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Third, Indian companies place a higher priority on applying technologies and expertise to
business management which reward the companies with lower costs. For example, Ranbaxy
has established a so-called 'superiorrisk-management based on cost-effectiveness' model,
which makes it possible to discover a new drug at the cost of $1,200-1,800 million, while their
counterparts in the West would need a budget of $5,000-8,000 million.
Fourth, India has more talent available for business. The McKinsey report pointed out that India has
more experienced executives and trained engineers available in terms of both quantity and
international profiles. In addition to this, the Indians have the advantage of language background and
deeper International understanding. In comparison, Chinese SOEs and booming POEs are lacking the
resources to compete with MNCs in attracting and retaining sawy executives.
LEARNING LESSONS FROM INDIA AND PLANNING FOR CHINA
With a vision set on the international market, leading Chinese pharinaceutical companies
declared "external learning from India, and interr.al learning from Hisun (Hisun is one of the
largest buik API manufacturers in China)" when planning their strategy. The question is: what
are the lessons we can learn from India's success?
Core competence must be identified before entering the international market. In the three-
stage-development process, Indian companies established different competencies and
competitive ad:antages during difierent stages. From a realistic point of view, the core
competencies of Chinese companies probably include special API, low cost R&D, upstream
supply chain or off-sh.cring service. Tasly, a Tianjing based top pharmaceuticals company, is
striving to establish its competence in TCM (traditional Chinese medicine), R&D and
formulation expertise.
A clear strategy tailored to specific enterprises should be created and well defined. Most
Chinese companies simply take some vague slogans as their strategy and therefore have
neither a map nor a compass for their risky journey into the international market. Gordon R.
Orr pinpointed the problem that international expansion is good, but not for every company,
"to most, the least appealing choice is to continue along the present lines and run the risk of
becoming, at best, a leading regional player". Specifically for pharmaceutical companies, most
don't even understand their own enterprises well enough. Mr. Lu Chunming, selling anti-
malarial Dihydroartemisinin in more than twenty African countries, has a better understanding
of the looming challenges: the bottleneck of Chinese companies is more than the registration
barriers, as registration is only the beginning. The product pipelines, international marketing,
cross-cultural branding and distribution all have to be tackled by inexperienced Chinese
players. Therefore, once deciding to go global, the Chinese pharmaceutical firms should be
committed to the venture by investing n market intelligence, product innovation, and
continuous quality improvement to as to improve their core competence. Here is another case.
Artemisinin, a Chinese-owned intellectual property, and HIVIAIDS products made in China ave
not received any WHO certification yet; as a result they are not qualified