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Critical Analysis of the 1997 Asian Financial Crisis
Critical Analysis of the 1997 Asian Financial Crisis
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Introduction
The 1997-1998 Asian financial crisis is one of the worst global financial and economic contagions that raised controversial debates among economic and financial analysts. This Asian Financial Crisis begun at the onset of the third quarter of the 1997 calendar year and it happened to be the third regional currency crisis since 1990, with the 1992-1993 European and the 1994-1995 Latin American currency collapses being the first and second respectively (Reinhart, & Kenneth, & Rogoff, 2009, 78). Although these earlier currency and economic crises flashed strong warnings to the leading financial institutions (International Monetary Fund) and governments on the possibility future regional financial and economic contagion, such institutions and political authorities failed to read the signs. The East Asian regional currency and financial crisis was not foreshadowed until mid-1997 when the lights flashed warnings of a possibility of a regional financial crisis. Other than Thailand that was it serious current account deficits between 1995 and 1996, other East Asian economies looked safe from currency devaluation (Rose, & Mark, 2009, 56-7). Notably, the cautionary marks of the Thais economy indicated that the possible currency crisis was sustainable both in the long-run and medium term given that over 80% of the Thais current accounts drawn financial support from the private capital inflows accounts (Radelet, & Jeffrey, 1998, 96-7). Therefore, there was no cause of alarm to the East Asian economy at large, including the most vulnerable country – Thailand. The East Asian governments blamed the financial panic and contagion for the of the 1997 exchange rate collapses and strongly believed that the currency crisis had nothing to do with the bad economic and political policies of the East Asian states. This research paper explores the possible causes and effects of this Asian Crisis-5 that mainly affected Indonesia, Philippines, Thailand, Malaysia, and South Korea. The paper will further discuss the lessons learnt from this East Asian crisis.
Cause of the 1997-98 Asian Financial Crisis
A study by Sachs, & Wing (2000, 66) identified investment boom as the primary source of the Asian crisis. During the first half of 1990s, the East Asian economy posted impressive economic growth and development that was described as the Asian miracle that was characterized by a 6-9% annual economic expansion, unprecedented Gross Domestic Product growth, and export boom (Radelet, & Jeffrey, 1998, 56). A combination of relatively educated and cheap labour, massive capital inflow and direct foreign investments, and abolition of international exports and trade barriers in a number of East Asian countries contributed to the region becoming export powerhouses. This was measured by the 18%, 16%, 15%, 14%, and 12% export growth in Malaysia, Thailand, Singapore, Hong Kong, and South Korea respectively (Radelet, & Sachs, 1998, 112). The increased returns generated by the unprecedented export led growth and expansion in Asian fueled a massive investment boom particularly in residential and commercial property, infrastructure, and industrial assets. This led to a soaring in the prices and value of residential and commercial property in major Asian cities such as Bangkok and Hong Kong. Consequently, the region witnessed investment boom in the real estate and housing sectors with heavy financial institutional borrowings to fund the booming property and real estate investments. According to Kaminsky, Saul, and Carmen, (1998, 44), the South East Asian governments of also contributed to the investment boom by heavy investing in infrastructural projects and providing incentives to encourage private investments. The investment boom resulted into excess capacity in the housing and real estate sector, thus low returns than anticipated by the investors. This ballooned investment volume during the 1990s exceeded the demand capacity, thus a significant decline in the economic returns that further led to a rapid rate of default repayment of the loans.
The second factor behind the Asian financial crisis was the regional financial and economic liberalizations. These South East Asian countries encouraged financial liberalization that allowed for easy conversion of foreign currencies into local currencies purposely to stimulate direct investments and foreign trade (Lane, & Gian, 2008, 77). Capital account transactions and capital flows were least regulated, leading to unregulated capital inflows from international banks in the form of loans extended to local companies and banks. Such highly liberalization financial policies and regulations resulted into excess foreign debts owed by the private sector. According to Dornbusch (2001, 823), the Asian financial crisis was attributed to panic and withdrawal by the lenders. The collapse of Thailand’s currency caused panic among foreign lenders and investors, resulting into credit crunch and bankruptcies. A significant proportion of foreign investors withdrew their financial resources. As a result, the troubled domestic currencies flooded the foreign exchange and capital market, thus exerting depreciative pressure on the local exchange rates (Radelet, & Jeffrey, 1998, 67).
Effects of the Asian Financial Crisis
The 1997-98 Asian financial crisis adversely affected the South East Asian macro and micro-economics performance. In general, the region that at one point boasted of the fastest growing economy in the world suffered a major economic and financial setback with a sharp drop in the GDP from over 8% in 1996 to negative 1.4% GDP (see table 1), representing economic retrogression (Corsetti, Paolo, & Nouriel 1998, 22). Thailand was the worst hit country out of the five countries that were at the helm of the Asian crisis with its GDP posting 10.8% retrogression in 1998. The South East Asian economic contraction following the 1997-98 financial crisis majorly impacted on the economic capacity to create employment opportunities. The collapsing of the leading financial institution and the decline in private investments in South East Asia led to forced laid-off of employees. Therefore, the rate of unemployment in Thailand, Indonesia, Malaysia, Hong Kong, and Philippines sky rocketed to reach a record high of 6.4% in 1999 (Sachs, & Wing, 2000, 38). As a result, the purchasing power of the employees significantly dropped, further hurting economic growth prospects. Following retrenchments, increased underemployment, and loss of employment opportunities, poverty index in Indonesia went up to 24.2% in 1998 but slightly dropped to 23.5% in the following year (Eichengreen, 1999, 18-9). Socially, the decline in the real wages forced the consumers to cut their healthcare expenditure, thus deterioration in their social and health status. Besides, the crisis led to a significant drop in school enrolment as incidences of child labour rapidly increased in Thailand and Indonesia in order to supplement on their family income.
