Pharmaceuticals & Healthcare Business Perspectives on ... · Pharmaceuticals & Healthcare companies will continue to focus on BRIC countries for 2012-2017 9 Emerging Markets focus

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Pharmaceuticals & Healthcare Business Perspectives on

Emerging Markets 2012-2017

Findings from global survey, August 2012

Everyone is talking about Emerging Markets. But how can these markets be captured? In April-May 2012, GIA sought to find out what approach global Pharmaceutical and Healthcare companies are taking to address their positioning in Emerging Markets. What do they view as success factors or threats? What mistakes have been made? How can these mistakes be mitigated in the future?

As an increasing number of global companies are positioning themselves to have a greater percentage of their revenues from Emerging Markets, new and highly complex issues - ranging from convoluted regulatory environments in China to highly fragmented markets in India - will be encountered. Companies agile enough to successfully address these issues will further need to secure an effective distribution network, navigate bureaucracies, and price effectively. This is where market intelligence becomes invaluable.

This study is important. Most Pharmaceutical and Healthcare companies expect up to 40% of their global revenues to come from Emerging Markets by 2017. With this study, we share some of the ambitions, concerns and challenges facing Pharmaceutical and Healthcare companies in fast growing markets, and we trust this will prove enlightening for your Emerging Markets strategy.

For the global findings or other reports, please visit http://bit.ly/GIA2012 www.globalintelligence.com | [email protected]

Business Perspectives on Emerging Markets 2012-2017 Why this study is important

Nicolas Pechet Senior Vice President, Asia Pacific Global Intelligence Alliance

Emerging Markets focus and expectations

•  Most Pharmaceuticals & Healthcare companies define Emerging Markets as BRIC.

•  Brazil is the top Emerging Market for 2012-2017 for Pharmaceuticals & Healthcare companies, particularly for European companies. Russia is less significant to companies headquartered in the US (53%).

•  Larger Pharmaceuticals & Healthcare companies are more inclined to define Emerging Markets as regions outside US, Western Europe and Japan, versus smaller ones. Larger companies also prefer India to China and Russia.

•  Mexico, Turkey, Argentina and South Africa top the list for non-BRIC Emerging Markets.

•  About one third of the respondents say Emerging Markets will account for over 30% of global revenues by 2017.

Executive Summary:

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Motivations and concerns

•  The aim behind global Pharmaceuticals & Healthcare companies’ 2012-2017 emerging markets strategy is to gain a foothold for long term success in large future markets (76%) – it is now less about capturing lower production costs (5%).

•  Almost half of the respondents are looking for greater global market share; while close to 40% of have customers in Emerging Markets.

•  94% say they would like to have done something differently in how they planned and executed their Emerging Markets strategy. Many would like to have made greater efforts to enter Emerging Markets earlier.

•  Others would have adapted better to local conditions and prices, or ensured they had better local market intelligence and due diligence. The survey shows that availability, accuracy and completeness of intelligence on Emerging Markets is an issue.

Indonesia gaining as companies seek market share

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How can Pharmaceuticals & Healthcare companies succeed in Emerging Markets in 2012-2017?

•  In April-May 2012, GIA conducted an online survey amongst business managers at 38 large and mid-sized Pharmaceutical and Healthcare companies around the world. 53% of the companies in the survey earned more than $1.3 billion (1 billion Euro) in annual revenue.

•  We asked them questions such as: •  How do you define Emerging Markets in your company? •  Which are the top Emerging Markets for Pharmaceutical and Healthcare companies over the next five

years? •  What key factors will determine whether foreign companies succeed in Emerging Markets? •  What are the biggest threats to succeeding in Emerging Markets? •  What are your company’s main reasons for investing in Emerging Markets? •  What share of your company’s global revenue do you expect to come from Emerging Markets? •  Which one aspect of your Emerging Markets strategy would you go back and change if you could?

•  The respondents’ job functions included market/competitive intelligence (39%), strategic planning/business development (24%), senior management (13%), sales and marketing (8%), research and development/product management (5%), among others.

•  See Appendix for more details about the survey sample.

38 managers told us what drives their strategy How do Pharmaceuticals & Healthcare companies perceive Emerging Markets; what are their plans; what do they want to achieve?


