1. SWOT: Genzyme in China Strengths Weaknesses International capabilities
Reimbursement system
Effective drugs
Reputation
Industrial leader
Expensive drugs
Healthcare systems
Resource focus
Opportunities
Threats
Biotech vs. Pharma reputation
Global pioneer
Emerging markets
Political uncertainity
Expensive distraction
IPR protection

2. SWOT: China’s biopharma industry
Strengths
Weaknesses
Governmental support
Investments in R&D
Business culture
Low cost structure
Supplier and distribution networks
IPR protection
Management skills
Brand names
Infrastructure
Small biotech industry
Opportunities
Threats
Partnerships and collaborations
Domestic market in growth
Process improvements
Generics & biosimilars
Traditional medicine
Stem cell cure
Regulatory framework and enforcement
Investment barriers
Reputation

3. Model Framework Environmental Scan Internal Analysis External Analysis
Strengths
Weaknesses
Opportunities
Threats
SWOT Matrix
System
Dynamics
China’s Industry
Genzyme
Scenario analysis
Strategies

4. Hypothesis ROW 1 CHINA 1 ROW 2 CHINA 2 Orderly index
Not only China is moving towards anarchy
The rest of the world is deteriorating slowly
Time

5. Orderly State CHINA ROW Orderly The Dragon Best case scenario Orderly
Isolation
Marginal
Worst case scenario
Anarchy
Orderly
Anarchy
ROW

6. Competitive Cost AdvantageB
Low Cost
GDP & Salaries
Cost savings on their own are not the primary considerat ion for biotech and pharma industry
Chinese
competitors’
capabilities
Process
Innovation D C
Innovators/IPR
Domestic Markets
Global platform
Genzyme (Strategy)

7. R&D engagement Make captive Remain Investmets in-house In China
Strategic importance
Driver of competive advantage
IP risks
-Regulatory risks
-Operational risks
Invest to
Improve
feasibility
Outsource
to China
Feasibility
Availibility of reliable vendors
Ease of technology transfer
Interdependcy
Well defined activity

8. SWOT Matrix Best case Strengths Weaknesses Opportunities Threats
S-O Strategies
1. Partner & Aquire
2. Use China as strategic lever for
helping companies achieve China
ambition
3. Lab works and clinical trials will
halve the rentals, wage bills and
Overhead
4. Companies set up new vendor
Relations, R&D facilities, research
alliances
W-O Strategies
1.Get Excellent lawyers and translators
2. Reduce transactions costs involved
3. Relocate the necessary Western staff, importing equipment and supplies
4. Ensure good maintenance of that equipment
Threats
S-T Strategies
1. External foreign companies
2. Try to increase productivity and security (reduced productivity in the short term)
3.Use brand
4.Use the legal system
W-T Strategies
1. Do not reveal complex manufacturing process
2. Trade secrets & Patents
3. Keep propritary assets secret for foreign companies
4. Keep government notified

9. SWOT Matrix Worst case Strengths Weaknesses Opportunities Threats
S-O Strategies
1. Capture some output of trained science graduate
2. Invest in a very large pool of talents of local talents
3. Set up new vendor relations
W-O Strategies
1. Language
2. Culture
3. Scientific skills
Threats
S-T Strategies
1. Companies set up new vendor
relations
2. Invest in a very large pool of
talents of local talents
3. Investmensts in R&D
4. The high output of trained
science graduate students
W-T Strategies
1. Fraction the know how
2. Penalty system
3. Defensive strategies...

10. Recommendations
Genzyme should enter the Chinese market carefully and learn from
the experience:
Productivity will be threatened in the short term in unfamiliar countries hiring local staff , extra challenges bridging differences in business and technical practices regulatory and legal requirements and culture and language
Has the chance to help shape the future of the Chineses health care market and to consolidate their own position within it
Can contribute to the discussion on reforming the health care system; they can expedite the implementing of highest quality standards for innovative drug discovery and development
by building strong relationships from the outset with key opinion leaaders and officia, an MPC will improve its chances of faster approvals, advantageous pricing and speedier access to the market.
Trangenics and stem cell reseach

11. Extra: The Strategic game
Labor costs and overhead
Scientific talent and managent capability
Quality control during development phases
Regulatory barriers in clinical trials
The flow of returnees trained in the west helps to invigorate the nations scientic communitiy
IPR security
Select areas of activity and research topics

12. Extra: Odds looking good 1
A very large pool of talents of exandably looking good
Investments in R&D expandable
High output of trained science graduate students more than US
In a few years more graduates than the US in lifesciences in medecine
It has reasonably advanced in clinical trials and lower complexity chemistry work
Less so in preclinical and biology based drug discovery

13. Extra: Odds looking good 2
Companies set up new vendor relations, R&D facilities, research alliances
Productivity and is threatened in unfamiliar countries hiring local staff , extra challenges bridging differences in business and technical practices regulatory and legal requirements and culture and language
The more R&D that MPCs conduct in China (as long as they do it sensitively and efficiently) , the more opportunity they have to help shape the future of the Chineses health care market and to consolidate their own position within it.
Specifically they can contribute to the discussion on reforming the health care system; they can exedite the implementing of highest quality standards for innovative drug discovery and development.
They can encourage the develoment of new technologies that are shunned by other governements (such as trangenics and stem cell reseach); they can expand their alternative sources of comounds by investigating traditional Chinese medicine with the techniques of modern drug discovery; and through various well chosen research undertakings, they can gain ear and confidence of government officials, hospital administartors and key oinion leaders, thereby enhancing their market prospects
The last point needed to be made to be kept very much in mind by MCs when they devise their China strategies: by building strong relationships from the outset with key opinion leaaders and officia, an MPC will improve its chances of faster approvals, advantageous pricing and speedier access to the market. The surest way to build such relationships is to show commitment – both for the long haul and to the advancement of China’s own R&D capabilities. Making captive investments demonstrates commitment of the first deepening involvement throughout the value chain demonstrates commitment of the second kind.

14. Extra: SWOT Matrix
S-O strategies pursue opportunities that are good fit to the company’s strengths
W-O strategies overcome weaknesses to pursue opportunities
S-T strategies identify ways that the company can use strengths to reduce its vulnerability to external threats.
W-T strategies establish a defensive plan to prevent the company’s weaknesses from making it highly susceptible to external threats.