Lessons Learnt from the 1997 Asian Financial Crisis
Although the 1997 Asian crisis came to end, it raised a number of critical issues regarding the international financial and economic systems, with particular emphasis on the development of sound international financial architectural policies. As explained Mishkin (1999, 715), the Asian crisis served as a strong lesson that prevention of such crises in future calls for designing of sound and sustainable macroeconomic policies and frameworks to govern the operations of the financial institutions. In support for Mishkin (1999), Lane and Gian (2008, 330) argued that although desirable, excessive financial and economic liberalizations are hurtful to the economy, therefore some regulations are necessary. While drumming support for the role of financial liberalization, Moreno, Gloria and Eli, (1998, 81) explained that strengthened international surveillance that focuses on complying with the international monetary standards and incorporation of regional financial policies would be essential in sounding alarm about any upcoming financial problems. He further argued that financial institutions should advance modern risk management strategies, including improved financial regulation and supervision for both creditor and debtor countries. Had this been done, then the Asian financial crisis would have been prevented. More importantly, Moreno, Gloria and Eli, (1998, 81) asserted that transparency is very fundamental in crisis prevention. According to Kaminsky, Saul, and Carmen, 1998, 43-4) lack of transparency by the central banks in the region with respect to the region’s international reserve position further exacerbated the financial market panic among investors and creditor, thus leading to the massive withdrawals witnessed in South East Asian.
Conclusion
In conclusion, although the financial panic and economic withdraws played a role in the spread of the Asian financial crisis, the contagion was primary attributed to investment boom that led to excess economic capacity than the effective market demand. In addition, weaken financial policies and liberations majorly contributed to this regional problem that adversely impacted on the economic, social, and political conditions in the South East Asian countries. The weaknesses of the financial sectors reflected the inability and ineffectiveness of the lenders and creditors to effectively allocate credit with least moral hazards involved. Therefore, the South East Asian economy recovery process calls for reforming and strengthening the financial institutions and systems to avoid a repeat of the same in future.
Reference List
Corsetti, G., Paolo P., & Nouriel R. 1998. “ Fundamental Determinants of the Asian Crisis: A Preliminary Empirical Assessment.” Federal Reserve Bank of New York Working Paper, pp.23-5.
Dornbusch, R. 2001. “A Primer on Emerging Market Crises.” NBER Working Paper, 8326.
Eichengreen, B. 1999. Toward a New International Financial Architecture: A Practical Post-Asia Agenda. Washington, DC: Institute for International Economics, pp.18-20.
Kaminsky, G., Saul, L. & Carmen, R. 1998. “Leading Indicators of Currency Crises,” IMF Staff Papers. Vol. 45 (March).
Lane, R., & Gian, M. 2008. “The Drivers of Financial Globalization.” American Economic Review 98(2, May), pp. 327–332.
Marshall, D., 1998. “Understanding the Asian Crisis: Systemic Risk as Coordination Failure.” Economic Perspective Third Quarter: 13-28. Federal Reserve Bank of Chicago.
Mishkin, F. 1999. “Lessons from the Asian Crisis.” Journal of International Money and Finance, 18, pp. 709–723.
Moreno, R., Gloria P., & Eli, R. 1998. “Asia’s Financial Crisis: Lessons and Policy Responses.” In Asia: Responding to Crisis. Tokyo, Asian Development Bank Institute, pp.78-85.
Radelet, S., & J. Sachs, 1998. The Onset of the East Asian Financial Crisis. NBER Working Series No. 6680, National Bureau of Economic Research, Massachusetts, pp.112-4.
Radelet, S., & Jeffrey, S. 1998. “The East Asian Financial Crisis: Diagnosis, Remedies, Prospects,” Brookings Papers on Economic Activity, Vol. 1, 56.
Reinhart, M., & Kenneth, & Rogoff, G. 2009. This Time Is Different: Eight Centuries of Financial Folly. Princeton, NJ: Princeton University Press, pp.65-7.
Rogoff, K. 1999. “International Institutions for Reducing Global Financial Instability.” Journal of Economic Perspectives 13(4), pp. 21–32. http://www.jstor.org/stable/2647011.
Rose, K., & Mark, M. S. 2009. “Predicting Crises, Part II: Did Anything Matter (to Everybody)?” FRBSF Economic Letter 2009-30 (September 28). http://www.frbsf.org/publications/economics/letter/2009/el2009-30.html
Sachs, J., & Wing, T. W. 2000. “Understanding the Asian Financial Crisis,” in Wing Thye Woo, Jeffrey Sachs and Klaus Schwab (ed.), The Asian Financial Crisis: Lessons for a Resilient Asia, MIT Press.
Appendix
Table 1 – GDP Growth 1994-1997 (%)
Country 1994 1995 1996 1997
South Korea 8.6 8.9 7.1 5.5
Indonesia 15.6 8.2 8.0 4.7
Malaysia 9.2 9.5 8.6 7.8
Philippines 4.4 4.8 5.8 9.7
Singapore 10.1 8.8 7.3 7.6
Thailand 8.9 8.8 5.5 -0.4
Hong Kong 5.5 3.9 5.0 5.3
China 12.7 10.6 9.5 8.8
Taiwan 6.5 6.0 5.7 6.8
Source: International Financial Statistics of the International Monetary Fund, Dec. 1997.
