Running head: PROJECT 5 – MEDICORP INTERNATIONAL BUSINESS PLAN

MediCorp International Business plan

Brazil,

Traction Equipment

Partnership Business,

MediCorp & New Tech

December, 2021
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Table of Contents
1- Executive Summary 3
2- Introduction 5
3- Marketing Strategy 5
3.1- Market Analysis 6
3.2 Potential Customers Characteristics 6
4- Marketing Plan 7
4.1 Value chain: 7
4.1- Major Competitors 7
4.2 PESTEL Analysis 9
4.3 Mode of Entry 10
5- Governance and CSR 11
6. Financial Projection 11
6.1- Financial Assumption 11
6.2- Market Share Projection 11
6.3- 3 years Revenue Forecast 13
7. Strategy Implementation 13
7.1- A Balanced Score Card 13
7.1.1 Business Process Perspective 14
7.1.2 The Learning and Growth Perspective 14
7.1.3 The Financial Perspective 14
7.1.4 Customer Service Perspective 14
8- Conclusion 15
9- Reference 16
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1- Executive Summary

This business plan is for MediCorp to enter Brazilian $5.5 Billion market for the delivery of

traction equipment through a legal partnership structure with NewTech.

Objectives:

MediCorp deals in the supply of medical devices and equipment. This business plan

shows the plan of Medicorp to enter into Brazil market with Traction medical equipment. Traction

medical equipment is used in Traction therapy. In this therapy, the group of muscles stretched with

the help of traction equipment to reduce the muscles spasm. This business plan aims to analyze the

market of Brazil to enter the market for the Traction equipment.

Methods:

To formulate a business plan, the main research method to be used is research, especially

market research. The research in this business plan to include the complete market analysis of

Brazil market of traction equipment, that include competitive customers of Brazil, entry mode,

what marketing strategies to be implemented so that MediCorp can add value to gain a

competitive advantage so that MediCorp can run their business more efficiently, and research of

financial projections.

Results:

Traction device is majorly used in traction therapy as term transaction means numerous ways

for separating the lumbar vertebrae along with the infer superior axis of the spine using

mechanical force and this equipment help in various ways:

● It helps to reduce the muscle spam by stretching the group of muscles

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● It helps to put tension on a joint or bone that is displaced

All these conditions are increasing in Brazil Day by day as in Brazil these kinds of issues are

leading towards the disability from 1990 to now there is increase of 79% disability in Brazil

(Giovanni Ferreira,2019) all these conditions shows that Medicorp with the supply of Traction

equipment will gain the market in Brazil as it can be used to manage these kinds of pains.

Recommendations:

MediCorp should first consider the demand of Traction equipment in Brazil market. For this

they must make sustainable and trustworthy relationship with local authorities, hospitals, and

pharmacies. This will help in attaining customer demand, so that customization in traction device

can be done according to the usage of Brazilian market. In addition, MediCorp should focus on

increasing the awareness of traction therapy in Brazil.

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2- Introduction

The pains of joints, bones, spasms, and pressure on the spine are increasing worldwide as many

people suffer from these kinds of pain, especially from tense nerves, disc disease, and many other

backbone conditions. These lower back pains are most common in women, and this pain occurs

due to stressed muscles or tissues in the back. According to research, almost 540 billion people

suffer from back pain all over the world, including Brazil (More than 1 in 10 Worldwide Suffer

Lower Back Pain, 2018). The best treatment for lower back pain is traction therapy, in which

traction equipment is used. The traction equipment is a simple medical device used to put tension

on the joint or muscle that is displaced, and this device also helps to stretch the muscles to

decrease the spams of muscles (Traction Therapy - an Overview | ScienceDirect Topics, 2011).

The lower back pain and joint issues are increasing in Brazil, and this is also causing disability.

(Giovanni Ferreira,2019)

The industry in which MediCorp is operating involves distributing medical equipment and

supplies at the wholesale level to the pharmaceutical industry and hospitals (government and

private). The NAICS code of this industry and medical equipment selected is 423450 (NAICS &

SIC Identification Tools, n.d.)

This business plan shows the mode of entry, a market analysis of how MediCorp is to enter the

Traction equipment market in Brazil, and the financial projection for 3 years. MediCorp will add

value to the product by using the latest technology to gain competitive advantage.

