Internationalization of China’s medical device industry: a case study in Brazil
Keywords:Internationalization, Supply chain strategies, Medical devices, Chinese multinational, Uppsala model
The singularity of being the first Chinese manufacturer of drug-eluting stents to arrive in Brazil and the country being selected as the company's first experience outside its home country motivated the interest in the study of this case, vis-à-vis with the characteristic of internationalization medical device companies according to the Uppsala model. Considering this context, the following research question was outlined: “How did Microport internationalize before the distribution of its stents product in Brazil?” The aim of the study is to investigate Microport's internationalization process for the distribution of its drug-eluting stents in Brazil.Design/methodology/approach
Exploratory research under the qualitative method was adopted. It chose the single case study as a procedure for data collection, as it is a revealing, exemplary subject that offers opportunities for access to unusual research. The company MicroPort was chosen because in the period when Chinese medical device companies were focused on gaining market share in China, MicroPort began its international expansion, choosing Brazil as the first country to have its own subsidiary. It consists in the case of the internationalization of a high-tech EMNE in an emerging country that has institutional and cultural differences.Findings
Taking advantage of new technology in highly internationalized environments favors its insertion; the internationalization of medical technology can expand according to the Uppsala Model, which does not explain internationalization, but rather its evolution. Cultural and behavioral issues reinforce that the development of the market for medical devices depends on local perspectives and values. The formation of an ecosystem in the local market for internationalization is observed. One implication of the study is that MicroPort's experience and the application of the Uppsala model for international expansion can serve as an important learning experience for Brazilian multinational companies.Research limitations/implications
Empirical analysis carried out in the context of a single company. Although the results can be used as lessons learned from the application of the Uppsala model for international expansion of EMNE in an emerging market, caution should be exercised when generalizing its findings. Future studies could carry out comparative cases considering other emerging multinational companies, from the same sector or even from different industries, investing in other emerging markets. There is a limitation of the fact that the case studied does not explore the concepts of the later stages of the Uppsala model.Practical implications
High-tech EMNEs internationalizing in other markets need to adopt aggressive strategies. The need to adopt different strategies for supply chain operations according to the specificities of the markets in which they operate. Important contributions to the Uppsala model, with regard to the process of passing stages, learning and networking. The findings of this study have similarities to the process described as a sequence of distinct phases of activities.Social implications
A local top management team is essential to deal with institutional issues of government agencies when EMNE is internationalized in a culturally distant market. When there are major institutional differences between the country of origin and the host country, the autonomy in the management of the foreign subsidiary positively influences the acceleration of the internationalization process of companies in the high-tech sector. When there are major institutional differences between the country of origin and the country of destination, the use of local social networks positively influences the acceleration of the internationalization process of companies in the high-technology sector.Originality/value
Regardless of these limitations, the study provided an exciting case of internationalization of a Chinese company in Brazil operating in a high-tech medical sector. The challenges for the internationalization of EMNEs continue, which makes it opportune for future studies to include more research in this area. The propositions suggested in the study may be the first step.
ABBOTT. (2020). 2019 Annual report. Retrieved from: www.abbottinvestor.com/static-files/8829af8d-783a-42ef-9566-37a699e79188
ANVISA. (2018). Relatório de definição e análise do problema regulatório? Contribuições Para a revisão normativa da RDC n°185/2006. Retrieved from: www.gov.br/anvisa/pt-br/assuntos/produtosparasaude/temas-em-destaque/arquivos/7263json-file-1
BandNews. (2021). Jornal BandNews TV 2a Edição – Mirângela machado, diretora geral da MicroPort fala sobre novo stent. Retrieved from: www.youtube.com/watch?v=hedhTLvr5iw
Boston Healthcare. (2020). Analysis of China’s first national tender on coronary stents. Retrieved from: www.bostonhealthcare.com/analysis-of-chinas-first-national-tender-on-coronary-stents/
Boston Scientific. (2020). 2019 Annual report. Retrieved from: Retrieved from: www.bostonscientific.com/content/dam/bostonscientific/corporate/annual-report/2019_Boston_Scientific_Annual_Report.pdf
Boyen, M.H., & Ogasavara, M.H. (2013). Internationalization patterns of multinational lodging firms in Brazil. Tourism and Hospitality Research, 13(4), 181–200.Retrieved from: doi: https://doi.org/10.1177/1467358414525623.
Buchanan, D., & Bryman, A. (2009). Studying processes in and around organizations. The SAGE handbook of organizational research methods, London: Sage Publishing.
Buckley, P. (2019). China goes global: provenance, projection, performance and policy. International Journal of Emerging Markets, 14(1), 1–20. Retrieved from doi: https://doi.org/10.1108/IJoEM-01-2017-0006.
Coughlan, A.T., Anderson, E., Stern, L.W., & El-Ansary, A.I. (2012). Canais de marketing e distribuição, São Paulo: Pearson.
