Cochlear in the Globalization Marketplace - Coursework Example

Cochlear in the Globalization Marketplace Introduction Unlike many other firms that develop a global scope through gradual expansion of their products, Cochlear had to become global from the very start because of the very nature of what they made. Essentially, a company like Apple Inc. easily established itself in the United states because there were enough clients to sustain it; building on the short run success they steadily ventured into the global market where they have managed to become a dominant force; such is the case for numerous multinationals. In Cochlea’s case, the limited number of people needing their products in Australia cannot have been enough to sustain the business in the end. While not seeking to undermine the necessity of ear implants, cases of ear problems requiring such devices are not numerous enough in any one company to guarantee a steady profit and therefore expanding into other countries must have been an inevitable part of the plan. In addition, the rarity of the condition, along with Cochlea’s effectiveness capacity for innovation can also be credited for its market leadership since there are not many competitors. Few firms are willing to get into the ear implants field given the high cost of entry and the relatively low return unless they can ensure an expansive supply chain with global latitude (Cunningham, Slattery, & Luxford, 2004). Taking to account the dynamics at play in the global economy and the globalization trends, this paper seeks to determine the various micro and macro-economic factors Cochlea’s has to consider in its effort to select target markets and develop an effective marketing mix. Background Cochlear is a leading global company dealing with biotechnology, it is mostly renowned for the design and manufacture of the Nucleus Cochlear implant, the Hybrid electrical acoustic implants and the baha bone conduction implants. The firm was founded in 1981 in Sidney where it is based even today, the government of Australia initially financed it and Dr Graeme Clark pioneered the implants. Its global dominance in the implant business is underscored by the fact that it is responsible for over two thirds of the ear implants in use today anywhere in the world. Since 1982, over a quarter a million individuals have benefited from their implants. In Australia, it was named the most innovative company in 2002 and 2003 consecutively and in 2011, Forbes declared it among the most innovative companies in the world. It primary areas of manufacturing are Sweden and Australia, however the products are supplied to over 100 countries worldwide with annual sales in excess of $297 in the Continental America and 285 in Europe, the middle east and African and $123 in the Asia pacific region. The firm’s impressive sales record is offset by their willingness and capacity for investment and innovation, in the year 2012 for example, over 120 million dollars was spent on research and development alone. In the previous year, the firm showed the extent of its concern for customer welfare after shutting down the Nucleus model CI500 Implants because of a fault affecting less than one percent of the devices (Monksfield et al., 2012). They funded a complete recall and provided replacements with and older version, a process that cost them over 100 million dollars. The success of Cochlea in the international market has to a significant extent rested on funding from both private sources and government coffers. Since the target market for the firm is a specific group and their products are essentially health intensive, they have a long leading time before the can make profits. This is highly influenced by the fact that before the products can be released into the market they must undergo a barrage of quality control, health and standardization tests as well as a nuclear trail license (Chaoui, Perdriau, Ghariani & Lahiani, 2012). All these lend to the suggestion that the operating dynamics of Cochlea have a significant exposure to social legal economic and technological change that are bound to vary in every country or region of operation. This especially proves complicated whenever it desires to launch in a new market such where the perception for their product may be relatively or even radically different than in the country of origin. Borden (1964) proposes that when an analyst considers a marketing mix, they give particular heed to devising a combination of strategies and long range planning that can fit the market as far as 10 years into posterity. The most effective way of establishing a marketing mix concerning this or any other company is the PESTLE analysis. This way, the political, environmental, legal economic and social cultural considerations can be taken to account. Political and Legal The political and legal are in many cases inextricably tied when one considers a situation where Cochlea is attempting to make inroads in a market controlled by different laws and ideologies from those in the democratic and commonwealth Australia (Hewerdine & Welch, 2008). In communist China for example, the government uses the law education, taxation and politics to lead to social changes in marketing. On the other hand, when the firm first entered the UK in 1991, they were funded by the NHS, which recognized their potential as a low cost and volume intervention for deaf patients. After the Nottingham pediatric Cochlear implant, which was Cochlea’s fist program targeting children, the firm’s products and services, were accepted as standard care routine in the UK. From the illustration, it is evident that while the firm may have an easy time launching new products and extending its markets in countries where the legal and political structures are similar to Australia in differently structured nations the firms flexibility may be challenged. Even with the above-mentioned considerations, the medical device market, which include but is not limited to implants. Currently, there are international developments that have however been initiated to bring about harmonization of the regulations in the Americas and South East Asia. 10 south Asian governments have endeavoured to create a bloc under which a single market authorization for medical devices can be implemented. However, this