•  Manufacturing & Industrial

•  Telecommunication, Technology & Media

•  Professional & Business Services

•  Financial Services

•  Consumer & Retail

•  Pharmaceuticals & Healthcare (P&H)

•  Energy, Resources & Environment

•  Automotive

•  Chemicals

•  Logistics & Transportation

Besides the P&H industry sectors, nine other industries are featured in this report The 10 industries are represented by the following symbols


•  GIA took the opportunity to donate $6.50 / 5 Euros for every completed survey response.

•  The total donation came close to $2,800 / 2,200 Euros, distributed across the following local charities:

This study also helped people living in Emerging Markets Donations from this study went to four charities assisting poor communities in Emerging Markets


•  Cambodia: Tabitha (NGO that runs self-help programs on personal and financial development for the poorest people)

•  Brazil: VidaBela (NGO that awards university scholarships to talented candidates from highly disadvantaged socio-economic backgrounds)

•  Russia: Gift of Life/Podari Zhizn (charity that funds vital medicine for leukemia treatment and searches for potential bone marrow donors for children)

•  South Africa: CANSA (NGO that provides holistic cancer care and support to those affected by the disease)


Emerging Markets focus to 2017

Pharmaceuticals & Healthcare companies will continue to focus on BRIC countries for 2012-2017

9


Source: Global Intelligence Alliance, Business Perspectives on Emerging Markets 2012-2017 Survey, N=38.

•  Most Pharmaceuticals & Healthcare companies define Emerging Markets as BRIC.

•  Brazil is the top Emerging Market for 2012-2017 for Pharmaceuticals & Healthcare companies, particularly for European companies. Russia is less significant to companies headquartered in the US (53%).

•  Larger Pharmaceuticals & Healthcare companies are more inclined to define Emerging Markets as regions outside US, Western Europe and Japan, versus smaller ones. Larger companies also prefer India to China and Russia.

•  Mexico, Turkey, Argentina and South Africa top the list for non-BRIC Emerging Markets.



Pharmaceuticals & Healthcare companies most commonly define Emerging Markets as BRIC

10

Markets outside US, Western Europe & Japan, market growth rate and stage of economic development are also important

20%

14%

14%

14%

12%

11%

8%

6%

1%

0%

BRIC (Brazil, Russia, India, China)

Market not in US, Western Europe and Japan

Market growth rate

Stage of economic development

By geography (eg. in Region X)

BRIICS (BRIC, Indonesia, S. Africa)

Penetration level of product/service

Penetration level by multinational companies

Penetration level by my company

Proprietary listings eg. FTSE, S&P

Source: Global Intelligence Alliance, Business Perspectives on Emerging Markets 2012-2017 Survey. Respondents were allowed to select more than one.

Question: How do you define Emerging Markets in your company? N=38.


How Pharmaceuticals & Healthcare Companies Define Emerging Markets (all respondents)


15%

16%

17%

26%

9%

10%

11%

16%

13%

2%

7%

10%

11%

11%

15%

11%

US

Europe








Market growth rate



US Pharmaceuticals & Healthcare companies have a wide range of definitions for Emerging Markets

11

More European companies define Emerging Markets as BRIC

How Pharmaceuticals & Healthcare Companies Define Emerging Markets (by location of headquarters)


Question: How do you define Emerging Markets in your company? N=23(US), N=11(Europe).



18%

8%

21%

19%

8%

14%

8%

17%

8%

8%

3%

8%

6%

13%

14%

13%

14%

>1 bil Euro/>1.3 bil US

<1 bil Euro/<1.3 bil US








Market growth rate



Larger P&H companies more inclined to define Emerging Markets as regions outside US, Western Europe & Japan

12

How Pharmaceuticals & Healthcare Companies Define Emerging Markets (by annual revenue)


Question: How do you define Emerging Markets in your company? N=38(Total), N=18(<1 bil Euro/<1.3 bil US), N=20(>1 bil Euro/>1.3 bil US).



P&H companies still see BRIC as most important Emerging Markets for 2012-2017 Russia is also significant but the level of interest is behind Brazil, China and India

Top Four Emerging Markets for 2012-2017


Source: Global Intelligence Alliance, Business Perspectives on Emerging Markets 2012-2017 Survey. Respondents were allowed to select more than one. * Figures based on 2012, 2013 and 2017 average from IMF World Economy Outlook: Growth Resuming, Dangers Remain

•  Brazil, Russia, India and China are still the top four most important Emerging Markets for Pharmaceutical & Healthcare companies for 2012-2017.

