Adapted Value Chain Analysis for Market Assessment of Emerging Life Science Markets.: A CASE STUDY OF A SWEDISH BIOTECH FIRM’S PROSCPECTS ON THE RUSSIAN MARKET
Independent thesis Basic level (degree of Bachelor), 10 credits / 15 HE creditsStudent thesis
Over the last decade, the life science industry has been facing shrinking revenues accompanied by increasing R&D costs, which resulted in an industry wide crisis acting as a catalyst for a change of the business model in the entire field of life science business. Emerging life science markets of the developing countries are growing rapidly and Western companies in this knowledge intensive industry have to expand in order to capture the scarce revenues. However, this process is not straightforward – the demand, risks and opportunities must be accurately evaluated in a time and resource efficient manner.According to Porter’s value chain concept, industries can be viewed as a set of multiple value chains – value system – where each firm is a value-adding link. Understanding the value chains of the specific industry, on a specific geographical market, allows identification of marketing opportunities for a certain type of products or services. Industrial value systems found on mature markets display diversified landscape of value adding activities with few gaps – there is a nearly full production cycle on the scale of the whole market. However, as our work indicates, the value chains in emerging markets display many gaps due to the immaturity of the industrial landscape. We suggest that by identifying such structural gaps by mapping the entire industrial landscape within a certain country of interest – the value system of the country-specific life science industry – any Western life science company, looking for a new market, can efficiently evaluate its marketing opportunities in a country with an emerging life science industry.The theory of value chain system analysis is one of the most established business management theories since 1985. However, applying it to the advanced field of the life science industry for the purpose of market assessment represents an innovative analytical approach – to our best knowledge this has not been performed with respect to the industry of life science. Our goal has been to show that the general theory of value chain analysis can be adapted and operationalized into a practically useful market research methodology, turning it into a useful tool in the toolbox of business intelligence within the life science industry.A case company, Swedish biotechnology company Medicago AB, is used to test our suggested methodology and further illustrate the usefulness of it. The study focuses on Russia as an emerging life science market. By describing and analyzing how the Russian life science industry is structured, conclusions regarding the business attractiveness of the Russian life science market are drawn. By fitting Medicago’s product profile into the Russian life science market landscape probable prospects of a potential market entry are suggested.
Place, publisher, year, edition, pages
2014. , 71 p.
value chain system analysis; life science; emerging market; Russian pharmaceutical and biotech market; market assessment
IdentifiersURN: urn:nbn:se:uu:diva-230701OAI: oai:DiVA.org:uu-230701DiVA: diva2:741406
Subject / course
Bachelor Programme in Business and Economics