【導(dǎo)讀】September19,2020Confidential,Copyright@2020bySinotrust2. Exporting. Licensing. JointVenture. September19,2020Confidential,Copyright@2020bySinotrust3. September19,2020Confidential,Copyright@2020bySinotrust4. Exporting. Subcontracting. Countertrade. EquityJointVenture. September19,2020Confidential,Copyright@2020bySinotrust5. favorable.localmarket.barter-likesystem.Barter,counterpurchase,usedinthismethod.September19,2020Confidential,Copyright@2020bySinotrust6. property(technology,patents,copyrights,anotherfirm(thelicensee),forafee(royaltypayment).forafee.munity.September19,2020Confidential,Copyright@2020bySinotrust7

　　

【正文】 ophies among corporate managers Hisamitsu China Market Entry Strategy September 19, 2020 Confidential, Copyright@2020 by Sinotrust 35 The evaluation of four entry modes according to the most important seven factors in selecting entry modes for Hisamitsu Exporting Licensing Joint Venture WOS Regulation Entry speed Market risk Level of control Intellectual property protection Entry investment Management risk evaluation 19 12 10 11 Advantageous Disadvantageous 3 2 1 Notes: ?Each item is with 3 grade scale. Grade 1 is the lowest and grade 3 is the highest. The lowest sum is 7 and the highest is 21. ?Comparison of four entry modes Hisamitsu China Market Entry Strategy September 19, 2020 Confidential, Copyright@2020 by Sinotrust 36 Feasibility analysis of exporting mode ? The risk is low for exporting mode, since Hisamitsu is not familiar with Chinese market and relevant approval procedure。 ? Hisamitsu could pay more attention to building sales work and managing sales personnel。 ? Intellectual property rights can be effectively protected。 ? In practice, exporting mode is usually taken for foreign pharmaceutical panies in the first phase. Exporting mode is suitable to Hisamitsu in the first step Hisamitsu China Market Entry Strategy September 19, 2020 Confidential, Copyright@2020 by Sinotrust 37 Feasibility analysis of licensing ? In general, licensing mode is not feasible, with the high risk of technology leaks。 ? The China market have great potential, however, licensing mode could not have strong control on the market。 ? The ine of Licensing is limited. Licensing mode is not feasible to Hisamitsu Hisamitsu China Market Entry Strategy September 19, 2020 Confidential, Copyright@2020 by Sinotrust 38 Feasibility analysis of JV It is not feasible for Hisamitsu to enter China market with JV with the following reasons: ? JV is not feasible because of various conflicts in management， inpatibilities in management philosophies。 ? The other highest risk is technology protection in JV mode。 ? The potential that a firm’s applied knowledge (tangible and/or intangible) will be unintentionally transferred to a local firm is very high. JV mode is not feasible to Hisamitsu. Hisamitsu China Market Entry Strategy September 19, 2020 Confidential, Copyright@2020 by Sinotrust 39 Feasibility analysis on WOS mode It is feasible for Hisamitsu to enter China market with WOS in the second phase with the following reasons: ? According to regulations from SFDA, all pharmaceutical manufacturers must have GMP certificates before June 30, 2020. Those enterprises without GMP certificates must stop production after July 1, 2020。 ? Without GMP certificate after June 30, 2020, the manufacturers who apply for new drug production would not be allowed to produce by SFDA. New manufacturers must apply for GMP before application for pharmaceutical manufacturer license.。 ? The pharmaceutical manufacturer license is strictly controlled, esp. for foreign enterprise. Without the license, Hisamitsu can not open its WOS but Hisamitsu can overe it through acquisition after exporting。 ? The other reason is technology protection in WOS mode. The more possible solution is to take WOS mode after the Exporting mode in order to control risks. Hisamitsu China Market Entry Strategy September 19, 2020 Confidential, Copyright@2020 by Sinotrust 40 Conclusions on four entry modes for Hisamitsu in China Mode of entry Exporting Licensing Joint Venture Wholly Owned Subsidiary Exporting is Suitable for the first phase With high risks of technology leaks, licensing is not feasible JV is not feasible because of various conflicts in management， inpatibilities in management philosophies and technology risk WOS may be used after exporting. Hisamitsu China Market Entry Strategy September 19, 2020 Confidential, Copyright@2020 by Sinotrust 41 Suggestion of entry strategy for Hisamitsu Hisamitsu China Market Entry Strategy September 19, 2020 Confidential, Copyright@2020 by Sinotrust 42 Exporting mode is suggested to be taken in the first phase with four reasons Risk Intellectual property rights Exporting mode in the first step Market Size ?Total domestic market volume of Hisamitsu’s products is about US$ 400 million(US$ 270 for drug, US$ 120 for cosmetic),For Hisamitsu, a new entry pany, Exporting mode is a right mode in the first step。 ?The risk is low for exporting mode, since Hisamitsu is not familiar with Chinese market and relevant approval procedure。 ?Intellectual property rights can be effectively protected。 Benchmark ?In practice, exporting mode is usually taken for foreign pharmaceutical panies in the first phase. Hisamitsu China Market Entry Strategy September 19, 2020 Confidential, Copyright@2020 by Sinotrust 43 If the products sell well, Hisamitsu may set up WOS The lowest technology risk WOS mode after Exporting mode in the second step Pharmaceutical manufacturer license ?Through acquisition in WOS mode, pharmaceutical manufacturer license could be obtained immediately without longperiod application and high expense ?The risk would be effectively controlled if taking WOS mode after the exporting mode ?With WOS mode, Hisamitsu could directly control the technology risk Respond quickly to petitors ? WOS mode is the quickest response mode among the four entry modes The highest level of control Hisamitsu China Market Entry Strategy September 19, 2020 Confidential, Copyright@2020 by Sinotrust 44 Hisamitsu should use 2 step entry mode strategy: firstly exporting and then WOS Step Time Step I: Exporting Step II: WOS Step I: (4－ 5 year) Step II Exporting mode is suggested to be taken in the first phase. WOS is a right mode in the second phase, If the prod