Case Scenario 3: Compliance, Inc.
Compliance, Inc., (CI)conducts clinical human and animal trials for the pharmaceutical and biotechnology industries. Revenues are split evenly between early and late drug development services. In the area of early drug development, CI offerings include analytical, bioanalytical, antibody, clinical pharmacology (Phases I-IIa), toxicology, and drug metabolism services. Late development services include central diagnostics, central lab, clinical development (Phases IIb-IIIa), periapproval (Phases IIIb-IV), and pharmacogenomics. The bulk of its business is conducted in Europe and the United States (10 and 17 subsidiaries, respectively); CI also has subsidiaries in Africa, Latin America, Asia, and Australia. While now an independent public company, CI was once itself a subsidiary of Corning International. Corning built up CI through over 40 acquisitions, hoping to extend its strength in medical testing glassware into the medical services business. At the time Corning made its acquisitions, the clinical testing industry was geographically fragmented, owing largely to the fact that various parts of the world had their own strong local pharmaceutical companies and distinct regulatory environments. Perhaps for that reason Corning, and now CI, has retained the autonomous character of each country's businesses. However, globalization of the regulatory environment (both global and local standards), globalization of the biotechnology firms (increasing the geographic scope of their operations), and tremendous consolidation in the pharmaceutical industry (reducing the number of pharmaceutical industry participants to only a handful of major global companies)is causing CI to question its decentralized strategy.
-(Refer to Case Scenario 3). What benefits might CI expect from using an international strategy?
)
A) increased market size
B) economies of scale and learning
C) competitive advantage through location
D) increased market size, economies of scale and learning, and competitive advantage through location.

Question

Quizplus · Accepted Answer

By using an international strategy, CI can expect increased market size, as they will be able to tap into new markets and expand their reach beyond their current geographical areas. They will also experience economies of scale and learning, as they can consolidate their operations, reduce duplication of efforts, and share knowledge and expertise across different subsidiaries. Finally, they can gain a competitive advantage through location, as they can position themselves strategically in different regions to better serve their clients and respond to regulatory requirements.