Cransac-Miet, A., Zeller, M., Chagué, F., Faure, A.S., Bichat, F., Danchin, N., … Cottin, Y. (2021). Impact of COVID-19 lockdown on lifestyle adherence in stay-at-home patients with chronic coronary syndromes: towards a time-bomb. International Journal of Cardiology, 323, 285–287. Retrieved from: doi: https://doi.org/10.1016/j.ijcard.2020.08.094.
Dalenberg, D. (2020). International medical device marketing. International Journal of Health and Economic Development, 6(1), 15–26.
Dow, D., Liesch, P., & Welch, L. (2017). Inertia and managerial intentionality: Extending the Uppsala model. Management International Review, 58(3), 465–493. Retrieved from: doi: https://doi.org/10.1007/s11575-017-0340-0.
Eisenhardt, K.M. (1989). Building theories from case study research. The Academy of Management Review, 14(4), 532–550.Retrieved from: doi: https://doi.org/10.5465/amr.1989.4308385.
Eisenhardt, K.M., & Graebner, M. (2007). Theory building from cases: Opportunities and challenges academy of. Academy of Management Journal, 50(1), 25–32.Retrieved from: doi: https://doi.org/10.5465/amj.2007.24160888.
Elango, B., & Pattnaik, C. (2011). Learning before making the big leap: Acquisition strategies of emerging market firms. Management International Review, 51(4), 451–481.Retrieved from: doi: https://doi.org/10.1007/s11575-011-0085-0.
Euromonitor International. (2018). Top countries to drive medical device manufacturing report, Euromonitor International.
Evers, N., Andersson, S., & Hannibal, M. (2012). Stakeholders and marketing capabilities in international new ventures: Evidence from Ireland, Sweden and Denmark. Journal of International Marketing, 20(4), 46–71. Retrieved from: doi: https://doi.org/10.1509%2Fjim.12.0077
Figueira-de-Lemos, F., Johanson, J., & Vahlne, J.-E. (2011). Risk management in the internationalization process of the firm: A note on the Uppsala model. Journal of World Business, 46(2), 143–153. Retrieved from: https://doi.org/10.1016/j.jwb.2010.05.008.
Fornes, G., & Butt-Philip, A. (2014). Chinese outward investments to emerging markets: Evidence from Latin America. European Business Review, 26(6), 494–513. Retrieved from: doi: https://doi.org/10.1108/EBR-03-2013-0059.
Global Data. (2014). Coronary stents: Global analysis and market forecasts, GlobalData.
Hånell, S.M., Nordman, E.R., Tolstoy, D. & Sharma, D.D. (2018). Pursuing Innovation: An Investigation of the Foreign Business Relationships of Swedish SMEs*. British Journal of Management. doi: 10.1111/1467-8551.12315.
Hult, G.T.M., Gonzalez-Perez, M.A., & Lagerström, K. (2020). The theoretical evolution and use of the Uppsala model of internationalization in the international business ecosystem. Journal of International Business Studies, 51(1), 38–49. Retrieved from: doi: https://doi.org/10.1057/s41267-019-00293-x.
Jiang, G., Kotabe, M., Zhang, F., Hao, A.W., Paul, J., & Wang, C.L. (2020). The determinants and performance of early internationalizing firms: a literature review and research agenda. International Business Review, 29(4), 101662. Retrieved from: https://doi.org/10.1016/j.ibusrev.2019.101662. doi: 10.1016/j.ibusrev.2019.101662.
Johansson, J., & Vahlne, J.-E. (1977). The internationalization process of the firm: A model of knowledge development and increasing foreign market commitments. Journal of International Business Studies, 8(1), 23–32. Retrieved from: doi: https://doi.org/10.1057/palgrave.jibs.8490676.
Johanson, J., & Vahlne, J.-E. (2009). The Uppsala internationalization process model revisited: From liability of foreignness to liability of outsidership. Journal of International Business Studies, 40(9), 1411–1431. Retrieved from: doi: https://doi.org/10.1057/jibs.2009.24.
Khan, Z., Lew, Y.K., & Rao-Nicholson, R. (2020). The role of dynamic capabilities in global strategy of emerging economies’ multinationals. International Studies of Management & Organization, 50(1), 1–4. Retrieved from: doi: https://doi.org/10.1080/00208825.2019.1703375.
Knight, G.A., & Cavusgil, S.T. (2004). Innovation, organizational capabilities, and the born-global firm. Journal of International Business Studies, 35(2), 124–141. Retrieved from: doi: https://doi.org/10.1057/palgrave.jibs.8400071.
Kotler, P., & Keller, K.L. (2015). Marketing management, New York, NY: Pearson/Prentice Hall.
KPMG. (2018). Medical devices 2030, KPMG International Cooperative.
Lansky, A., Wijns, W., Xu, B., Kelbæk, H., Van Royen, N., Zheng, M., et al. (2018). Targeted therapy with a localised abluminal groove, low-dose sirolimus-eluting, biodegradable polymer coronary stent (TARGET all comers): A multicentre, open-label, randomised non-inferiority trial. The Lancet, 392(10153), 1117–1126. Retrieved from: doi: https://doi.org/10.1016/S0140-6736(18)31649-0.
