GENICON Case

Question 1

Why is GENICON looking to expand to a country with a developing economy?

Answer 1

• Rapid expansion
• Margin for growth
• Low regulations (because still developing healthcare)

Question 2

GENICON is producing low technology products. Why are they still so interested in strong property protection rights?

Answer 2

GENICON’s products are only useful/applicable/relevant when used in conjunction with high tech tools (their complimentary goods), so GENICON needs to protect the patents of those complimentary goods.

Question 3

Wait… what does GENICON actually do again? Sell stuff, right?

Answer 3

Yeah. A+ for you. GENICON mass produces low cost, low tech disposable devices that aid in laparoscopic surgeries. In layman’s terms, plastic devices that hold holes open for surgeons to do their magic with real tools.

Question 4

What’s the usual cost of entering a new market?

Answer 4

~$70,000 ($50k before entry and $20k in setup fees)

Question 5

GENICON is an American company. What the heck are they doing running most of their business outside of the States? Is ‘Murica not good enough for these hooligans?!

Answer 5

At the beginning of the case, ~80% of GENICON’s sales were outside the US (spread though 30 countries). It simply wasn’t practical for GENICON to attempt market infiltration in the US because of GPOs (group purchasing organizations), through which most hospitals acquired their tools.

Question 6

What are the influential MARKET INDICATORS driving GENICON’s choice for its next move?

Answer 6

• Medical Device Market: market size, demand, forecasted growth
• Market Potential Index for Emerging Markets

Question 7

What are the influential NON market indicators driving GENICON’s choice for its next move?

Answer 7

• Economic Freedom
• Corruption Perceptions
• Property Protection

Question 8

Umm… because I’ve been living in a hole for the last 20 years… what are the BRIC countries?

Answer 8

Facepalm

Brazil, Russia, India, China

Question 9

Which of the BRIC countries represents the most RISK LOVING option for GENICON?

Answer 9

China. Higher startup costs, because not the best corruption index score, but best economic indicators.

Question 10

Which of the BRIC countries represents the most RISK AVERSE option for GENICON?

Answer 10

Brazil. Low startup costs, moderate economic growth.

Question 11

What was GENICON’s ultimate path for expansion?

Answer 11

1: Brazil. Took it easy, rode the learning curve. (You go, Glen Coco!)
2. India. Higher corruption but greater econ growth, still learning curve.
3. China. By now, mastered the cost effective methods for startup, capitalizing on that awesome economic growth potential.
4. No plans any time in the near future to go to Russia, because they would be in violation of US corruption laws. (And none for Gretchen Weiners).