Critical analysis of parents with their children and the broad theory of parenting in Titus Andronicus
Titus endogenous
Critical analysis of parents with their children and the broad theory of parenting in Titus Andronicus. The major cases under consideration are Tamora, Titus and Aaron. The general and broad theory of parenting has been analyzed using these three principal cases as the benchmarks.
Thesis
Titus Andronicus play is a revenge tragedy, which is fascinating and reveals human personality and character.
Introduction
Titus Andronicus play presents characters whose interactions make the play interesting and worrying. The characters treat their families differently and uniquely depending of the circumstances at hand. Shake spares’ Titus Andronicus play is a revenge tragedy, which is fascinating and reveals human personality and character. The brilliant selection of the characters of the play, whose diverse personalities interact with a brutal and unforgiving setup, draws the audience into the personality-disoriented world. The author clearly portrays the functional and dysfunctional differences in the characters of the play (Shakespeare, William.1999, 371). The characters evoke sympathy from the audience in almost every act of this play however; they maintain the brutality and revenge towards one another on family lines, which comes into a terrifying climax that leaves a few of the characters alive. The way Shakespeare slays his characters in this tragedy play is elaborate and worrying that leaves one to wonder whether the characters had any meaning in the playwright. This thesis is about how different characters interact with their children in the play and how their interactions compare with the broader theory of parenting (Brower, 1979, 26-28). Focus will be on major characters of the play such as Tamora, Titus and Aaron.
How does Tamora treat her sons? Concentrate especially on her plea in Act 1 scene one, and her interaction with her sons in Act 2, scene three
Tamora is a loving mother and likes her sons so much. When Titus demanded the sacrifice of Tamora’s son, Tamora pleads for the son’s rescue but all in vain. She cried for his son passionately but Titus remained stubborn until he offered Tamora’s son as a ransom to appease the spirits of his death sons. From the play, Tamora pleads “victorious Titus rue the tears I shed, a mothers tears in passion for his son” the pleading shows how the mother loved his son and how she treated him with respect. She does not want his son to be slaughtered in the streets and that is the reason she asks rhetorically “but, must my son be slaughtered in the streets,…” in act two scene three, Tamora is very bitter when he remembers the way Titus scarified his son despite her pleas. She encourages his sons to avenge the sacrifice of their brother by raping the daughter of Titus. She calls his sons sweet revealing that he loved them so much and relied on them to avenge for her. She encourages the sons to commit crime by raping Titus daughter regardless of the consequences of the crime. She is a mother who could take risks and going as far as risking the death of his other sons by asking them to revenge by committing crime. She commends them by saying “so should I rob my sweet sons of their fee: no let them satisfy their lust on thee”. As the play unfolds, Chilon and Demetrius rape Lavina and amputees, her limps and tongue. Tamora treats his sons with an elevated respect and she instigates the feeling of animosity to Lavina when she lies to her sons. She portrays an antisocial behavior when she closes her ears to the peas of Lavina before the rape and mutilation tragedy occurs. She threatens her sons with the loss of love if they do not go ahead to rape Lavina. Tamora portrays antisocial personality disorder by holding parental love for ransom. She manages to convince his sons to carry out such a heinous deed of raping and mutilating Lavina as revenge for the slaughter of her son. This is an exhibition of extreme ruthlessness, and unrestrained lusciousness’.
How does Titus treat his offspring?
The story of Titus Andronicus when he returns from a worrier from war is dramatic in the way he reacts to situations. The return of Titus with the corpse of his son who he had lost in war is a clear indication that he was passionate father who loved his offspring and could not leave the body of his son rot in the fields of war. After the sounds of the trumpets and drums before the burial of Titus son, he gives a speech and laments for loosing may of his sons in war. Titus loves his son Lucius very much until he offers to fulfill his demand of a human sacrifice as a way of mourning the loss of his brother. Timor’s son is chosen by Titus to be sacrificed to appease the spirits Titus’s death offspring. He sticks to religion and tradition and refuses to listen to Tamora’s pleas of his first-born son, finally slaughters Alarbus Tamora’s son in cold blood as a ransom for the death of his sons and fellow citizens.