•  Russia is least favored (61%) amongst the BRIC countries, with the majority focusing more on Brazil, China and India with stronger levels of interest (68%-90%).

•  According to the IMF, average GDP growth rates for 2012-2017* will be 7.4% for India, 3.7% for Brazil, 8.5% for China and 3.9% for Russia.

•  Brazil seems to be finding favor for reasons other than their growth rates, possibly for its potentially huge domestic markets, natural resources and dominance within their regions.

Question: Which are the top 5 Emerging Markets for your industry over the next 5 years? N=38(P&H industry) N=427(all industries).

60.5%

68.4%

68.4%

89.5%

Russia

India

China

Brazil

All Industries

Brazil 66.3%

China 66.0%

India 67.0%

Russia 40.0%

Pharmaceuticals & Healthcare industry

13


205.72 1,205.10 1,343.24 138.08

China’s economy dwarves the other BRIC countries’ but Brazil and Russia have highest GDP per capita

14

Different BRIC countries are attracting interest and investment for different reasons


Source: Global Intelligence Alliance; IMF; CIA

Population Persons (millions)

GDP USD (Billions)

GDP (PPP) per Capita Current international dollar

GDP growth rate 2012 (e)

Land Km2

Brazil India China Russia

11,600 3,700 8,400 16,700

2,518 1,843 6,989 1,791

3.0% 6.9% 8.2%

4.0%

8,514,877 3,287,263 9,596,961 17,098,242


303 286 1,312 375

China is the easiest to do business in and Brazil is becoming more competitive in the global context

15

Levels of development and the opportunities vary across the different BRIC countries


Source: Global Intelligence Alliance; MIIT China, TRAI India, Anatel Brazil, Deloitte

Brazil India China Russia

Mobile subscribers Q1, 2012

Teledensity (wireless) Q1, 2012

1.01 billion 919 million 250 million

No. of millionaire households 2011, thousands

Ease of doing business Index (World Bank) 2011, ranking

91 132 126

Global Competitiveness Index (WEO) 2010/11 to 2011/12, ranking

120

227 million

74% 76% 126% 160%

26 53

58

51

27 66

63

56


Overall, China, India and Brazil look good to most industry sectors; Russia has less widespread appeal

16

Top Four Emerging Markets by Industry for 2012-17 (all industries)

Question: Which are the top 5 Emerging Markets for your industry over the next 5 years? (To 2017) N=427.

27% 25% 26% 30% 30% 24% 29% 29% 27% 29%

27% 32% 28% 30% 29%

24% 29% 23% 31% 21%

19% 15% 16% 13% 12%

21% 17%

21% 16%

21%

27% 28% 30% 27% 29% 31% 25% 27% 26% 29%

Brazil Russia India China



P&H respondents rank Brazil as the most attractive, while Russia is ranked as the least attractive


Emerging Markets in Asia and Latin America are generating the most interest across all industries

17

Top 10 Emerging Markets for 2012-2017 by % Respondents (All Industries)


Source: Global Intelligence Alliance, Business Perspectives on Emerging Markets 2012-2017 Survey.

Question: Which are the top 5 Emerging Markets for your industry over the next 5 years? N=427.

Russia, South Africa and Turkey are the other top targets for the next five years


Pharmaceuticals & Healthcare companies share similar Emerging Markets focus as other industries

18



Top 10 Emerging Markets for 2012-2017 by % Respondents (Pharmaceuticals & Healthcare)

Question: Which are the top 5 Emerging Markets for your industry over the next 5 years? N=38.

However, they include Chile instead of Vietnam in their top 10 emerging markets


All European Pharmaceuticals & Healthcare companies agree Brazil is one of their top Emerging Markets

19

Russia is not as significant to American Pharmaceuticals & Healthcare companies

Top Four Emerging Markets for 2012-2017 for Pharmaceuticals & Healthcare Companies (by location of headquarters)



78.3%

72.7%

78.3%

63.6%

52.2%

72.7%

91.3%

100.0%

US

Europe Brazil Russia India China

Question: Which are the top 5 Emerging Markets for your industry over the next 5 years? N=23(US), N=11(Europe).


