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An Analysis of Core Competency among Chinese Medicine SMEs / 中国医药类中小企业的核心竞争力探析


Author: Liu Hanbin
Date: May 2, 2014

An Analysis of Core Competency among Chinese Medicine SMEs

Since entering the WTO in 2001, the Chinese government has altered and implemented many laws and regulations to fit WTO standards and adapt to the trend of globalization. Among these changes, China has slowly reduced tariffs on medicine imports and opened the sales distribution market. In addition, the rich foreign human resources within China countries and the low cost of research and development are factors that attract many pharmaceutical companies to invest in China. These companies include international giants such as Pfizer and Glaxo SmithKline and Roche. Facing this high risk and high profit market, SMEs in the international and domestic realm are “caught” between survival and development. These companies must clearly identify which factors can form the core of their competitive power – their core competencies – their production comparative advantage, and create their own brand influential power.
So-called core competency refers to the accumulation of resources within the organization. This includes the original production technology and logistics processes as well as the coordination of different production technology and organic and inorganic resource power. Core competency is a company’s uniqueness that is hard to copy and it sustains the company’s sustainable competitive advantage core competencies. Once a company has formed this kind of long-term development ability, it will not be able to be replaced in the market chain. In order to better foster pharmaceutical companies, especially SMEs’ core competencies, we must thoroughly understand this point of the market. Actually, this generation of the pharmaceutical industry began after World War II and since then has developed to the present with a high speed. In the ’50s and the ’60s, the ten year rate of growth surpassed 150%. In the ’70s, the speed reached 260%, and in the ’80s, because of sluggishness of the world economy, the yearly average fell to 8%. From the ’90s to the beginning of the 21st century, the average rate of growth for pharmaceutical companies has stayed between 7% – 10%. According to numbers from the National Bureau of Statistics, in 2010, international pharmaceutical market sales reached 760 billion USD, an enormous market.
According to analysis of Chinese pharmaceutical companies, this market has the following special qualities: 1) relatively decentralized management and low industry concentration. Even though the top-ranked businesses in the market have not yet broken through the top 5% of the top ten names in the market take up less than 40%. and the top ten pharmaceutical companies in China form less than 20% of the market. This means that the domestic Chinese pharmaceutical market is still in a very competitive period. 2) the cost of research investment is relatively low. Looking at the past thirty years of development, the enormous profits in the pharmaceutical industry come from having monopoly over new drugs – some international pharmaceutical giants often have have 1-2 leading products that maintain their company profits. But capital investment needed to fund the research of new drugs is astronomical and according to statistics, the average cost of of R&D for new drugs is $5-10 billion, and on the Chinese side, the cost of generic drugs is also $100,000. Foreign investment in drug R&D