Titus wants his children to be like him that is why he goes an extra mile to make very dangerous moves for the sake of his offspring. He dares and kills Tamora’s son an act that leads to bitter rivalry between the two families. Tamora and her remaining two sons swear to avenge the death of Alarbus, which they finally accomplish by raping and mutilating Lavina Titus daughter. Titus is un-understandable; he lamented the death of his sons during the war and even sacrificed human blood to appease their spirits but turns out to be ironical when he stabs his son to death. He reacts brutally to his son killing him and still pursues his daughter Lavina to return her back to the emperor. He reacts unjustly and remorselessly to his son Mutius whom he stubs to death. Titus portrays this merciless and inhuman behavior even though he was fighting to get access to his daughter whom Mutius was denying him asses to before he is stubbed to death.Titus manages to bring her daughter to the emperor together with his lover. Tamora pretends to plead mercy for Titus against punishment for kidnapping Lavina. Tamora was only cheating on Titus when indeed in the heart she had great wrath of revenging all the Titus had done to her. When an opportune moment arrives, the sons of Tamora gets hold of Lavina whom they lusted for, they raped her, and mutilated her so that she could not be able to tell Titus who tortured her. When news went all over about Lavinas issue, they plotted that, the sons of titus are the ones who raped and mutilated Lavina. Titus offers himself to be cut a hand so that his sons are pardoned from slaughter sentence. It is an expression of true father love to his family and offspring. Titus decided to kill her daughter whom he loved very much to rescue her from her misery. He did this act out of love and did not want to continue seeing her beloved daughter suffer the consequences of rape and mutilation. Titus swears to revenge for the brutal actions committed to his family, which he finally fulfils by preparing the pie, and uses it to kill Tamora
Aaron
Aaron is a protagonist in the story, his actions and behaviors reveal him as a loving husband to his lover and his kids he celibates Tamora’s tile and knows that the success of Tamora is his as well. Aaron is in full support of the revenge mission against Titus over the slaughter of Tamora’s son. He is the one who proposes that Chiron and Demetrius rape and mutilate Lavina. Aaron impregnated Tamora the emperor’s queen and at birth Tamora gives birth to a black baby, whom the nurse asks Aaron to kill but he refuses. The refusal to kill his own baby shows how Aaron is a responsible farther, he even plans on how he will take this baby to the Goths for protection. Aaron is again found protecting his kid when they are captured by a Goth and sentenced to hang. He tells Lucius that he will confess everything if his child was spared. When his plea is heard, he confesses how Chiron and Demetrius raped and mutilated Lavina. He boldly unfolds the hidden stories and brags about his evil part in them. Aaron is very defiant and brave in defending his family even when situations are unfriendly.
What do these comparisons say about a broader theory of parenting that might be present in Titus Andronicus?
The shake spares Titus Andronicus comparisons of how different parents treat their children say a lot about the parenting theory. For instance, right away from the beginning of the story Titus is seemed to treat his sons with respect and love. When he returns to the emperor, he laments the death of his sons and desires that they remain to be like him a true warrior. However, as the play unfolds, Titus stubs his son ruthlessly to death. One wonders which parent can do such a horrible thing and not worry or feel sorry. His parental love is questionable. To make matters worse he kills his daughter Lavina only to comfort himself that he killed her to rescue him from her misery of rape and mutilation. Which parent with true paternal love can kill his children as easily as Titus does? He is a cruel, unforgiving, harsh parent (Swick, Johnson, 2011,p.g56-98).
On the other hand, Tamora expresses true love for his children, he loves his sons and this is the reason why he pleads for his sons sacrifice decree. The reveals maternal love to his sons only, her love and care are questionable when he gives a deaf ear to the pleas of Lavina over rape and mutilation from his sons. As a mother and feminist, she should not have left Lavina to be raped and mutilated. In addition, her morals are questioned given that she loved Aaron and yet she is married to the emperor, when she gives birth to a back child, she abandons the child and requests that Aaron kills the infant. According to Greenblatt, Stephen et. al., eds. (1999),This clearly shows a picture of antisocial, racist and discriminative mother who is careless on matters of live and its dignity(p.g 47-90).
Aaron is a supper man, despite the whole community declaring the birth of the black baby an abomination to the emperor; he stands firm and protect his child. When the nurse and the sons of Tamora asks him to kill the child he refuses and makes planed to take the child to goal to be protected. When him and the kid are captured and returned to the emperor and a death sentence is declared upon then, he still goes ahead to plead for the kid. He promises to confess all if his child is spared. When his plea is granted he confesses the hidden part f the story boldly and courageously knowing that even if he dies the child will be save. This is a true parental spirit and fatherly love.
Works cited
Brower, Reuben A. “Titus Andronicus: Villainy and Tragedy.” In Shakespeare: TheTragedies, edited by Robert B. Heilman, 28-36. Englewood, 1979.
Greenblatt, Stephen ET. al., Eds. The Norton Shakespeare Based on the Oxford Edition. New
York: Norton, 371, 1997.
Shakespeare, William. Titus Andronicus. The Norton Shakespeare. Ed. Greenblatt, Stephen. New York, NY: Norton, 371 – 434, 1997.
Shakespeare, William. The Norton Shakespeare. 1. New York: W.W. Norton & Company, 1997.
Swick, Johnson: “Cultural influences on parenting: Implications for parent educators”. Journal of Instructional Psychology, 12(2), 80-85, 2011.
Critical Analysis Of Medical Device Markets In Germany And Canada
Critical Analysis Of Medical Device Markets In Germany And Canada
Table of contents
Introduction
About the business
About the product
Literature review
Canada
Background information
Marketing strategy and structure
Marketing plan
Successes
Failures
PulseMedTech take
Germany
Background information
Marketing strategy and structure
Marketing plan
Successes
Failures
PulseMedTech take
Results and Discussion
Summary and Recommendations
Introduction
About the business
Medical devices are gaining importance in health care industry. An issue of great importance among medical devices manufacturing firms is exposure and implementation of regulatory requirements. This is the reason why medical devices manufactures have gained a lot of market for their products in the recent past. However like all other commodities medial devices are expected to experience growth slowdown due to recession, exchange rate fluctuation and differences in regulations governing their usage in various countries.
PulseMedTech is a medical device manufacturing company that is based in UK. The company specializes in manufacturing class II medical devices. Due to the stringent regulation challenges in the UK PulseMedTech has been unable to launch their products in the UK and instead opted to market their brand elsewhere in Germany and Canada. The major reasoning behind this is the liberalization of medical equipments market and ageing populations that require more medical attention in these countries. Besides this, it is also an undisputed fact that 3 out of 5 of the largest medical device markets globally are in Europe; Germany, Britain and France.