75.0%

61.1%

80.0%

55.6%

55.0%

66.7%

90.0%

88.9%

> 1 bil Euro/> 1.3 bil US

< 1 bil Euro/< 1.3 bil US Brazil Russia India China

Larger Pharmaceuticals & Healthcare companies prefer India to China and Russia

20

Top Four Emerging Markets for 2012-2017 for Pharmaceuticals & Healthcare Companies (by annual revenue)



Question: Which are the top 5 Emerging Markets for your industry over the next 5 years? N=38, N=18(<1 bil Euro/<1.3 bil US), N=20(>1 bil Euro/>1.3 bil US).


Second tier Emerging Markets span the globe, led by Mexico and Turkey

21

Secondary Emerging Markets after BRIC 2012-17 (All Pharmaceuticals & Healthcare respondents)


Africa/Middle East Asia Europe Latin America


Question: Which are the top 5 Emerging Markets for your industry over the next 5 years (to 2017)? N=38

•  Most of the non-BRIC Emerging Markets that Pharmaceuticals & Healthcare companies plan to target in 2012-2017 are in developing economies.

•  Mexico (34%), Turkey (29%), Argentina (24%) and South Africa (24%) top the list for non-BRIC Emerging Markets selected by Pharmaceuticals & Healthcare companies.

•  This is followed by Indonesia, Chile, South Korea and Singapore,

Rank Country % respondents

5 Mexico 34.2%

6 Turkey 28.9%

7 Argentina 23.7%

7 South Africa 23.7%

9 Indonesia 21.1%

10 Chile 13.2%

10 South Korea 13.2%

12 Singapore 10.5%

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Question: Which are the top 5 Emerging Markets for your industry over the next 5 years (to 2017)? N=11(European HQ) N=23(US HQ).

European HQ US HQ

5 Mexico (36.4%)

Argentina (30.4%)

6 Indonesia (27.3%)

Turkey (30.4%)

7 South Africa (18.2%)

Mexico (26.1%)

7 Turkey (18.2%)

South Africa (26.1%)

9 Indonesia (17.4%)

9 South Korea (17.4%)


Mexico, Turkey, Argentina, Indonesia, South Africa are popular regardless of company size or headquarters

Secondary Emerging Markets after BRIC 2012-17 (By HQ location)

Question: Which are the top 5 Emerging Markets for your industry over the next 5 years (to 2017)? N=18(<1bil Euro) N=20(>1bil Euro)

< 1bill Euro > 1bill Euro

5 Mexico (38.9%)

Turkey (35.0%)

6 Argentina (33.3%)

Mexico (30.0%)

6 South Africa (33.3%)

Indonesia (25.0%)

8 Chile (22.2%)

Argentina (15.0%)

9 Turkey (22.2%)

South Africa (15.0%)

10 Saudi Arabia (10.0%)

10 South Korea (10.0%)

10 UAE (10.0%)

Secondary Emerging Markets after BRIC 2012-17 (By annual revenue)



21% 18% 16% 20% 21% 12% 16% 16%

27% 21%

18% 15%

12%

20% 6%

14% 18% 19%

27%

8%

14% 15%

14%

7% 20%

3%

18% 6%

14%

21%

10% 15% 14%

10% 12%

20%

12%

13%

4%

4%

14% 8%

10% 12% 11% 17%

6% 16%

8%

8%

5% 8%

8% 6% 3% 14% 6% 3%

5%

8%

4% 5% 9% 6%

3%

8% 8%

6%

5%

14%

6% 8% 2% 6%

8%

4% 6%

9%

5% 8%

3% 6% 9% 3% 12%

1% 6% 6% 4%

5% 2% 6% 10% 4% 7% 4% 6% 5% 4%

South Korea Malaysia Thailand Chile Argentina Turkey Mexico Vietnam South Africa Indonesia

Vietnam stands out for Consumer, Logistics and Resources sectors, Mexico for Healthcare

23

The Chemicals sector is very focused on Indonesia and South Africa, Consumer & Retail on SE Asia



Question: Which are the top 5 Emerging Markets for your industry over the next 5 years (TO 2017)? N=427

Top 10 Secondary Emerging Markets for 2012-17 (all industries)


After Indonesia and South Africa, Turkey and Mexico interest US and European companies most

24

Latin American companies focus more on their own home region; Asian companies favor Vietnam



Question: Which are the top 5 Emerging Markets for your industry over the next 5 years (to 2017)? N=395; N=95 (US); N=161 (Europe); N=44 (Latin America); N=95 (Asia).

