Thursday, May 5, 2016
Taking a Business Global
Expanding a company into a global organization can be complex and is not an over-night process. When deciding to expand a business globally a company must understand the value creation it will or will not create before making a final decision. The company must understand their industry and how it will be viewed as well as be accepted globally. The business model also need to be evaluated to ensure it fits a global structure or can be restructured to fit a global structure (Forbes, 2013). There are also aspects such as economics, government, and law that impact the global expansion of any business.
Takeda Pharmaceuticals is a large pharmaceutical organization that has a global footprint already but, as an organization, has been taking steps towards becoming an actual ‘global company’ rather than a company with a global footprint due to having multiple subsidiaries around the globe. The foundation steps for determining whether or not to grow the business globally, evaluating the business model to ensure it is fit for a global expansion, and understanding how the company will fit in a global market have already been completed. Moving forward the company is making internal steps to ensure making the transition from a company will a global footprint to a global organization is successful.
“The globalization from economic aspect has two main components: the globalization of markets and globalization of production” (RISTOVSKA & RISOVSKA, 2014, p 208). When globalizing markets the company is merging different national markets into one big global market and globalizing production is realizing the differences in price and quality factors internationally (RISTOVSKA & RISTOVSKA, 2014). From a pharmaceutical perspective these two impacts are major factors.
“Globalization is a worldwide trend, through which economies in the world lose their borders and connect to each other. The companies are no longer imprisoned in their borders and can implement a wide range of business activities around the world” (RISTOVSKA & RISTOVSKA, 2014). This requires governments to unify socially which will require the formation of unions and trade agreements to push nations into a single business market. This will lead to the “reduction of barriers for trade and foreign investment by most governments, which leads to intense opening of new markets by international companies” (RISTOVSKA & RISTOVSKA, 2014).
When it comes to the pharmaceutical industry compliance is a major part of the business and heavily governed by all governments around the globe. Each market has a different set of regulations, requirements, and tax for producing and selling pharmaceuticals, not to mention the regulations around conducting clinical trials to get the drug to market. Global pharmaceutical companies must be diligent with their communication and compliance to ensure they are meeting the regulations of the country/market they are entering or attempting to enter.
Each county, and many times, individual regions have their own set of regulations and laws around pharmaceuticals. The purpose for such laws in many countries and regions is to protect the lives and welfare of the citizens. Ultimately the goal of the pharmaceutical company should be to better the health of their patients. However, as many are aware, the pharmaceutical industry, as a whole, has not always acted ethically when it came to the well being of the patients.
Value creation “allows [pharma companies] to identify and satisfy unmet customer needs, often at the intersection of science and marketing” (Behnke, Retterath, Sangster, & Singh, 2014). Ultimately, for the pharmaceutical industry, value creation is about seeing a need in a patient and researching way to create a solution to the medical issue. When it comes to Takeda Pharmaceuticals their value creation stems from their diverse portfolio: gastrointestinal, oncology, central nervous system, and cardiovascular and metabolic pharmaceuticals (Takeda, 2016).
While there are many pharmaceutical companies around the globe, Takeda Pharmaceuticals, chooses to strive on innovation and compliance. In order to transition from an international business into a truly global organization Takeda needs to look internally. They need to review their current operations and look for redundancies among the various businesses across the globe. They also need to look at their systems and technology to be on a global system to make information sharing easier and less timely.
Takeda Pharmaceuticals strives on their core values: commitment to improving health, strength from diversity, and people are empowered by passion (Takeda, 2016). This is a sound foundation to move them forward. Currently they are an international organization helping people around the globe with medical issues. In order to move the company forward they need to transition from being an international organization with a footprint around the globe to a truly global organization. In order to make this transition Takeda needs to make steps towards production efficiencies without redundancy and investing in global systems.
Anderson, A., (March 2006). Developing Countries- Amending TRIPS to Promote Access for All. University of Tulsa College of Law. Digital Commons. Retrieved from http://law.bepress.com/expresso/eps/1109/
Behnke, N, Retterath, M. Sangster, T. & Singh, A. (2014). New Paths to Value Creation in Pharma. Bain & Company Inc. Retrieved from http://www.bain.com/Images/BAIN_BRIEF_New_paths_to_value_creation_in_pharma.pdf
Forbes (8 Oct 2013). Five Steps To Expand Your Business Globally. Forbes LLC. Retrieved from http://www.forbes.com/sites/theyec/2013/10/08/five-steps-to-expand-your-business-globally/2/#7d9aff84f06d
Hacklin, F. (2008) Management of Convergence in Innovation. Strategies and Capabilities for Value Creation Beyond Blurring Industry Boundaries. ISBN 978-3-7908-1989-2. Physica-Verla Heidelberg. Springer.com
RISTOVSKA. K., & RISOVSKA. A. (2014). THE IMPACT OF GLOBALIZATION ON THE BUSINESS. Economic Developments/Ekonomiski Razvoi. 16(3),205-213
Takeda (2015); Retrieved from http://www.takeda.com/company/
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