About the product
In general terms medical device is an apparatus, article, instrument or equipment which can be applied alone and or combined with others (even software) on human beings for medicinal purposes. It can be intended to cure, monitor, diagnose, prevent, treat, monitor or alleviate a disease, suffering, or an injury. A medical device can also be used to control conception. It is vital to note that a medical device doesn’t achieve its major intended action on or in the human body through immunological, metabolic, or pharmacological means, but it can be aided in its function through such means. Examples of medical devices include x-ray machines, band aids, hip implants, lenses, crutches, beds and in vitro diagnostic devices. Each and every country has its own way of classifying their medical equipments. The USA for example classifies their medical devices as class I, II, and III. Here class I is for general controls, class II is for special controls whereas class III is for pre-market approval. In this case class I devices are the less risky whereas class III is the most risky. On the other hand most countries in Europe classify their medical devises as class I, class I sterile, class I measuring, class IIa, class IIb or class III where class III devices are considered to be the most risky.
Literature review
Canada
Background information
Canada is a very promising country for us to market our products for various reasons that would be outlined shortly. To start with Canada is a neighbour to the USA who is the major market for medical devices. Secondly Canada is a wealth and technologically advanced country with about 400 medical equipments manufacturers. The manufacturing plants are mostly located in Ontario, British Columbia and Quebec. In addition Canada has being ranked in position 1 out of the G7 countries as a good market for medical devises. This is a clear indication that we are entering a very ripe market which needs to be studied and then exploited fully. Canada is a bona fide member of (NAFTA) i.e. North American Free Trade Agreement. It has also signed a Mutual Recognition Agreements (MRA) for medical devices with other nations like: Norway, Switzerland, Iceland, Liechtenstein and EU (invest in Canada, 2007) website.
Regulation of medical devises in Canada
The body that is manifested with the responsibility of regulating medical devises in Canada is Health Canada. It has two major divisions i.e. Therapeutic Products Directorate and Health Products. The authority which gives it power is the Food and Drugs Act. The medical devices in this country are subjected to the Medical Devices Regulations which is under the Food and Drugs Act. The Regulations clearly spell out the requirements governing the importation, sale and marketing of these devices in Canada (Health Canada, 2007).
Classification of medical devises in Canada
The classification of medical devises in Canada is more or less the same with that of the neighbouring country USA. The classification has been harmonized with that of EU. The classification divides these medical devices into class I, II, III and IV. Class IV devices represent the highest risk while class I devices the lowest risk. This classification that is risk-based is harmonized to classification systems of the EU and USA. This is basically to say class I, II, III and IV corresponds to the European class of I, IIa, IIb and III.
Product registration in Canada
To register a medical device in Canada, it must be classified as either class I, II, III or IV product. The quality management systems have to be applied to all the products except those belonging to class I devices. Canada has also adopted ISO 13485:2003 as its national standards
by labeling it CAN/CSA-ISO 13485:2003. For class II medical devices the quality system has to satisfy these requirements i.e. CAN/CSA-ISO 13485:2003. This however excludes the design. For those medical devices in class III and IV; the quality system is ensures that they satisfy the necessary requirements for CAN/CSA-ISO 13485:2003. This one includes design. Moreover the manufacturer is supposed to identify the perils that are inherent in the product. In the product License Application of class IV medical devices, there should be assessment of potential risks. The authorities recommend that it should work in accordance to ISO 14971 standards (MDB, 2003).
Importers and distributors of medical devices have to obtain a license allowing them to establish their business in Canada. However if you are importing or distributing custom made and special access devices, you are exempted from this regulation. Establishment license is also required for class I products. For you to advertise or sell a class II, III or IV medical devise in Canada, you only need a device licensing. Establishment license is not necessary, even though importers and distributors do. PulseMedTech will also require a declaration of conformity to standards to advertise or sell in Canada. Class III and IV Custom-made products requires authorization from the Ministry of Health before importation into Canada (MDB, 2003).
According to the New Medical Devices License, the following lists all the information that PulseMedTech will be required to avail in order to be given a license for their class II Medical Device in Canada:
Device name
Device classification
Device application history
Name and Address of PulseMedTech as it appears on the product label
Physical address for Regulatory Correspondence
License Application Type
Device Preferred Name Code (Optional)
Device Usage Category
If the device contains a drug
Purpose of the device
Device details
List of Standards Complied with in the Manufacture of the Device
Attestation of Safety and Effectiveness
Attestation of labeling
Signature
Further information on each section mentioned above and also what differs between various classes can be obtained from “Guidance on How to Complete the Application for a New Medical Device License” website (2003). Additional details can be obtained from the Regulations, Part I, sec 32. The products shall contain proper directions as far as storage, conditions of administration and usage is concerned. The above information shall (at the minimum) be in English or French. The Mandatory Problem Reporting part of the Regulations spells out the rules as to what kind of incidents needs to be reported, content of the reports and time frames for reporting. These rules have been harmonized with the European Union vigilance reporting needs.
Marketing strategy and structure
As far as market structure of class II medical devices in Canada is concerned, it can be said to be monopolistic. This is to say that there are many other firms in the market offering the same type of goods like PulseMedTech (Case et al, 1999). Therefore we expect to operate in a highly competitive environment. As already pointed out there are about 400 registered medical devices manufactures in Canada! These calls for a proper marketing strategy form our marketing team. Without it we may not be able to capture a sizeable market in this particular country. Even if there are lengthy procedures to entry in this market, it does not in any way exclude potential of other new players entering the market. This combined with the many firms already in the market makes matters even worse. PulseMedTech will have to work extra hard to seek ways of capturing a sizeable market and then concentrate in serving it well to put off any potential new entrants (Case et al, 1999).