Top 10 Secondary Emerging Markets by Location of Headquarters for 2012-2017 (all industries)

15% 18% 4%

26%

15% 17%

11%

11% 10%

11%

3%

22% 15% 10%

29%

6% 14% 17%

7%

6% 10% 4%

20%

2%

5% 7% 1%

10%

6% 3% 20% 3%

6% 6% 4%

6%

4% 7% 1%

8%

US HQ European HQ Latin American HQ Asian HQ

Malaysia

South Korea

Chile

Thailand

Argentina

Turkey

Mexico

Vietnam

South Africa

Indonesia


Emerging Markets aspirations to 2017


30

0

Most Pharmaceuticals & Healthcare companies seek to establish a foothold in future major markets

26

Only 5% look to Emerging Markets as a low cost supply base

Motivations for investing in Emerging Markets



•  The aim behind global Pharmaceuticals & Healthcare companies’ 2012-2017 emerging markets strategy is to gain a foothold for long term success in large future markets (76%) - it is now less about capturing lower production costs (5%).

•  Almost half of the respondents are looking for greater global market share; while close to 40% of have customers in Emerging Markets.

•  About one-third are being pushed into Emerging Markets by the lack of growth or profit in more established markets.

•  A small percentage (less than 20%) are going into Emerging Markets to diversify risks, join competitors and establish a low cost supply base. Question: What are the main reasons for investing in Emerging Markets

for your company? N=38.

60

70

40

50

20

30

10

76% Gain foothold for long term success in large future market

39% Our customers are there

47% Gain global market share

34% Lack of growth/profit in established markets

5% Establish low cost supply base

21% CEO/board directive / Tap into short/medium term growth/profit 16% Diversify risks 13% Our competitors are there


63%

46%

19%

22%

27%

31%

7%

19%

19%

4%

8%

19% 8% 4%

4% 2012

2014

2017

0%-10% 11%-20% 21%-30% 31%-50% 51%-60% 61%-80% 81%-100%

About one third of respondents say Emerging Markets will account for over 30% of global revenues by 2017

27

Close to all would have entered Emerging Markets even by 2017

% Global Revenue from Emerging Markets for Pharmaceuticals & Healthcare Companies (2012-2017)



Question: What % of your company's global revenue do you expect to come from Emerging Markets? N=27 (2012), N=26 (2014), N=26 (2017).

Zero revenue from Emerging Markets

(2012-2017)

11%

4%

4%


Technology sector expects the most growth in Emerging Markets, followed by Logistics and Chemical

28

The Resources sector will source the most revenue from Emerging markets; Consumer, Finance and Healthcare the least

Source: Global Intelligence Alliance, Business Perspectives on Emerging Markets 2012-2017


17%

19%

19%

35%

15%

15%

13%

18%

20%

24%

24%

29%

25%

45%

18%

21%

19%

27%

32%

30%

36%

38%

37%

53%

26%

28%

27%

37%

48%

41%

2017 2014 2012

Question: What share of your company's global revenue do you expect to come from Emerging Markets? N=277 (2012), N=268 (2014), N=263 (2017).

% Average Global Revenue from Emerging Markets by Industry (2012-2017)


Smaller Pharmaceuticals & Healthcare companies are more optimistic about 2017 Emerging Markets revenues

29

Smaller companies are expecting a greater share of revenue from Emerging Markets than larger ones

Source: Global Intelligence Alliance, Business Perspectives on Emerging Markets 2012-2017


Question: What share of your company's global revenue do you expect to come from Emerging Markets? N=38 (Total of 2017): N=7 (<0.1 bil Euro), N=11 (0.1 bil-<1 bil Euro), N=20 (=/>1 bil Euro). .

