Data Mining * Data Analysis * Interpretation * Strategy * Recommendations
If you are asked for the best country to start an expansion program in LATAM, you amongst other managers will answer Brazil and Argentina as the first choice. The reason for that is that the size of the countries is in your mind. But the equation “big country = huge profit” is too easy. To find the best candidate in strategic expansion planning you have to use a series of equations with multiple unknowns.
That sounds like a mathematics lesson? Yes, of course! Optimization processes always include a lot of figures, related to each other by mathematical operators. Pharmaceutical marketing departments are overloaded with figures, who describe the transparent customer in every detail. But are there enough data for future markets and the customers forming his market?
A study on Drug Regulation in Latin America - A Guide for Small Business (S. Bastian, Nov 2012) describes an approach for the identification of the most profitable countries to access in a new area of the world. Therefore a stepwise decision way is established resulting in 3 groups of countries - most profitable, more or less profitable, and not profitable.
To identify the most profitable countries key indicating figures are chosen – size of the country usually is not included in this key indicator’s list. Socio-economic data are more suitable to get an impression on the financial and educational situation in the country. If there is only limited purchasing power no customer will spent money for pharmaceutical products and only customers who understand the need of special medical care will use medical products.
These and other parameters have to be identified, collected and carefully analyzed to reflect a picture of the countries to be selected in detail. Some countries will not take this mathematical hurdle.
In the second step the classical market analysis can take place – more figures on market size and growth rates, pricing, supplemented by political factors like governmental support, trade agreements etc. will be collected and analyzed. The study summarized here excluded Brazil and Argentina as profitable candidates for a drug approval in Latin America after the analysis of the socio-economic data and the subsequent market analysis. The most profitable countries to start business were identified as Chile and Mexico.
S. Bastian (2012): Drug Regulation in Latin America - A Guide for Small business
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