will come at a considerable cost and it is estimated that the application of requirements needed across a market with a population exceeding six million should be staggering. Economic On the economic angle, Cochlea products are vulnerable to economic conditions stemming from the challenges facing householders with disposable incomes or national welfare. In many cases, the attendance needed to maintain the products are not affordable for those who need them most and as a result, low-income families that could substantially increase the market base are side-lined. The context of consumption is in effect one of the factors that affect the design of the product or service and the means through which they are positioned and promoted in the international market (Sach, Whynes, Parker & Archbold, 2004). Some of the target countries have very different macro-economic factors from Australia more so in terms of economic development wealth distribution and the levels of urbanization. As a result, before venturing into a new global market, the firm needs must factor in the effect of economic disparities in order to operate within the assumptions of the new market and make requisite adjustments (Douglas & Craig, 2011). Technology Technology has undoubtedly been one of the major reasons Cochlea has managed to revolutionize the hearing implants industry by integrating elements of technology and biology to come up with the most effective implants in the market (Douglas & Craig, 2011). However, it is as always a double-ended sword, despite the fact that it has proven invaluable in providing solutions it has also posed and continues to pose a serious threat to the social economic elements of the business. The major implication in the social context has to do with what some tend to refer as “deaf culture” While on one hand the implants help millions of deaf people around the world attain normal hearing, results in language problems since many of the deaf had been communicating in sign language (Chaoui, Perdriau, Ghariani & Lahiani, 2012). Consequently, before entering any market technological considerations must be taken to account while trying to determine the possible obstacles for the intervention effect of the products such as stability and durability. Social Cultural The social factors affecting the marketing mix are determined by a plethora of attitudes values and behaviours, which can act as both a driver and barrier for market change both from a societal or individual viewpoint. Cultural considerations are essential elements in influencing consumer attitude as well as behaviour patterns of any segment market. In the firm, there are five major stakeholder groups involved in the implementation decision making purchases, provides manufacturers and finally patients. The primary objective of the provides is to implant all the patients who have been found suitable within their own resource constraints depending on the budget that has been availed by purchasers (Kennedy & Parsons, 2011). The stakeholders ultimately have complex relationship and although they mostly work complimentarily, they are sometimes in conflict with each other based on the social contexts at play. The marketing branch of Cochlear must take to account the social context since applying the same marketing framework in a differently structured market may be counterproductive. According to deaf Australia (2006), cochlea implants should be applied with awareness of the social-cultural perspectives that determine how deaf people are viewed or view themselves. One of the challenges that have affected how the issue is approached is the fact that in some communities, deafness is not seen as a problem needing to be cured. To some people, being deaf is way of life and they view themselves as a minority needing to be accepted not altered to fit the norm. In some scenarios, suggesting to someone who was born deaf that they should get an implant to help them hear is analogous to telling someone gay to undergo treatment for the same. In most liberal countries where the practice is legalized, such a suggestion would be deemed offensive or even discriminatory. Therefore, the marketing techniques used should take to account the cultural implications since it essentially lifts deafness to a pathological level opening it up to medical and technological intervention. In China for example, just as was the case in France in the late 80’s and 90’s when the implants were introduced they were initially rejected and opposed on the basis of their interfering with sign language and trivializing the plight of deaf people who could not afford or benefit from them. For those children who are born deaf-to-deaf parents they do not consider themselves impaired by their lack of hearing but rather disabled by the society. The idea that someone can view deafness as not being most outsiders as perverse regard a disability, however some members of the deaf community fully believe this and are supported in varying degrees by their governments. Therefore, countries tend to vary dramatically in terms of contextual factors such as the regional and cultural deviations and these variant views are apt to result in social debates against the implants (Lai & Dillier, 2013). At the end of the day it is quite likely that macro-level factors such as those mentioned above can have considerable impact on the marketing mix of the firm and as such, they need must pay close attention to each of them. In spite of its dominant market share, Cochlea has faced fierce competition from new entrants, which are pursuing a similar approach to proving implants by combing technology and biology. One of this is Advanced bionics an American company privately and which produced implantable devices that are used to direct electrical impulses to nerves and muscles. Conclusion In conclusion, it is evident in light of the factors considered that cochlea has a sizable task ahead of it if it is to maintain its market dominance on a global scale as well as enter new markets. Social economic cultural and political factors all have to be taken to account so that for every new market the marketing mix can be strategically organized to factor in the considerations in the above analysis. 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