3- Marketing Strategy
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3.1- Market Analysis

The current population of Brazil is 214,734,593 as of 2021 (Brazil Population -

Worldometer, 2021). Brazil is on 6th rank in the world populated country, among 195 countries. There

are 540 billion people who suffer from back pain and joint pressures. The lower back pain and

bones, disc diseases, and nerve tension is increasing in Brazil. This increases the potential

customers for MediCorp, which shows that the MediCorps market will grow more in the coming

years.

3.2 Potential Customers Characteristics

MediCorp needs to understand the characteristics of its potential customers in the Brazil

market regarding the Traction Equipment. Following are the characteristics of Potential

Customers:

● Demographic: Categorization based on age, gender, and sex.

Brazil's life expectancy is 75 years (Brazil - Place Explorer - Data Commons, 2020), and around

the age of 40, people start facing severe back pains and other joint disorders. It means this group

of age is seeking more traction equipment to manage pain.

● Geographic: Based on the region.

The population in urban areas are increasing in Brazil as in 2020, 185,081,854 people live in

rural areas (Brazil Urban Population 1960-2021, 2020), and most people from urban areas

face back pains, joint and bones disorders because of unhealthy diet. The medical facilities are

more available in urban areas and to reduce these pains they can go for traction therapy, which

means people from urban areas are more likely to be customers of MediCorp for traction

equipment.

● Psychographic: Categorization based on behaviors, attitudes and lifestyle.

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In the urban areas of Brazil, people have a modern lifestyle. They are more like to consume

unhealthy diet and have an inactive lifestyle. Hence again, the potential customers for MediCorp

for traction equipment will be people based in urban areas with the age group of between 40 -75

years and people having an inactive lifestyle.

4- Marketing Plan

4.1 Value chain:

The value chain is described as a chain of activities in which more value is added to the product at

each activity level (Dobbs,2014). Through the following methods MediCorp can add value for

gaining a competitive advantage:

● Use of Technology: MediCorp can add value to traction equipment by using the latest

tools and technology in the production of traction equipment.

● Distribution Channels: Distribution activity helps add value in production, so MediCorp

should increase its distribution channels in order to add value to the traction equipment

● Brand Name: MediCorp is known brand, hence MediCorp should enter into Brazil with

the name of MediCorp on traction equipment, as this will increase customers' confidence.

4.1- Major Competitors

This part of the business plan shows the major competitors of MediCorp in the Brazilian

market. The list below shows the major competitors of MediCorp medical device 'Traction' in the

Brazilian market according to their market share.

1. St. Jude Medical Inc. (USA)

2. Siemens AG (Germany)

3. Johnson & Johnson (USA) (Medical Devices Market,n.d)

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4.1.2- Bargaining Power of Suppliers

Supplier for the MediCorp in Brazil market will have average bargaining power on MediCorp as

in Brazil many supplies can provide raw material, tools, and equipment to MediCorp according to

the data given in flandersinvestment website related to industry health Brazil study.

4.1.3 Bargaining Power of Buyers

The bargaining power of buyers will be high for MediCorp as there are several international

companies (mentioned above) operating in this market. Still, MediCorp can lower the bargaining

power of buyers by producing products at a lower cost.

4.1.4 Threat of New Entrants

It requires a high level of technology and expertise to enter in to traction equipment market, hence

the threat of new entrants is low for MediCorp.

4.1.5 Threat of Substitute Products

The threat of substitute products is average for MediCorp as in traction therapy; only traction

equipment is used and other exercises are used to cure the pain according to the research given in

health line related to lower back treatment options. Again, MediCorp can reduce this threat by

providing traction equipment at a low price.

4.2 PESTEL Analysis

Political

Brazil government spends almost 9.1% of its Gross Domestic Product on the health care

sector. The rules and regulations regarding the tax on medical equipment allows for the general

population to afford medical equipment.

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Economic

Economic factors are based on buying power of buyers, which get affected by the inflation

rate, interest rate. In Brazil buying power of buyers are increasing (World and regional statistics,

national data, maps, rankings. Knoema, 2021).

Social

MediCorp must have proper knowledge of social factors, including norms, values, and

beliefs of people, and must understand how people are reacting towards the use of traction

equipment and its use.

Technological

Nowadays, technological factors have a significant impact on medical equipment. Through

the proper use of advanced technology, products can be produced easily and fast as MediCorp uses

cutting-edge technology for production. This will have a positive impact on MediCorp.