is generally 8 – 20% of sales, while the average investment for SMEs is less than 1% of sales. The lower R&D investment pressures pharmaceutical SMEs in both the international and domestic markets, making survival hard. 3) The structure of production is imbalanced. Most importantly, this shows that intra-production is uncoordinated: that chemistry development is fast but the development of medical equipment, pharmaceutical equipment, and medical packaging all remain slow. Also, within the pharmaceutical industry, raw materials for drugs are developed quickly while the preparation for production is slow and most ??? [materials?] doe not meet GMP standards, so it is hard to enter the international market. 4) Company information management systems are not well established. Pharmaceutical company development involves others in the pharmaceutical chain, such as logistics and e-commerce platform design. However, presently the information management systems of SMEs are in the very beginning stages, which severely impacts the effectiveness of companies’ development.
Even with a large investment for development in pharmaceutical companies, implementation has strict requirements. SMEs face strong competitors and their share of the market is small. But Chinese pharmaceutical SMEs can still form their own distinctive “core competencies,” and they can learn from several strategies: 1) Focus on core business and optimize supply chain management. Because SME liquidity is small, they do not have the advantage of scale and once they have failed to expand they face being bought by another company or going bankrupt. For this reason, these types of enterprises should be based on supply chain and supplying raw materials – production plants and warehouses – and provide downstream outsourcing services to non-core businesses that are capable, while their own focus can be on the flow of information, logistics, and follow-up services, thus “encouraging the article.” In this way, the advantages of the work unit form the overall core competitiveness of the SME. 2) Maintain the flexibility of enterprise development and build good, strategic alliances. Compared with large enterprises, SMEs are small and have a good deal of autonomy in decision-making, and the cost of internal coordination is quite low. This flexible autonomy makes the development period design of such enterprises very different, and different production management organization must use the most innovative way to manage the market. Meanwhile, SMEs should form internal alliances with complementary companies modestly acquiring specialty companies, forming strategic alliances, using mutual resources and technology, and participating in market competition. 3) Establish communication channels with large enterprises at home and abroad. Tracking global patent protection periods for medicine, SMEs can then come up with a structure to implement its own follow up earlier. In this way, SMEs can apply early for qualifications to compete with generic drugs in the international market and obtain their own market exclusivity.
Presently, the Chinese pharmaceutical industry is in a tough period of adjusting its production, but this is also an opportunity. By finding their comparative advantages, practical strategies for flexible planning, and continuing to look for a way to integrate resources, in this “window period,” China’s pharmaceutical SMEs can quickly embark on the road of healthy development, forming national brands and participating in international market competition.

