model but lacks in Alsem’s one. For the current research the Environmental Analysis is essential as a good understanding of the Indian environment is a crucial aspect of successful market development in India.
7Aaker, D.A., Marktgericht Strategisch Beleid, vierde editie, Academic Service, Schoonhoven, 1996
8Alsem, K.J., Strategische Marketingplanning, Wolters-Noordhoff, Groningen/Houten, 2001
23 The researcher considers both models as rather
rigid as they do not seem to allow a lot of room for the distinctive features of the Life Sciences market. However, as we have seen in both the Problem Analysis and the Conceptualisation chapters, the possibilities of the potential customers and therefore ultimately for Corning Life Sciences are also dependent on the status of the regulatory framework and the availability of timely and sufficient capital. Therefore, both the Regulatory Framework Analysis and Capital Supply Analysis have been included in the external analysis.
With these adjustments, the frameworks as developed by both Aaker and Alsem prove to be highly useful to put the scope of the current research into perspective. Figure 3 provides an overview of the research scope. The research plan will further be discussed in the following paragraphs.
As can be derived from Figure 3, the current research solely encompasses the external analysis; the internal analysis will not be part of this research. The external analysis consists of the series of analyses as depicted in Figure 3 that will be performed consecutively. The outcomes of the external analysis will be translated into the implications for Corning Life Sciences.
§5.3 Research Plan
After defining the scope of this research in the previous paragraph, this paragraph concentrates on the operationalisation of the main research question by formulating a set of underlying investigative questions to the concepts as
outlined in the conceptual model i.e. what is it that Corning Life Sciences needs to know about these concepts in order to be enable them to make informed choices and take timely action for its market development in India. The combined answers to the following investigative questions A until E will provide an answer to the main research question as they give an overview of the major facts, trends and uncertainties in the Indian Life Sciences market and their forthcoming implications for Corning Life Sciences. The answer to the main research question can be found in Chapter 11 of the current report.
A1. How is the Indian economy in general performing and what is the impact of the economic policies as taken by the Indian Government on the attractiveness of the Indian market for CLS ?
A2. Can the political system in India considered to be a stable factor and what is the impact of the geo-political tensions in India on the Indian economy?
A3. How are the Indian culture and the forthcoming business practices influencing the possibilities for CLS in the Indian market?
IMPLICATIONS FOR CLS
EXTERNAL ANALYSIS INTERNAL ANALYSIS
PERFORMANCE ANALYSIS
DETERMINANTS OF STRATEGIC OPTIONS
STRATEGIC STRENGTHS, WEAKNESSES, CONSTRAINTS &
UNCERTAINTIES
STRATEGY IDENTIFICATION
IDENTIFY STRATEGIC OPTIONS
SELECT STRATEGY
IMPLEMENT OPERATION PLAN
REVIEW STRATEGY RELEVANT FACTS, TRENDS, &
UNCERTAINTIES
OPPORTUNITIES & THREATS FOR CLS IN INDIA
Figure 3: Research Scope & Research Plan
Research Scope Source:
Conceptual Model, Roos Houthoff, 2004; Aaker, 1998
ENVIRONMENTAL ANALYSIS
REGULATORY FRAMEWORK ANALYSIS
CAPITAL SUPPLY ANALYSIS
POTENTIAL CUSTOMERS ANALYSIS
COMPETITOR ANALYSIS CHAPTER 6
CHAPTER 7
CHAPTER 8
CHAPTER 9
CHAPTER 10
CHAPTER 11
