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KMID : 1235020090030010023
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Health Service Management Review
2009 Volume.3 No. 1 p.23 ~ p.29
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Study on Strategic Entry into China Market for Pharmaceutical Enterprise -Application of the Disruptive Innovation Theory-
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Park Yong-Jin
Jung Kee-Taig
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Abstract
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Importance of healthcare industry is getting growing in line with the increasing interests in quality of life and health along with aging trend of Korean society. South Korea``s pharmaceutical industry also has approached to the saturation point in domestic market, and now pharmaceutical enterprises in Korea are shifting their eyes toward abroad based on enhanced technology in its field. China market, for instance, is rapidly expanding as 300 million of present population in the middle class will double their pharmaceutical spending within three years and it will become the fifth largest market in the world within two years. Given the circumstances that generics account for most of the market at present, major export items into China shall have to be improved new generics by way of direct investment in China. For the analysis of this process, Christenson Clayton``s ``Disruptive Innovation Theory`` has been applied in our studies instead of traditional trade theory. Regarding plausible entry plans to China market based on disruptive innovation theory, two strategies can be suggested; one is an entry of OTC medicine into new market and the other is an entry into less developed new market in the regional area both in terms of disruptive innovation. Disruption of treatment place and supplier``s level can be accomplished simultaneously by advancing into OTC medicine market as control over manufactured medicines by the China government has been changed. Entry into less developed regional medicine market is to compete against non-consumption market as ``a shield of asymmetry motivation`` given the circumstances that foreign pharmaceutical firms are generally doing business in the urban areas.
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KEYWORD
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China market, Disruptive innovation, Pharmaceutical enterprise, Generics, Non-consumption market, A shield of asymmetry motivation
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