% Average Global Revenue from Emerging Markets by 2017 for Pharmaceuticals & Healthcare Companies

(By size of annual revenue)

31%

26%

37%

=/> 1bil Euro

0.1 bil - < 1bil Euro

<0.1 bil Euro


Emerging Markets investment experiences and motivations

TOTAL

(N=425) (N=80) (N=58) (N=49) (N=41) (N=39) (N=38) (N=34) (N=24) (N=20) (N=17)

Distribution / access to customers 35% 41% 36% 22% 37% 49% 37% 15% 21% 50% 29%

Adapting to local culture 28% 25% 34% 37% 24% 26% 11% 29% 17% 25% 24%

Building a strong brand 24% 18% 26% 33% 24% 44% 26% 9% 25% 20% 12%

Local partner(s) 24% 20% 19% 37% 32% 15% 29% 21% 21% 15% 12%

Government relations 23% 13% 21% 33% 32% 13% 24% 32% 21% 5% 24%

Pricing 23% 24% 22% 16% 12% 31% 34% 15% 38% 30% 24%

Localized competitive positioning 22% 21% 28% 20% 2% 10% 32% 18% 38% 35% 35%

Product/service quality 21% 21% 21% 20% 27% 21% 24% 12% 4% 35% 29%

Flexibility as the market develops 20% 19% 22% 18% 17% 15% 8% 21% 25% 10% 18%

Localization of products/services 18% 26% 26% 8% 7% 18% 13% 6% 38% 20% 18%

Finding the right talent 18% 16% 16% 18% 12% 13% 18% 24% 21% 15% 12%

Local business relationships/lobbying 17% 16% 12% 22% 17% 13% 11% 21% 13% 20% 18%

Access to customers is the biggest single Emerging Markets success factor across industries

31


Question: In your industry, what 3 key factors will determine which foreign companies succeed in Emerging Markets to 2017? N=425.

Success Factors for Emerging Markets (2012-2017)

Success Factors

Brand is very important for the Consumer sector; localization least important for the Finance sector

Investment experiences and motivations



TOTAL

(N=431) (N=80) (N=58) (N=49) (N=41) (N=39) (N=38) (N=34) (N=24) (N=20) (N=17)

Bureaucracy and red tape 35% 23% 34% 41% 46% 44% 29% 50% 13% 20% 41%

Corruption / weak rule of law 33% 29% 33% 37% 41% 26% 39% 44% 21% 10% 18%

Competition from local companies 28% 38% 21% 29% 15% 28% 42% 9% 46% 30% 24%

Competition from other foreign companies 26% 33% 21% 31% 12% 13% 24% 18% 54% 20% 29%

Economic volatility 23% 28% 14% 22% 37% 26% 24% 21% 21% 20% 24%

Regulations and taxes 23% 25% 16% 16% 22% 33% 26% 26% 21% 25% 29%

Lack of local market understanding at HQ 21% 25% 19% 18% 32% 18% 18% 12% 21% 25% 12%

Political risk 20% 23% 16% 10% 24% 18% 5% 38% 8% 35% 29%

Poor infrastructure 19% 19% 24% 16% 20% 15% 13% 15% 8% 30% 35%

Lack of reliable market intelligence 18% 14% 29% 16% 17% 15% 21% 12% 13% 15% 29%

Unreliable local partners 17% 14% 17% 24% 20% 18% 18% 9% 21% 0% 18%

32


Question: In your industry, what are the 3 biggest threats to succeeding in Emerging Markets in the next 5 years (TO 2017)? N=431.

Threats in Emerging Markets (2012-2017)

Biggest threat across industries is bureaucracy; competition a concern for Auto and Manufacturing

Threats



Most Pharmaceuticals & Healthcare companies would have done something differently in Emerging Markets

33

94% say they would like to have done something differently


Source: Global Intelligence Alliance, Business Perspectives on Emerging Markets 2012-2017 Survey,

•  Only 6% of the respondents say they did not make any mistakes in their Emerging Markets strategy.

•  94% say they would like to have done something differently in how they planned and executed their Emerging Markets strategy.

•  Some would like to have made greater efforts to enter Emerging Markets earlier.

•  Others would have adapted better to local conditions and prices or ensured they had better local market intelligence and due diligence.

Pharmaceuticals & Healthcare companies’ Emerging Markets strategy as of 2012

6% Satisfied with strategy

94% Could have done something better

Question: Which one aspect of your Emerging Markets strategy would you change if you could go back in time, and how? (Will change vs. Will not change) N=35


Late entry is the most widespread mistake made by Pharmaceuticals & Healthcare companies

34


Aspects Pharmaceuticals & Healthcare companies would like to have approached differently

Not adapting to local conditions and prices is another common regret

26%

23%

17%

6%

6%

6%

3%

3%

2%

2%

Entered more quickly

Adapted better to local market/prices

Conducted better intelligence/due diligence

Chosen different/fewer emerging markets

Entered more slowly

Expedited/improved decision making process

Built stronger local talent/expertise

Cultivated stronger local relationships (gov't, partners)

Dedicated more resources

Sought local partners


Question: Which one aspect of your Emerging Markets strategy would you change if you could go back in time, and how? N=35


Emerging Markets intelligence


Availability, accuracy and completeness of intelligence on Emerging Markets is an issue for many

36

More than 80% of companies find decision making is delayed because of lack of information.



