Genicon has historically thrived on the strategy of their integration distribution strategy because the US market was fickle and currently 80% of the market is outside US and international market for the MIS device is supposed to grow at a faster rate than US market. The Pacific Rim market is growing by 14% and it was difficult to gain market share in the US from the current state. The cost associated with entering the market is $50000 upfront and $20000 additional cost for distributor assessment and market sampling and channel contracting. In the past, the annual budget was about $225,000 for marketing and business development. The strategy of tying up with local distributor was helpful for Genicon’s expansion in Europe.
Ease of Doing Business:
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Russia also abolished the requirement for companies to notify the tax authorities of the opening of bank accounts.
Opportunities:
• Significant adoption in personal and corporate income tax rates.
• Ongoing modernization of health care system.
• Government reforms in health care expenditures and health care improvements.
• Total health care spending forecasted to reach $97.4 B by 2013(3.8% of GDP).
• The Russian medical device sector was $1.98B with high long term potential because of expanding economy and improved health care investments.
• In the current situation the imports are about 75%. The market by 2013 would $2.88B growing at a rate of 7.74%.
• Russian health care is huge with about 1000 hospitals and health care expenditures were about $39.4 B which was forecasted to fall slightly but not too much.
• The Russian middle class was growing with number of private clinic and hospitals increasing.
• Geographic distance where Russia is closest compared to others (Brazil, China, India).
• Cut or simplified post registration procedures (tax registration, social security registration,