Using Michael Porter’s generic marketing strategies (Porter, 2008) , the strategies employed by our competitors are: market segmentation, cost leadership and market differentiation. The current market strategy of our competitors is diversified owing to their large number. However majority use cost leadership and market segmentation. This has helped them acquire a reasonable market share based on these strategies. Cost leadership is a type of market strategy where a company positions itself as the most affordable in the market. This cost benefits arise from a number of factors mainly economies of scale, low quality product, exclusive undue advantage and etc. About 30% of the firms use this method to market their products. Further research has shown that this companies target markets in Africa and Asia where need for affordability is the overriding criteria. Otherwise Canada is a wealthy country where issues of cost does not matter that much (Porter, 2008).
A further 35% of the medical device manufactures in Canada were found to be using market segmentation as their preferred mode of marketing strategy. Segmentation is a marketing strategy method that classifies market according to their income levels. They targeted the wealthy class and the mid level households who constitute majority of citizens in Canada. Others also target markets outside Canada where demand is high e.g. USA. The remaining firms either used product differentiation alone or in combination with the other methods. This is equally effective depending on desired results of a particular firm (Baker & Michael, 2008).
Marketing plan
Marketing plan is a general term referring to all those actions a business concern undertakes in order to market its products. It is wide and varied the choice of one or more methods are determined by a number of things. This includes regulations, competition level, type of product, available funds and etc (Baker & Michael, 2008).
Market plan being used by our competitors are numerous hence it will be difficult to highlight down here on what exactly they use. That may require a special study by our marketing department.
Successes
Generally speaking the success rate of medical equipment manufacturers in Canada has been good. Provided that you identify a particular market niche and focus on serving it satisfactory and efficiently, you are bound to succeed. Being a sensitive product, strict adherence to regulations is paramount otherwise you risk being deregistered. Successful companies in the medical device industry have made a fortune for themselves and are some of the most talked after corporations in the stock exchange markets. PulseMedTech can be a success story if they use the right approach to market their product (Invest in Canada, 2007).
Failures
Going by the recent statistics in Canada, medical devices sector is one of the fastest growing in the Canada economy. This is due to the fact that Canada is a wealthy country, population is ageing, and economy is good. In addition proximity to world major consumer – the USA has also immensely contributed to this success. It is not surprising therefore that in the last 5 years very few medical device manufacture have failed. This notwithstanding however, a few corporations have closed due to various reasons. They include; stiff competition, inability to comply with the safety requirements and failure incidences of their products. This led some of them to close shop totally, merge or face penalties from the regulating authorities. PulseMedTech can only be a failure story if it does not comply with the regulating authorities requirements. Otherwise on business ground, it is very promising (Invest in Canada, 2007).
PulseMedTech take
All this background studies, investigation and case studies into the medical device market in Canada are very encouraging. The market is very ripe and ready for our products. All we need is to develop working policies, strategies and compliance tests that will favour us in this great country. They should help us not only to capture but also retain a considerable market in the mid term and long term.
Market strategy
As far as market strategy is concerned, PulseMedTech should plan to enter the Canadian market using two major strategies, namely market segmentation and differentiation (Nagle, Thomas & Holden, 2002). Under product differentiation, PulseMedTech should position its brands as durable, functional and efficient. They should be seen as unique from those made by rival firms. This is vital for a wealthy country like Canada which has advanced technology. With regards to market segmentation, we plan to market our products to mid level and high end consumers. Even though there are many firms using this method it has proved to work nevertheless. This also means quality, efficiency, and safety should be the overriding criteria in manufacturing our products. If we err in this point, we may as well forget the Canadian market.
Market plan
In order for us to develop a good marketing plan for PulseMedTech we will need to do a step by step analysis of a number of issues. This are the issues we feel will directly impact on our business. After fully understanding our business environment, it will be easer for us to develop a working plan (Nagle, Thomas & Holden, 2002).
Marketing environment
In order for us to fully understand the business environment in Canada, we will need to conduct a thorough market analysis using the PESTEL methodology.
PESTEL Analysis
PESTEL analysis is a business strategic planning tool that is employed to perform a thorough business macro environment analysis to determine the best decision to be made in any given instance so as to survive. It is a very useful business tool because businesses operate in constantly changing environment. In his review Philip Kotler, a Harvard professor, said that PESTEL is a vital strategic tool for measuring business potential, direction, growth or decline and current position (Kotler, 1998). Using this method the possibility of PulseMedTech to establish a market in Canada can be analyzed in the following manner.
Political: This has to do with politics of the day prevailing in a country. It is generally assumed that if political temperatures are down; businesses tend to flourish and the vice versa is also correct. In this particular acquisition it can be said that it is neutral and thus not expected to cause much rubble in our operations. However future political challenges can not be ruled out. For instance the term of current parliament is almost expiring and nobody is sure of what the future politics of Canada will look like. Let’s hope that being a mature country democratically the transition will be peaceful (Kotler, 1998).
Economic: As already mentioned, the economic growth of Canada has not been very good in the recent past, but it is expected to pick up soon after the recession. This should not be a big challenge to our quest to enter this market. Unemployment levels, inflation, exchange rates and lending rates show promising trends. This may partly explain the reason why Canada is ranked best among the G7 countries as a good market for medical products. Besides these the stock market prices of medical devices manufacturer are doing quite well (Aharon, Gavious & Yosef, 2010). For this reason we may say that the decision to enter this market may not be a bad deal after all.