Environmental

Climate change, pollution, and resources availability come under the environmental

factors; Brazil government takes strict action towards environment safety that's why the company

must follow the regulations and do the production with the use of renewable resources and less

pollution.

Legal

Brazil has strict laws regarding the copyrights of data and trademarks and has proper legal

procedures to help MediCorp enter the market.

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4.3 Mode of Entry

Identifying the mode of entry for every business is a critical part. MediCorp can use

various ways to enter into the market, including partnership, buying another company, exporting

the products or creating subsidiaries in Brazil to capture the market of Traction Equipment in

Brazil. According to my perspective, partnership or exporting is the best way to enter the Brazilian

market.

The reason exporting can be best mode of entry as it will reduce the cost of operation for

MediCorp and the main reason is that there is less risk in exporting entry of mode as compare to

other mode of entry. Moreover, exporting business is the fastest mode of entry for MediCorp in

Brazil market.

Cultural Comparison

It's essential to do a cultural comparison between the USA and Brazil markets so that

MediCorp can identify major risks that MediCorp can face in the current culture of Brazil.

Following aspects shows the cultural difference between the US market and the Brazil market:

1- Brazil has a score of 59 in indulgence, which shows that people like to spend leisure time

here and have a positive attitude compared to USA society as indulgence score of USA is

high (68) which shows people in USA play and work hard.

2- The power Distance score of Brazil is high compared to the USA, which is 69, which

shows people in Brazil accept that inequalities are acceptable.

3- The individualism score of Brazil is 38, and the USA score is 91, which shows that people

in Brazil are more connected in groups and belong to a collective society as compared to

the USA, where is individual society more.

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4- Brazil's score is 49 while the USA score is 62, which shows that in Brazil, they focus more

on caring for others and quality of life (Brazil,2017)

5- Governance and CSR

It is important to examine the rules and regulations of Brazil as they will have an impact on

MediCorp business because health care is one of the strongest attribute of Brazil MediCorp,

through its supply of traction equipment in Brazil, is providing benefits to people in improving

their lifestyle and reducing the issue of back pains, muscle, and joint issues. Because of this

reason, MediCorp business will be highly favored In Brazil. As MediCorp is committed to social

responsibility and provides benefit to the society and community since, their values which are

stated on the official website of MediCorp includes integrity, ethics, and respect, as in MediCorp

they treat everyone equally and there are high professional standards. This shows the positive

impact of business on Brazil. Moreover, MediCorp takes a view of sustainability as making a

balance between business priorities and economic and social priorities which shows that they have

strong corporate governance as MediCorp stated that in acknowledgement of their compliance

with the International Organization for Standardization's requirements, they were awarded the

ISO9001:2015 accreditation.

The ISO 9000 set of standards covers a wide range of quality management topics. Companies that

wish to ensure that their products and services continually fulfil consumer needs and that quality is

consistently enhanced can use the standards as guidance and tools. This standard is founded on a

variety of quality management principles, including a strong customer focus, top management

motivation and involvement, a process-oriented approach, and continuous improvement.

To fulfil its corporate social responsibility, MediCorp should take care of society and the

environment by doing business activities that do not destroy the environment.

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6. Financial Projection

The first financial projection is a financial assumption in terms of the price. MediCorp will

constantly provide traction equipment at $500 for three years without any change. It can be

assumed that every year the growth of potential customers will be continuous for 1575198* in

terms of Brazil population as this figure is average of growth rate of Brazil population shown in

Table 1.

*(1509890+1580204+1635500 /3=1575198)

Market Share Projection

MediCorp needs to do market share projection because market share projection helps to

create competitive edge. Moreover, market share is the key to creating demand in the market and

competition for the businesses (Blundell, Griffith,& Van Reenen,1999).

Table 1: Population Information about Brazil

Year Total Percentage Population Urban

Population change change Population

2020 212559417 0.72% 1509890 186217070

2019 211049527 0.75 1580204 184407548

2018 209467323 0.79 1635500 18254659

Table 1: All the data given in table 1 is collected from the official website of worldometers.info.
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As the population of Brazil in 2020 has increased as compared to 2018; moreover, the urban

population is also increasing. That is, potential customers of MediCorp, as already stated above in

characteristics of potential customers, the urban population faces more problems regarding lower

back pain, joints, and muscle issues. As this population is increasing every year in Brazil, it shows

that the demand for traction equipment will increase more in the future.

