Market entry in Chinese healthcare industry: An institutional perspective
Han, Li (2022)
2022
All rights reserved. This publication is copyrighted. You may download, display and print it for Your own personal use. Commercial use is prohibited.
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2022052612232
https://urn.fi/URN:NBN:fi:amk-2022052612232
Tiivistelmä
China, as the second largest global economy, is becoming increasingly important from the global perspective. This huge potential market has attracted many multinational enterprises to expand their territory, however breaking into the market can be challenging with limited business knowledge.
Company A is a leading company in serving science, providing solutions to customers in various fields, such as life sciences, analytical fields and healthcare departments. System X is one of company A’s innovation product lines, which aims to simplify the clinical laboratories’ workflow by providing an automated solution. Guided by the corporate’s strategic plan, system X is targeted to enter the Chinese clinical market, following its successful launch in Europe. This study uses institutional theory to explore the influencing factors for market entry in China and provide practical recommendations for system X’s expansion plan.
This study applies qualitative research approach and case study strategy. The data set consists of five semi-structured interviews with industrial experts and the data is analysed with thematic analysis. Additionally, data related to the Chinese healthcare industry is collected via secondary data collection based on official reports, documentations and publications.
The study identifies that both formal and informal institutions are critical to consider when enter Chinese healthcare market. Several formal institutions have been highlighted, such as the trend of domestic manufacturing protection, importance of regulatory compliance and isomorphic pressure in the healthcare industry. In terms of the informal factors, the importance of relationship-building has been discovered, which is personal and long-term orientated. The role of customers has been suggested as a “value co-creator” instead of a “service receiver” to contribute to establish the brand image and make a positive influence on other users. Lastly, digitalization has provided more flexibility and variety in terms of connection channels, however it is not possible to replace the in-person connection completely during internationalization process.
This study suggests that collaboration and partnership with local resources and organizations can help in minimizing the risks caused by the foreignness of system X during Chinese market entry. Meanwhile, management of company A needs to evaluate the effort in achieving product localization and maintaining global standardization to balance the market unique needs and investment.
Company A is a leading company in serving science, providing solutions to customers in various fields, such as life sciences, analytical fields and healthcare departments. System X is one of company A’s innovation product lines, which aims to simplify the clinical laboratories’ workflow by providing an automated solution. Guided by the corporate’s strategic plan, system X is targeted to enter the Chinese clinical market, following its successful launch in Europe. This study uses institutional theory to explore the influencing factors for market entry in China and provide practical recommendations for system X’s expansion plan.
This study applies qualitative research approach and case study strategy. The data set consists of five semi-structured interviews with industrial experts and the data is analysed with thematic analysis. Additionally, data related to the Chinese healthcare industry is collected via secondary data collection based on official reports, documentations and publications.
The study identifies that both formal and informal institutions are critical to consider when enter Chinese healthcare market. Several formal institutions have been highlighted, such as the trend of domestic manufacturing protection, importance of regulatory compliance and isomorphic pressure in the healthcare industry. In terms of the informal factors, the importance of relationship-building has been discovered, which is personal and long-term orientated. The role of customers has been suggested as a “value co-creator” instead of a “service receiver” to contribute to establish the brand image and make a positive influence on other users. Lastly, digitalization has provided more flexibility and variety in terms of connection channels, however it is not possible to replace the in-person connection completely during internationalization process.
This study suggests that collaboration and partnership with local resources and organizations can help in minimizing the risks caused by the foreignness of system X during Chinese market entry. Meanwhile, management of company A needs to evaluate the effort in achieving product localization and maintaining global standardization to balance the market unique needs and investment.