Vyvanse Global Marketing Plan

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Exporting Vyvanse to China

November 18, 2008
International Marketing
Illinois State University

Student Names Listed Here

Table of Contents

Executive Summary3

Company Overview4

Industry / Category4


Cultural Analysis7

Geographical setting7
Relevant history7
Living conditions9
Business customs/etiquette9
Cultural descriptors10

Political/Legal Analysis10

Current Relations with U.S.11
Political Risk Assessment11

Economic Analysis13

Economic Statistics & Activity14
Transportation Infrastructure14
Communication Infrastructure14
Labor Force14
Working Conditions14
Principal Industries15

Trade Policy Issues15

The World Trade Organization15
U.S. and China Trade15
Harmonized System Codes15
Trade Barriers16

Financial Analysis16

Competitive environment18

Market shares18
Major competitors20
Johnson and Johnson20

Marketing Mix Analysis22





Executive Summary Good.

Vyvanse, incorporated with Shire Corporation, is a central nervous system stimulant made for children and adults with attention deficit hyperactive disorder (ADHD). The drug is meant to improve focus, organization, and to ease impulsivity in both children and adults. China is the world’s most populous country with well over 1.3 billion people. With approximately 1/5th of the world’s population and one of the world’s fastest growing economies, it presents significant potential for the pharmaceutical industry; currently in the growth stage in China with a life cycle of 45-50 years. As of 2007, China became the world’s ninth largest drug market. It is expected to be the fifth largest in the world by 2010 with an annual growth greater than 16%. In 2004, China’s total output of pharmaceuticals reached $54.4 billion (cite). Last year, chemical drug sales grew almost 24% in the first eight months to reach $14.3 billion (cite). The thousands of domestic companies there account for roughly 70% of the market share, leaving 10-20% of overall sales to foreign players. The total expenses spent on R&D for a Chinese owned pharmaceutical company totals less than the sum spent by any single Western company. China imports double what they export in chemical drugs from foreign countries, creating a significant market for pharmaceutical expansion. Corruption is still a major concern in the country. China’s corruption level is ranked 72nd in the World Trade Organization. In an effort to reduce drug counterfeiting and fraud, laws were passed in 2001 which standardized the purchasing and distribution of pharmaceutical drugs in China. The Ministry of Health runs the healthcare system in China and is in the midst of remodeling after the U.S in ways of a basic national health insurance plan and hospital reforms. In 2001 China joined the WTO to stiffen drug regulations, adapt new practices regarding trade policies, and ultimately granting the government less control. They still have not eliminated many of their barriers to trade. In 2005, the Chinese government delinked the Yuan from the U.S dollar. The currency rate for 1 U.S dollar is currently equal to 6.8230 Yuan. The appreciation of the Yuan is good for Chinese citizens who seek low cost products in the U.S. Favorable demographics include the increased prosperity of families in urban cities like Shanghai and Guangzhou. In Chinese culture, there is an extremely strong emphasis placed on education. A drug to enhance studies amongst children will be welcomed to the highest degree. The primary market holds the 19 million school children aged 6-19 diagnosed with ADHD. In regards to sales, a skim pricing strategy will be implemented to achieve the highest profit. Currently a 30mg...
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