Writer: Liu Han Bin, Hopkins Nanjing Center Certificate ’13

作者:刘瀚斌
2014年05月02号

中国医药类中小企业的核心竞争力探析

自2001年中国加入WTO后,为了适应经济全球化的趋势,中国政府修改和制定了许多符合世贸组织规则的法律。其中在医药行业,中国逐渐降低进口药品关税、开放医药分销市场。另外国内丰富的人力资源、低廉的研发成本等因素吸引了众多制药企业来华投资,其中不乏像“辉瑞”、“葛兰素史克”、“罗氏医药”这样的国际大鲟。面对这个高风险高利润的市场,中小企业要在国际国内众多企业的“夹缝”中生存和发展,必须认清自身有哪些因素可以形成核心竞争力,产生比较优势,产生自己的品牌影响力。
所谓“核心竞争力”,是指一个组织内的积累性资源,它包括原创的生产技术和物流流程,以及协调不同生产技能和有机整合不同资源的能力,它是企业独具,难以复制,支撑企业可持续性竞争优势的核心能力。一旦企业形成这种可维持其长期发展的能力,它将在整个市场链条上不可替代。为了更好的培育医药企业,特别是中小类企业的核心竞争力,就必须深刻了解该行业的特点。事实上,现代医药工业起步于二战之后,自发展以来就一直保持高速增长。在上世纪50-60年代,十年年均增长率超过150%;到了70年代,增速达到极点至260%;80年代由于全球经济衰退影响,年均增长率降至8%;从90年代至21世纪初,医药行业的年均增长一直保持在7%—10%左右。根据国家统计局的数字显示,2010年国际药品市场的销售额达到7600亿美元,可谓市场体量巨大。
根据对中国药企的分析,该行业存在以下几个特点:1.相对分散经营,产业集中度较低。即使世界排名第一的企业市场占有率也未突破5%,前十名的市场总占有率不足40%。而在中国十家最大的医药企业市场总和也不足20%。这表明国内的医药行业市场仍然处在一个激烈竞争的时期。2.研发投入较低。从过去30年的发展来看,医药市场的巨大盈利往往来自于某一种新药的垄断,国际上一些医药巨头,往往都拥有1-2个主导产品支撑其企业的盈利。但是研发新药的资金投入却是天文数字,据统计,发达国家每个新药的平均研发成本约为5-10亿美元,中国仿制药的费用也在100万。国外新药研发投入一般为销售额的8%——20%,而中小企业的投入平均不到销售额的1%,较低的研发投入使得医药类中小企业在国际国内双重压力下生存。3.产业结构不平衡。这主要表现在产业间发展不协调,化学制药发展迅速,而医疗器械,制药器械,医用包装材料行业发展缓慢;另外,在制药工业内部,原料药发展很快,制剂生产较慢,其大多数不符合GMP标准,很难进入国际市场。4.企业信息化管理系统不健全。医药企业的发展涉及其他诸如医药连锁,物流配送和电子商务平台的设计。可当前中小企业这些信息化的管理基本处于极为初级的阶段,严重影响企业的高效发展。
虽然医药企业的发展投入大,实施要求严。中小企业面临的竞争对手强,市场份额小。但中国医药类中小企业完全可以形成自己富有特色的“核心竞争力”。以下的几种策略可以借鉴:1.专注核心业务,优化供应链管理。由于中小企业流动资金少,不具有规模优势,一旦扩张失败即面临被收购或破产的危险。因此,这类企业应该以供应链为基础,从原材料供应——生产工厂和仓库——下游客户入手,将非核心的业务外包给其他有能力的企业完成,而自身在信息流,物流,后续服务方面“做足文章”。从而使各协作单位的优势资源形成整体的核心竞争力。2.保持企业发展的弹性,善于建立战略联盟。与大型企业相比,中小企业规模小,决策自主权大,内部协调成本低。这些灵活的自主权使得这类企业可以在不同发展时期设计不同的生产管理的组织方式,以最符合市场的方式管理创新。同时,中小企业应该在内部与优势互补的企业形成联盟,适度的收购一些有专长的企业,形成战略联盟,利用相互各自的资源与技能,参与市场竞争。3.与国内外大型企业建立信息沟通渠道。跟踪全球专利药的保护期限,结合自身实力提前进行仿制跟进。向国际大企业争取非专利药的第一申请人资格,从而获得市场独占权。
当前,中国的医药行业处于痛苦的产业调整阶段,但是这个时期对中小企业既是挑战,更是机遇。通过找到自己的比较优势,进行灵活切实的战略规划,不断寻找和整合社会资源,中国的中小药企,在行业调整的“窗口期”完全可以迅速走上良性发展的道路,形成民族品牌,参与国际市场的竞争。