According to research in Brazil, the number of people having low back pain is around 25 million,

which is even growing, so the use of traction devices in traction therapy and healthcare is

increasing in Brazil (David, 2020)

MediCorp can assume that out of a total population of 212559417 (2020), 187,559,417* could be

potential customers of MediCorp in 2020.

*212559417-25,000,000 = 187,559,417

The data given below shows the market estimate of MediCorp in terms of potential customers for

the next three years:

 In the First year 2021-2022, the goal of MediCorp is to 1/6 of the market size:

189,559,417+1575198

= 191,134,615× 1/6

= 31855769.2

In the second 2022-2023 the goal of MediCorp is to 1/4 of the market size:

191,134,615+ 1575198

= 194,285,011× 1/2

= 49,358,851.75
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In the second 2023-2024 the goal of MediCorp is to 1/2 of the market size:

192,709,813 + 1575198

= 192,709,813× 1/4

= 97,142,505.5
6.3- 3 years Revenue Forecast

If we take the price of $500 according to the health.costhelper website. Following figures show the
3 years revenue projection of Medicorp for traction equipment in Brazil market:

2021-22 = 31855769.2 × $500= 15,927,884,600

2022-23 = 49,358,851.75 × $500= 24,679,425,875

2023-24 =97,142,505.5 × $500= 48,571,252,750

No. Of units of traction equipment to be sold by MediCorp in next 3 years:
Total Revenue of three years/ unit Price
= 89,178,563,225/ 500
= 40,704,452,980.5 units.

7. Strategy Implementation
7.1- A Balanced Score Card

Organizations use the Balanced Scorecard to solve problems or to increase performance. Balanced

scorecards evaluate performance and formulate strategies for the organizations as it is a strategic

method to evaluate and implement strategies. (Nørreklit, Kure, & Trenca, 2018) Following are the

four areas in which Balanced Scorecard deals:

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7.1.1 Business Process Perspective

The business process perspective comes under the internal business process as it deals with

internal objectives of business (Ahn, H.2001). As in the case of MediCorp, the business process

perspective is to increase the quality of Traction equipment and reduce wastage.

7.1.2 The Learning and Growth Perspective

The learning and growth perspective includes systems, employees, knowledge, and skills used in

the business's operation (Machmuddah, & Setiawanta, 2019). Medicorp needs to ensure they have

trained employees and the latest technology for the business operation. Medicorp is fulfilling this

perspective as they have both skilled employees and the latest systems, and for the learning,

MediCorp should organize proper training for employees.

7.1.3 The Financial Perspective

This perspective deals with the financial terms of the business and perspective related to the

financial objectives and goals of the business. The financial perspective for MediCorp is to make

revenues according to the financial projection mentioned above and to increase the marketing of

Traction equipment in Brazil to gain a competitive advantage.

7.1.4 Customer Service Perspective

Knowing the wants and needs of the customer is important as this perspective majorly deals with it

as it increases customer satisfaction (Shih-Jen, & McKay,2002) Medicorp should fulfil this

perspective by looking into the demand of the market of brazil and by looking into potential

customer characteristics.
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8- Conclusion

Lower back pain and different joint and muscle issues are very common throughout. It is

increasing more and leading to disabilities, as mentioned above in the introduction. Brazil is also

facing these issues as a large number of people are going through this, as already mentioned

above. MediCorp deals with both manufacturing and selling Traction equipment as it is a medical

company. This traction equipment helps to reduce these pains and provide relaxation to muscles

through stretching. This business plan related to Traction Equipment selling in Brazil by

MediCorp is profitable. There is a huge demand for traction equipment in Brazil because many

people face issues and gain a competitive advantage. MediCorp should always do proper research

on the market to continue to gain a competitive advantage.

According to research, the number of people in Brazil with lower back pain, joint issues, and

disability is increasing, which means that demand for this medical equipment will increase more in

the future. This shows that choosing the Brazil market for business expansion is a good choice.

But one thing that MediCorp has to take into consideration is that in the Brazilian market,

international companies are already operating in the medical device industry. So, MediCorp must

use the latest technology and innovation so that they can provide traction equipment at a lower

price as compared to competitors.

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