•  77% say that information on Emerging Markets is not readily available in their organizations.

•  87% doubt the accuracy and completeness of the information.

•  Only 37% say that decision making in their organizations is efficient in general, 87% say that decisions on Emerging Markets are delayed due to lack of information.


29%

3%

16%

60%

10%

29%

5%

13%

10%

5%

3%

45%

37%

32%

3%

32%

50%

18%

Accurate market sizing and growth estimates are critical for our Emerging Markets strategy

Information on Emerging Markets is always readily available in our organization

Inaccurate or incomplete information about Emerging Markets is never a problem

Large volumes or overflow of information about Emerging Markets is never a problem

Strongly agree Somewhat agree Neither agree or disagree Somewhat disagree Strongly disagree

There is a large gap between the need for accurate Emerging Markets intelligence and its availability

37

Importance and availability of information on Emerging Markets for Pharmaceuticals & Healthcare companies

89% say that accurate market intelligence is critical but only 10% say it is always available




8%

3%

6%

39%

21%

25%

19%

19%

21%

28%

39%

37%

6%

18%

11%

0%

3%

16%

10%

0%

29%

13%

10%

5%

45%

37%

32%

32%

50%

18%

Information on these Markets is always readily available in our organization

Inaccurate or incomplete information about these Markets is never a problem

Large volumes or overflow of information about these Markets is never a problem


Information for Emerging Markets is not as available as for global markets

38

Information on Emerging Markets vs. Global Markets for Pharmaceuticals & Healthcare companies

Availability and accuracy of market intelligence varies between Emerging & Global Markets

Source: Global Intelligence Alliance, Business Perspectives on Emerging Markets 2012-2017 Survey, N=58 (Emerging Markets). N=81 (All markets)

Emerging Markets All markets



14%

11%

3%

32%

26%

18%

37%

10%

18%

18%

37%

18%

8%

50%

All executive decisions on Emerging Markets are supported by market intelligence

Executive decision making is very efficient in our Emerging Markets organization

Our decisions are never delayed because we are missing information about Emerging

Markets


Lack of information delays decisions for 87% of the companies operating in Emerging Markets

39

Decision making on Emerging Markets for Pharmaceuticals & Healthcare companies

This is one underlying factor behind strategic mistakes made in Emerging Markets




19%

15%

6%

46%

51%

30%

16%

20%

24%

16%

12%

33%

3%

2%

7%

Decisions on Emerging Markets are less supported by intelligence than they are across all global markets

40

14%

11%

3%

32%

26%

0%

18%

37%

10%

18%

18%

37%

18%

8%

50%

All executive decisions on these Markets are supported by market intelligence

Executive decision making is very efficient in these Market organization

Our decisions are never delayed because we are missing information about these

Markets


Decision making on Emerging Markets vs. Global Markets for Pharmaceuticals & Healthcare companies

Source: Global Intelligence Alliance, Business Perspectives on Emerging Markets 2012-2017 N=58 (Emerging Markets). N=81 (All markets)

Emerging Markets All markets



Appendix: Survey Respondents

38 global Pharmaceuticals & Healthcare companies took part in the survey 75% have at least 1,000 employees

19%

29%

26%

13%

13%

< $0.13 bil/0.1 bil Euro

$0.13-1.3 bil/0.1-1 bil Euro

$1.3-$6.5 bil/1–5 bil Euro

$6.5-$13 bil/5-10 bil Euro

> $13 bil/ >10 bil Euro

% of respondents by annual revenue


8%

17%

30%

17%

28%

Less than 100

100 – 1,000

1,001 – 5,000

5,001 – 10 000

More than 10,000

% of respondents by number of employees


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Documents

Pharmaceuticals & Healthcare Business Perspectives on ... · Pharmaceuticals & Healthcare companies will continue to focus on BRIC countries for 2012-2017 9 Emerging Markets focus