作者:刘瀚斌,届证书班 2013

Author: Liu Hanbin
Date: May 2, 2014

An Analysis of Core Competency among Chinese Medicine SMEs

Since entering the WTO in 2001, the Chinese government has altered and implemented many laws and regulations to fit WTO standards and adapt to the trend of globalization. Among these changes, China has slowly reduced tariffs on medicine imports and opened the sales distribution market. In addition, the rich foreign human resources within China countries and the low cost of research and development are factors that attract many pharmaceutical companies to invest in China. These companies include international giants such as Pfizer and Glaxo SmithKline and Roche. Facing this high risk and high profit market, SMEs in the international and domestic realm are “caught” between survival and development. These companies must clearly identify which factors can form the core of their competitive power – their core competencies – their production comparative advantage, and create their own brand influential power.
So-called core competency refers to the accumulation of resources within the organization. This includes the original production technology and logistics processes as well as the coordination of different production technology and organic and inorganic resource power. Core competency is a company’s uniqueness that is hard to copy and it sustains the company’s sustainable competitive advantage core competencies. Once a company has formed this kind of long-term development ability, it will not be able to be replaced in the market chain. In order to better foster pharmaceutical companies, especially SMEs’ core competencies, we must thoroughly understand this point of the market. Actually, this generation of the pharmaceutical industry began after World War II and since then has developed to the present with a high speed. In the ’50s and the ’60s, the ten year rate of growth surpassed 150%. In the ’70s, the speed reached 260%, and in the ’80s, because of sluggishness of the world economy, the yearly average fell to 8%. From the ’90s to the beginning of the 21st century, the average rate of growth for pharmaceutical companies has stayed between 7% – 10%. According to numbers from the National Bureau of Statistics, in 2010, international pharmaceutical market sales reached 760 billion USD, an enormous market.
According to analysis of Chinese pharmaceutical companies, this market has the following special qualities: 1) relatively decentralized management and low industry concentration. Even though the top-ranked businesses in the market have not yet broken through the top 5% of the top ten names in the market take up less than 40%. and the top ten pharmaceutical companies in China form less than 20% of the market. This means that the domestic Chinese pharmaceutical market is still in a very competitive period. 2) the cost of research investment is relatively low. Looking at the past thirty years of development, the enormous profits in the pharmaceutical industry come from having monopoly over new drugs – some international pharmaceutical giants often have have 1-2 leading products that maintain their company profits. But capital investment needed to fund the research of new drugs is astronomical and according to statistics, the average cost of of R&D for new drugs is $5-10 billion, and on the Chinese side, the cost of generic drugs is also $100,000. Foreign investment in drug R&D is generally 8 – 20% of sales, while the average investment for SMEs is less than 1% of sales. The lower R&D investment pressures pharmaceutical SMEs in both the international and domestic markets, making survival hard. 3) The structure of production is imbalanced. Most importantly, this shows that intra-production is uncoordinated: that chemistry development is fast but the development of medical equipment, pharmaceutical equipment, and medical packaging all remain slow. Also, within the pharmaceutical industry, raw materials for drugs are developed quickly while the preparation for production is slow and most ??? [materials?] doe not meet GMP standards, so it is hard to enter the international market. 4) Company information management systems are not well established. Pharmaceutical company development involves others in the pharmaceutical chain, such as logistics and e-commerce platform design. However, presently the information management systems of SMEs are in the very beginning stages, which severely impacts the effectiveness of companies’ development.
Even with a large investment for development in pharmaceutical companies, implementation has strict requirements. SMEs face strong competitors and their share of the market is small. But Chinese pharmaceutical SMEs can still form their own distinctive “core competencies,” and they can learn from several strategies: 1) Focus on core business and optimize supply chain management. Because SME liquidity is small, they do not have the advantage of scale and once they have failed to expand they face being bought by another company or going bankrupt. For this reason, these types of enterprises should be based on supply chain and supplying raw materials – production plants and warehouses – and provide downstream outsourcing services to non-core businesses that are capable, while their own focus can be on the flow of information, logistics, and follow-up services, thus “encouraging the article.” In this way, the advantages of the work unit form the overall core competitiveness of the SME. 2) Maintain the flexibility of enterprise development and build good, strategic alliances. Compared with large enterprises, SMEs are small and have a good deal of autonomy in decision-making, and the cost of internal coordination is quite low. This flexible autonomy makes the development period design of such enterprises very different, and different production management organization must use the most innovative way to manage the market. Meanwhile, SMEs should form internal alliances with complementary companies modestly acquiring specialty companies, forming strategic alliances, using mutual resources and technology, and participating in market competition. 3) Establish communication channels with large enterprises at home and abroad. Tracking global patent protection periods for medicine, SMEs can then come up with a structure to implement its own follow up earlier. In this way, SMEs can apply early for qualifications to compete with generic drugs in the international market and obtain their own market exclusivity.
Presently, the Chinese pharmaceutical industry is in a tough period of adjusting its production, but this is also an opportunity. By finding their comparative advantages, practical strategies for flexible planning, and continuing to look for a way to integrate resources, in this “window period,” China’s pharmaceutical SMEs can quickly embark on the road of healthy development, forming national brands and participating in international market competition.