Laurell, H., Achtenhagen, L., & Andersson, S. (2017). The changing role of network ties and critical capabilities in an international new venture’s early development. International Entrepreneurship and Management Journal, 13(1), 113–140. Retrieved from: doi: https://doi.org/10.1007/s11365-016-0398-3.
Lee, M. (2018). Strategies for promoting the medical device industry in Korea: An analytical hierarchy process analysis. International Journal of Environmental Research and Public Health, 15(12), 2659 Retrieved from: doi: https://doi.org/10.3390/ijerph15122659.
Lopez, L.E., Kundu, S.K., & Ciravegna, L. (2009). Born global or born regional? Evidence from an exploratory study in the costa Rican software industry. Journal of International Business Studies, 40(7), 1228–1238. Retrieved from: doi: https://doi.org/10.1057/jibs.2008.69.
Machková, H. (2006). Mezinárodní marketing, Prague: Grada Publishing House.
Mariotto, F.L., Zanni, P.P., & Moraes, G. H. S. M. (2014). What is the use of a single-case study in management research? RAE. Revista de Administração de Empresas, 54(4), 358–369. Retrieved from: doi: https://doi.org/10.1590/S0034-759020140402.
Medicina S/A. (2021). Mirangela machado assume diretoria geral da MicroPort brasil. Retrieved from: https://medicinasa.com.br/mirangela-machado-microport/
Medtronic. (2020). 2018 Annual report. Retrieved from: https://investorrelations.medtronic.com/static-files/da4767cb-a6c9-4716-801e-48a0a3155e1f
Meyer, K.E., & Thaijongrak, O. (2013). The dynamics of emerging economy MNEs: How the internationalization process model can guide future research. Asia Pacific Journal of Management, 30(4), 1125–1153. Retrieved from: https://doi.org/10.1007/s10490-012-9313-9 doi: 10.1007/s10490-012-9313-9.
MicroPort. (2018). 2017 Annual report. Retrieved from: www.microport.com/assets/financial-reports/reports/en/2017-annual-en.pdf
MicroPort. (2020). MicroPort news. Retrieved from: www.microport.com/en/news/first-implant-of-firehawk-stent-successfully-completed-in-oman
MicroPort Brasil. (2021). Solaci 2021. Retrieved from: www.linkedin.com/posts/microportbrasil_solacicaci2021-solaci-solacicaci-activity-6829570082692247552-q-fr
Mikhailova, O., & Olsen, P.I. (2016). Internationalization of an academic invention through successive science-business networks: The case of TAVI. Journal of International Entrepreneurship, 14(3), 441–471. Retrieved from: https://doi.org/10.1007/s10843-016-0186-8.
Miles, M.B., & Huberman, A.M. (1994). Qualitative data analysis: an expanded sourcebook, Sage Publishing.
Nolke, A. (2014). Multinational corporations from emerging markets, Hampshire: Palgrave-Macmillan.
Pettigrew, A.M. (1997). What is a processual analysis? Scandinavian Journal of Management, 13(4), 337–348. Retrieved from: https://doi.org/10.1016/S0956-5221(97)00020-1.
Rolnicki, K. (1998). Managing channels of distribution: the marketing executive’s complete guide, New York, NY: Amacom.
Sutherland, D., Hennart, J.-F., & Anderson, J.R. (2019). How does the routing of FDI to and via tax havens confound our understanding of Chinese MNE identity? A critical review of the empirical literature on Chinese MNEs. Asian Business & Management, 18(5), 337–359.Retrieved from: https://doi.org/10.1057/s41291-019-00058-2.
Thøgersen, J., Barcellos, M.D., Perin, M.G., & Zhou, Y. (2015). Consumer buying motives and attitudes towards organic food in two emerging markets: China and Brazil. International Marketing Review, 32(3/4), 389–413. Retrieved from: https://doi.org/10.1108/IMR-06-2013-0123.
Vahlne, J.-E. (2020). Development of the Uppsala model of internationalization process: From internationalization to evolution. Global Strategy Journal, 10(2), 239–250. Retrieved from: https://doi.org/10.1002/gsj.1375.
Vahlne, J.-E., Ivarsoon, I. & Johanson, J. (2012). Overcoming the liability of outsidership – The challenge of HQ of the global firms. Journal of International Management, 18(2012), 224–232.
Yin, R. (2006). Case study research: Design and methods, CA: Sage Publishing.
Zelkha, S. (2012). Benchmarking of a medical device company’s product development process. Thesis Science Magister, Massachusetts Institute of Technology, Cambridge.
This work is licensed under a Creative Commons Attribution 4.0 International License.
Management Department of the School of Economics, Management and Accounting of the University of São Paulo.
The publication of article segments is allowed, subject to prior authorization and source identification.
Copyright is regulated under Licença Creative Commons Attribution