Social: These are those social trends that are perceived to affect the business either in a positive or negative manner. They include such factors as age structure, demographics, rural-urban migration, literacy levels and etc. In Canada majority of the population is ageing, this means that demand for specialized medical care will be high whereas services to children will be lower. PulseMedTech is expected to operate in a new territory therefore social factors may have great impact. As such we also need to do a good demographic study before mass importing our products to Canada. This is because not all class II medical devices are intended to be used by elderly people. Mass importing them without a plan will lead to unnecessary inventory costs (Kotler, 1998).
Technological: These are trends in new technology that keep on advancing on daily basis. Technology can create new products and services as well as phase out existing ones. For instance mobile telephone created new business for GSM carriers whereas it spelled doom for other business like the postal and courier services. PulseMedTech is expected to use both existing and new technology to grow its business portfolio. This is evidenced from the fact that its products are as a results of new ground breaking technology. This is just what a country like Canada needs. New technologies keep on advancing on daily basis hence we should be on toes so as not to lag behind. We should also use technology in our day to day operations so as to minimize costs and help us deliver swiftly and efficiently. If well adapted, technology can considerably reduce PulseMedTech’s operational costs and subsequently grow its profit margins (Porter, 2008).
Environmental: These include such factors as climate and weather changes in a period of time. Changes in environment are hard to determine or control and they have greater impact on businesses either directly or indirectly. For instance if there is a drought, farming will be affected directly and this will also have an impact on insurance and banking firms indirectly. This means citizen’s disposable incomes will be affected and subsequently their ability to buy our products will be affected. If recent statistics in global warming is anything to go by, then we are in for a rude shock! (DiMento, 2007). Sadly, there is little that management of PulseMedTech can do to change this scenario. Let’s just keep our fingers crossed and hope for the best.
Legal: Legal factors have to do with government regulations that come into play from time to time. Currently in Canada, rules that govern health industry can be said to be liberal and thus our firm is expected to reap from this. Nevertheless to mention there are changes in consumer protection, taxation of foreign corporations and employment laws which may have an impact on our operations. Again on this frontier PulseMedTech has little to play to control such legislations. Ours will be to ensure we comply with the safety, conformity and standardization regulations. This is our core mandate. We hope that these regulations will not have adverse effects on our operations; otherwise we may be forced to think twice. On this issue we may need to consult a legal expert on this before fully entering the market (Straub & Thomas, 2007).
Verdict
Under the PESTEL analysis, it can be said that marketing our product in Canada is a worthwhile venture. If we enter the market using the right approach we are bound to succeed. However it is important to remain cautious to any unforeseen circumstances that may arise in this endeavor.
In summary we are going to use the following market plan to market our products in Canada.
PulseMedTech take on market plan
Target market: In broad our market is in Canada as a country. Whilst in Canada we will be required to segment our market even more so as to serve our customers even better. According to the research we have conducted the following have been identified as the key market segments:
Hospitals (both public and private)
Schools and colleges
Military bases
NGOs establishments
Children, orphan and eldery homes
Pricing method: given the fact that Canada is a wealth country, we should think of using cost plus pricing strategy. This is taking all the total manufacturing costs add a desired profit margin and there you are. You have found a price to sell your products. This we hope will help us seize a considerable market share besides giving us a competitive advantage. Our goal will be to break even in the short run before starting to reap profits in the medium term and long run (Baker & Michael, 2008).
Marketing methods: Canada is a technologically advanced country, the population is ageing and it has one of the well developed mass media industry. Therefore we need to use an appropriate method that will not only reach as many clients as possible but also cost effectively. The following are the main marketing methods we suggest PulseMedTech to use.
the internet
the press
direct marketing
publicity
2.2 Germany
2.2.1 Background information
Germany is ranked the 3rd largest medical devices market behind USA and Japan. In 2011, the Germany medical devices market was esteemed to be about US$ 19.5 billion. Germany population was estimated to be about 20% of the 81.6 million total population of Western Europe in 2011. Healthcare expenditure is high and stands at over 11% of GDP. However, the government is increasingly constraining this expenditure. This program of reducing healthcare expenditure has made the local market to remain tight with continued downward pressure on prices. In recent years the government funding for hospitals has stagnated making the public sector hospitals to maintain the existing equipment instead of investing in new appliances. This has made domestic producers of the medical devices to be reliant on export market (invest in Germany, 2009).
Germany is generally known to be producing high quality medical equipment especially dental related products, diagnostic imaging and optical technologies. But, despite strong domestic manufacturing industry, imports, amounted to US$13.8 in 2009 and supplied about 70% of the medical market. Healthcare reform program which is being initiated by the first ever coalition government, is aimed at increasing healthcare expenditure, while increasing financial resources through higher health care insurance contributions. In January 2004 and July 2007 major health care reforms were introduced and were mainly aimed at increasing the competition between health insurance providers. This in turn gave rise to a stiff competitive environment for healthcare goods and services suppliers (invest in Germany, 2009).
Demographic data
Germany has a total geographical area of 356854 square kilometers with a population of about 82.3 million people. Of the 83.3 million people, 13.7% are children age between 0-14 years, 66.1% are youth and middle age ranging from 15-64 years, and 20.2 % are the aged 65 years and above. Health care expenditure per capita in 2007 was $3515. The number of hospitals in Germany was 1446 public and 637 private as per 2008 data. In Germany hospitals are financed in a dual system where the inpatient services are based on DRG system and out patient free-for- service program.