Writer: Liu Han Bin, Hopkins Nanjing Center Certificate ’13


作者:刘瀚斌
2014年05月02号

中国医药类中小企业的核心竞争力探析

自2001年中国加入WTO后,为了适应经济全球化的趋势,中国政府修改和制定了许多符合世贸组织规则的法律。其中在医药行业,中国逐渐降低进口药品关税、开放医药分销市场。另外国内丰富的人力资源、低廉的研发成本等因素吸引了众多制药企业来华投资,其中不乏像“辉瑞”、“葛兰素史克”、“罗氏医药”这样的国际大鲟。面对这个高风险高利润的市场,中小企业要在国际国内众多企业的“夹缝”中生存和发展,必须认清自身有哪些因素可以形成核心竞争力,产生比较优势,产生自己的品牌影响力。
所谓“核心竞争力”,是指一个组织内的积累性资源,它包括原创的生产技术和物流流程,以及协调不同生产技能和有机整合不同资源的能力,它是企业独具,难以复制,支撑企业可持续性竞争优势的核心能力。一旦企业形成这种可维持其长期发展的能力,它将在整个市场链条上不可替代。为了更好的培育医药企业,特别是中小类企业的核心竞争力,就必须深刻了解该行业的特点。事实上,现代医药工业起步于二战之后,自发展以来就一直保持高速增长。在上世纪50-60年代,十年年均增长率超过150%;到了70年代,增速达到极点至260%;80年代由于全球经济衰退影响,年均增长率降至8%;从90年代至21世纪初,医药行业的年均增长一直保持在7%—10%左右。根据国家统计局的数字显示,2010年国际药品市场的销售额达到7600亿美元,可谓市场体量巨大。
根据对中国药企的分析,该行业存在以下几个特点:1.相对分散经营,产业集中度较低。即使世界排名第一的企业市场占有率也未突破5%,前十名的市场总占有率不足40%。而在中国十家最大的医药企业市场总和也不足20%。这表明国内的医药行业市场仍然处在一个激烈竞争的时期。2.研发投入较低。从过去30年的发展来看,医药市场的巨大盈利往往来自于某一种新药的垄断,国际上一些医药巨头,往往都拥有1-2个主导产品支撑其企业的盈利。但是研发新药的资金投入却是天文数字,据统计,发达国家每个新药的平均研发成本约为5-10亿美元,中国仿制药的费用也在100万。国外新药研发投入一般为销售额的8%——20%,而中小企业的投入平均不到销售额的1%,较低的研发投入使得医药类中小企业在国际国内双重压力下生存。3.产业结构不平衡。这主要表现在产业间发展不协调,化学制药发展迅速,而医疗器械,制药器械,医用包装材料行业发展缓慢;另外,在制药工业内部,原料药发展很快,制剂生产较慢,其大多数不符合GMP标准,很难进入国际市场。4.企业信息化管理系统不健全。医药企业的发展涉及其他诸如医药连锁,物流配送和电子商务平台的设计。可当前中小企业这些信息化的管理基本处于极为初级的阶段,严重影响企业的高效发展。
虽然医药企业的发展投入大,实施要求严。中小企业面临的竞争对手强,市场份额小。但中国医药类中小企业完全可以形成自己富有特色的“核心竞争力”。以下的几种策略可以借鉴:1.专注核心业务,优化供应链管理。由于中小企业流动资金少,不具有规模优势,一旦扩张失败即面临被收购或破产的危险。因此,这类企业应该以供应链为基础,从原材料供应——生产工厂和仓库——下游客户入手,将非核心的业务外包给其他有能力的企业完成,而自身在信息流,物流,后续服务方面“做足文章”。从而使各协作单位的优势资源形成整体的核心竞争力。2.保持企业发展的弹性,善于建立战略联盟。与大型企业相比,中小企业规模小,决策自主权大,内部协调成本低。这些灵活的自主权使得这类企业可以在不同发展时期设计不同的生产管理的组织方式,以最符合市场的方式管理创新。同时,中小企业应该在内部与优势互补的企业形成联盟,适度的收购一些有专长的企业,形成战略联盟,利用相互各自的资源与技能,参与市场竞争。3.与国内外大型企业建立信息沟通渠道。跟踪全球专利药的保护期限,结合自身实力提前进行仿制跟进。向国际大企业争取非专利药的第一申请人资格,从而获得市场独占权。
当前,中国的医药行业处于痛苦的产业调整阶段,但是这个时期对中小企业既是挑战,更是机遇。通过找到自己的比较优势,进行灵活切实的战略规划,不断寻找和整合社会资源,中国的中小药企,在行业调整的“窗口期”完全可以迅速走上良性发展的道路,形成民族品牌,参与国际市场的竞争。

作者:刘瀚斌,届证书班 2013

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