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MD International

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Isabelle Lautzenheiser

on 28 October 2012

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Transcript of MD International

MD International Summary ~ MD International has a deep understanding of the foreign markets

~ They work closely with the different parties

~ They provide training Question 1 Question 2 Heidi Miller, Karen Wolbert, Alexis Shover, Isabelle Lautzenheiser What would it take for MD International to start exporting to other regions such as Asia or Europe? Given this, would you advise Al Merritt to continue his regional focus going forward or to add other regions? Question 3 Update on MD International Types of information needed to determine the attractiveness of a foreign market and make a good decision:

Type of economy – free market or mixed/command economy?
Political environment – stable, democratic nation or unstable, autocratic government?
Economic growth rate – affects purchasing power of consumers
Value that the company can create in a foreign market - do competitors already exist in the foreign market?
Language – how can the company overcome language barriers?
Cultural – are there cultural factors that could affect doing business there?
Mode of entry – what mode of entry (i.e., licensing agreement, wholly-owned subsidiary, joint venture) would best meet the firm's goals? Question 3 cont. Where to get information and assistance:
Department of Commerce
Small Business Administration
State and city trade commissions
Ex-Im Bank

Al Merritt and MD International should consider expanding the business into other regions – why?
Considerable experience and success in exporting
Since MD International is an EMC, they have significant knowledge of exporting, but should hire consultants and/or utilize agencies listed above
Carefully choose an export strategy to minimize risk
•MD International was acquired by Welch Allyn in March 2009
•Welch Allyn is a leading global manufacturer of medical products and solutions
•Welch Allyn acquired MD International to increase its presence in Latin American markets for which modest growth is expected
•Al Merritt worked for Welch Allyn in the 1980s and started MD International with the support of Welch Allyn leadership
•Welch Allyn was the first line of products for which MD International became a distributor
•Welch Allyn headquarters are located in New York and the company has offices all over the world, including Latin America, Europe, South Africa, the Middle East, China, Japan, India and Australia References http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1494812/
http://www.welchallyn.com/pressroom/releases/2009/2009-03-17_wamd.htm
http://www.welchallyn.com/about/company/locations.htm Question 4 How does an intermediary such as MD international create value for the manufactures that use it to sell medical equipment in foreign markets? Why do they want to use MD International rather than export directly themselves. Founded in 1987 by Al Merritt
Exports Medical Equipment to Latin America and Caribbean
experience
falling trade barriers
expanded spending on healthcare
Largest intermediary exporting
products from 30 manufacturers
600 regional distributors
broad product portfolio gives advantage over individual manufacturers
Knowledge and Understanding
doctors, biomedical engineers, microbiologists, and marketing managers
beyond sales-training, service, and support
Government Assistance
ensure delivery of products
help finance exports
Difficulties
Latin American economies have been cyclical
2001, Crisis in Argentina, Brazil, and Mexico caused layoff to 1/3 staff and pay cuts to others
financial crisis in 2008 brought a new set of financial problems Why is using a third party like MD international a good strategy for business?

Can you think of any reasons using a third party would be a bad idea?

What mode of entry should MD International use to expand into other foreign markets? Questions How important has government assistance been to MD International? Do you think helping firms such as MD International represents good use of taxpayer money? Very important
helped to ensure that products could get to their destination country
helped MD International through financing by the Ex-Im Bank
Helps to facilitate the international trade by either guaranteeing receipt of payment by banks that lend to foreign companies or by directly lending to the foreign companies
Yes! It is a good use of taxpayer money
facilitates the exporting of goods--more jobs for U.S.
Gains money for U.S. from the interest earned Why did MD International focus on Latin America?
What are the benefits of this regional approach?
What are the potential drawbacks? Al Merritt already had experience in Latin America & the Caribbean Trade barriers in the country were falling, creating an opportunity for entrepreneurs The country was starting to spend money on health care Benefits More money and growth to the country Access to better health care Drawbacks Imports Financial crisis Unable to finance imports
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