Medical devices industry
The Germany medical device market is one of the biggest in Europe. In 2008 alone, this market in Germany was estimated to be worth well over $12.4 billion. In 2006 alone, €21 billion were spent on medical devices, €15.9 billion in domestic sales, and €10.2 billion in export sales. About 86% of domestic medical products are exported. The medical market in Germany is more favorable for reusable medical devices than disposables because of high environmental awareness. The medical device market is featured with 50 multinational corporations and many other SMEs. Some of the major global players in Germany include; Fresenius, B. Braun Melsungen, Otto Bock, Dragger medical, and Siemens Medical solutions. The above manufactures deal mostly with imaging and surgical instruments. In entering Germany medical market, one should understand that there is a lot of competition from locally produced products. Also considering that the market size is wide one may need to have more than one distributor. But if one decides to use a single distributor then it is advisable to find out how reliable is their country wide distribution network so as to be able to reach all the potential customers (FDA, 2007).
From the fore going, Germany is the 3rd largest market for medical devices in Europe. However, economic analysts argue that like other sectors, medical device market might be impacted negatively by the economic recession in the short run. This news is a bitter pill for domestic manufacturing industries, which risk loosing a lot of money due to their dependence on demand for export of their products. The economic downturn will as well lead to a strain on medical health spending. Despite the downturn, Germany is expected to return to growth with medical device markets leading by about 3.4 % by 2016.
Factors affecting medical device markets growth
Medical device market growth in Germany is affected by a number of factors. To begin with, Germany manufactures high value and mature medical devices for better standards of health care. However, technology keeps on changing thus bringing a dilemma between trying to contain sky rocketing health costs and desire to remain leaders in technological innovation. Therefore, Hospitals have no otherwise but to invest in the provision of new medical equipments and technologies to maintain high standard of medical care (Malueg, 2008).
Additionally, efficient healthcare services are needed to deal with the increasing financial constraints and the needs of ageing population. As a result, there is increased demand for efficiencies such as medical devices that allow minimal invasive surgery, increase the number of operations conducted in a day and keep a faster healing of patients. Despite of recession pressure, market growth rate over the years is promising.
Further, Germany is among Western Europe countries which record a strong growth in import market in the recent years. The import market enjoys a lion’s share of about 80% of the market! Of importance is that, trade among EU countries revolves around import market and organizations who want to exploit the full potential in Germany need to ensure that they have an effective distribution and marketing network (Malueg, 2008).
Finally, medical device market growth potential is affected by changes in the regulatory environment or government measures like spending controls on medical devices. High numbers of migratory population and the increasing population of elderly people will all see demand for medical devices and equipment grow tremendously. Of course this is good news to PulseMedTech.
Classification of medical devices in Germany
In Germany market, medal device are classified as class I sterile, class I measuring, class IIa, class IIb or class III where class III devices are considered to have the highest risk. In-vitro diagnostic devices have there own classification systems. Information concerning European classification system is found in MEDDEV2.4/1. And classification rules can be found in Annex ix of directive 93/42/EEG. However, global harmonization task force (GHTF) after discovering that there are some difficulties encountered due to different classifications, in different countries, it developed recommendations on global classification system where medical devices are classified into class A,B,C and D. under this method class D represent those with the highest risk. These recommendations are meant for regulatory authorities and not for companies. Medical devices are given nomenclature during classification. There are two types of nomenclature namely; emergency care research institute (ECRI) nomenclature whose classification is harmonized with USA and the Global Medical Device Nomenclature (GMDN) codes which are harmonized with EU classification terms. For any company to register a medical device in EU it needs the nomenclature system. This is because the nomenclature system details the terms that describe a group of products that have similar features (Medical Products Agency, 2006).
Quality management systems for medical devices in Germany
Germans regards health care highly and thus require quality services. Manufacturers are under no obligation to manufacture suitable quality medical devices for such a market. Good manufacturing practice is the most common requirement for quality. Any company wanting to launch a medical device in Germany must put forward quality so as to win the market. Also it must comply or adjust to the regulatory frame work in Germany. The GHTF is a body of regulatory authority that works to harmonize the regulations for medical devices so as to improve on quality, safety and effectiveness of devices. It has provided guidelines for pre-market evaluation, market performance, post market surveillance, auditing, quality conformity and clinical safety/performance (GHTF, 2008).
Doing Business in Germany
In order for PulseMedTech to manage to enter the Germany market, it must understand the business environment in Germany very well. Germany economy is the 4th largest in the world after the expansion of the European Union, accounting for more than 20% of the EU GDP. Germany is among the greatest trade partners of USA and is the sixth largest market for USA export. The “social market” economy of Germany greatly follows free-market principles but, with a good amount of government regulation and generous social welfare programs. As earlier pointed out Germany forms one of the greatest consumer markets in the European Union with a population of about 83,000,000. It is important to note that Germany’s market place goes beyond its borders. Germany’s population, volume of trade, its geographical location and area at the centre of 27 members of European Union makes it a cornerstone around which all international concerns seek to build their market expansion (invest in Germany, 2009).
Market challenges in Germany
Germany experienced sharp economic decline in 2009 where the GDP fall by about 5 %. This was mostly due to plummeting exports (about -14.7%) and sharp fall in capital expenditure by -8.65%. Despite this fall the gover